The Next Big Thing in Broadband: Early Termination Penalties

THE NEXT BIG THING IN BROADBAND: EARLY TERMINATION PENALTIES
[SOURCE: Consumers Union]
Broadband Internet providers are increasingly imposing early termination fees to keep their customers from straying away for a better deal somewhere else. Such fees have been a routine part wireless phone contracts for years, but only recently have they begun to show up in the broadband business. Typically, the fees are included in the fine print of long-term contracts of a year or more. Many of the low-priced promotional offers offered by the companies require customers to sign such long-term contracts. A survey of the country's top broadband providers by www.hearusnow.org shows that many are now including early termination fees in their contracts, with penalties of $200 or higher for consumers. The widespread adoption of early termination fees in the broadband business should worry consumers, according to Jeannine Kenney, senior policy analyst at Consumers Union. "Cancellation penalties are anti-competitive and deprive consumers of the benefits of competition in the markets where there is more than one broadband provider," says Kenney. "The justifications for them are suspect. Once enticing consumers to sign up, broadband providers should rely on quality and service to build customer loyalty, not onerous contract terms that hold consumers hostage."
http://www.consumersunion.org/blogs/hun/2007/04/the_next_big_thing_in_br...