FCC Chairman gets into the hair of wireless carriers

Federal Communications Commission Chairman Kevin Martin has a love-hate relationship with wireless carriers. Sometimes he is known to help them with corporate plans and growth strategies, at other times, he gets into their cross-hair and creates what mobile carriers may consider obstacles.

Recently he spoke about regulating ETF (Early Termination Fees) fees which carriers charge when customers leave before the end of their contracts. Typically these fees range from $125-$250 per subscriber and are levied when the customer decides to disconnect her or her service before the usual 2 year contract ends. The fee is levied to recoup the discounts provided on phone sales. If a customer gets a discounted cellphone, they have to sign a contract promising to remain loyal to the carrier for a set no of years, typically 2 years. If the customer breaks the contract and leaves before the end of the contract term, they are liable to pay the ETF.

Mr Martin wants to regulate the ETF amount and tie it to the price of the device. It may be logical to suggest that a $200 device does not warrant the same ETF as a $500 device. Also Mr Martin wants to reduce the length of the contracts and let consumers jump ship sooner. It is all about consumer choice.

There have been lot of class action lawsuits recently on ETFs and per Mr Martin’s plan, states won’t be allowed to entertain class action lawsuits on these topics once FCC starts regulating the ETF and contract practices.

On this one, FCC is with the consumers..

MT