When Verizon Wireless doubled its early termination fees on accounts with smartphones recently, the Federal Communications Commission asked the company to explain itself. Verizon said the high fee is necessary to allow consumers to purchase the phones at manageable prices.
Now, it appears the FCC is asking similar questions of all four cellular service providers, as well as Google. CNET News reports FCC Chairman Julius Genachowski acknowledged that Verizon's response to the initial inquiry raised more questions than it answered. As such, the agency decided to include the other three carriers -- T-Mobile, Sprint, AT&T -- and Google in the inquiry.
For example, Google and T-Mobile both subsidize Nexus One handsets, enabling customers to buy a $529 phone for $179 with a service contract. In theory, the fees enable the companies to recoup what they've contributed to the subsidy.
The companies have until Feb. 23 to respond to the request, in which the FCC asks them to "explain their early termination fee policies and how they communicate these to customers," writer Marguerite Reardon says. FCC officials point to the abundance of class-action lawsuits addressing early termination fees as evidence that consumer confusion on the issue also abounds.