Sprint Nextel is the latest carrier to reduce its early termination fees (ETFs). The company may start doing so in December after a new billing system is installed, CEO Dan Hesse told the Associated Press recently.
Such fees can sometimes be hundreds of dollars and are often the target of customer anger. Carriers say the fees are needed to recover phone subsidies, a cost which is normally factored into the length of a typical two-year service contract.
AT&T, Verizon Wireless and T-Mobile already made similar announcements. Verizon settled a California lawsuit this summer, agreeing to pay $21 million.
FCC Chairman Kevin Martin outlined a plan to regulate the fees, but that may be mooted if carriers willingly make changes.
Meanwhile, Qwest is currently facing a lawsuit regarding early cancellation fees (story here). Qwest had attempted to charge two departing customers ETFs of $200 each. In neither case did Qwest have any record of informing those two customers that such fees applied. The two filed what they intend to be a class-action suit.
There’s some potential that the suit might lead to an invalidation of ETFs, or at least of ETFs that cannot be economically justified.
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