Disqus
Taxes, death, and ETFs are the only sure things in life. But, that may all change with the FCC Chairman Kevin Martin’s new proposal for ETF (early termination fee) regulation.
As we’ve said before, ETFs are something of a necessary evil. Wireless carriers use ETFs and long-term contracts to ensure that they’ll recoup the cost of subsidizing a high-priced handset to make mobile phone purchase prices reasonable to the average consumer. An early termination fee essentially guarantees that a carrier won’t lose any handset subsidization-money if a subscriber ends their wireless contract early. And, lower purchase prices also drive revenue for both hardware vendors. But, when is enough enough?
The FCC’s Martin’s new plan to regulate the US’s ETF policies is the first step toward putting termination fee control in the hands of the Feds. Responding to increased consumer demand for ETF policy overhauls, Martin has proposed that ETFs should reflect the cost of the handset – customers that purchased more expensive handsets should pay higher ETFs than those that purchased lower-cost phones. And, customers should be offered a first-month trial before any ETF goes in to effect.
Martin also wants ETFs to be pro-rated – which reduces the ETF based on remaining contract length. And, seeing as how most carriers are already offering or plan to offer pro-rated ETF policies (and Sprint has even waived it for government employees), Martin’s pro-rating wishes are already coming true.
State officials don’t want their consumer protection authority to be completely preempted by the Federal government, so we expect a good amount of back and forth between state-level officials and the FCC before this whole ETF deal gets ironed out. Let’s hope the FCC’s ETF regulation doesn’t end up hurting the consumer…
[Via: AP]
About The Author
Will Park
Will hails from The City of Angels - Los Angeles, California. He spends his time playing with his numerous gadgets and looking forward to seeing what future holds for mobile technology. An avid promoter of a fully "digital" life, he promotes the widespread adoption of truly mobile, paper-less living. He dreams of the day when he can go completely digital. No more snail mail, paper receipts, bound books, notepads/spiral notebooks, credit cards, hard currency. He's a digital warrior - fighting for the converged life. He is an idealist and a realist - he has a perfect view of what the world should be but knows that the world is not perfect. Can we ever hope to see Will's dream become reality? We'll see...
