It looks like Verizon managed to not only confuse and anger consumers with the memo they sent to the FCC in defense of the $350 “advanced devices” ETF. Turns out, the FCC was none too pleased to hear that Verizon was using its “early termination fee” to help pay to keep the lights on in their retail stores. Federal Communications Commissioner Mignon Clyburn on Wednesday issued a stern statement to Verizon Wireless, referring to the wireless carrier’s ETF justification as both “unsatisfying” and “troubling.”
Verizon’s recent letter to the FCC basically outlined their rationale for charging $350 – double the normal $175 penalty – for canceling a Verizon Wireless contract on smartphones like the Motorola Droid. The company reasoned that they needed to charge the higher ETF in order to help pay for high-end mobile phones. That much made sense. So, why the higher than normal penalty for smartphones? Verizon says they need that money to help pay for the advertising cost, store costs, and even to help pay for sales commissions. That’s the part the Feds are having a hard time understanding. Clyburn also expressed concern over Verizon’s Mobile Web browser for charging “phantom fees for inadvertently pressing a key on their phones thereby launching Verizon Wireless’s mobile Internet service.”
“I am concerned about what appears to be a shifting and tenuous rationale for ETFs,” wrote Commissioner Clyburn. Then, to hammer her point home, she notes that wireless carriers can attract and keep new customers with “innovative products, maintaining affordable prices, and providing excellent customer service.”
The best part, though, is Clyburn’s parting statement. “I look forward to exploring this issue in greater depth with my colleagues in the New Year.” It should be an interesting New Year for Verizon.
FCC statement (PDF link)