FCC to Verizon: Explain ETFs, Web Charges

Fri, 12/04/2009 - 7:05am
Monica Alleven, Wireless Week

Now Verizon Wireless is on the hot seat to answer questions from the FCC. Specifically, the FCC wants to know the rationale behind the increase in early termination fees (ETFs) for an “advanced device.”

FCC Wireless Telecommunications Bureau Chief Ruth Milkman sent a letter, posted on the FCC’s Web site today, to Verizon Wireless General Counsel Steve Zipperstein asking him to answer, by Dec. 17, a list of at least nine questions related to ETFs and Verizon’s Mobile Web service.

The letter refers to press reports that indicate Verizon doubled its ETFs for certain advanced devices on Nov. 15 and comes as U.S. senators seek to set limits on ETFs through legislation. The FCC letter also refers to another press report that raised questions about whether consumers are being charged for minimal, inadvertent use of Verizon’s mobile Web service.

“In light of the Commission’s ongoing interest in the issues associated with ETFs and its pending proceeding regarding disclosure of billing information to consumers, we seek a more complete understanding of these practices,” the letter states.

Among the list of questions, the FCC asks Verizon to explain the cost differentials that Verizon pays for advanced devices over what it charges its customers; how the levels of ETFs, together with terms and conditions, relate to cost differentials; what kind of information the carrier provides to prospective customers and when; as well as how customers can learn about the formula for prorating the ETF. The FCC also wants to know details of any trial period in which customers may discontinue service without being subject to the ETF.

In relation to mobile Web charges, the letter refers to a New York Times article suggesting customers may be charged $1.99 for inadvertently accessing Verizon’s Web service. The FCC wants to know if there’s a minimum data amount or level of access that triggers charges and if so, the amount or level of access. “Which phones sold by Verizon have individual keys pre-programmed to provide for one-press access to various Mobile Web services? Is it correct that customers are charged for minimal, accidental usage by customers using these phones?,” the FCC asks.

The FCC has sent similar letters asking for details from other companies in the past, such as Google with its Google Voice service, as well as AT&T and Apple. The FCC says Verizon can request can information or documents be treated in a confidential manner.

Verizon Wireless spokesman Jeffery Nelson today said the company fights “day-in, day-out to meet and exceed our customers’ expectations. We do that by constantly improving how we do business.” He also notes that nobody is required to pay an ETF; they can buy a phone at full price with no ETF.

As for the mobile Web charges, “we’ve heard from very few customers who accidentally accessed their Web browsers, and we immediately credited them $1.99 per month for the problem. A few months ago we modified our service plans so when somebody accidentally turns on a data service they don’t want, and they quickly turn that service off, there’s no charge.  Even if this happens a few times a month, there shouldn’t be a charge on the bills.”

More Broadband Direct 12/04/09:
•  ACA wants regulatory scrutiny of Comcast-NBCU
•  Comcast, NBC deal will face tough antitrust review
•  Qwest, Verizon closing call centers
•  PUCs claim Verizon neglects DSL subs
•  Senators Propose Limits on ETFs
•  FCC to Verizon: Explain ETFs, Web Charges
•  Broadband Briefs for 12/04/09



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