I'll Show You Competitive...AT&T Jacks iPhone Termination Fee

As of June 1, AT&T's early termination fee on smartphones -- including the iPhone -- will climb to $325 from today's $175.

Carriers justify early termination fees because they subsidize the price of hardware for cellphone buyers in exchange for those buyers agreeing to a one- or two-year contract. Verizon last year raised eyebrows when it increased its termination fee on smartphones to $350 and had to justify its moves to the FCC. No one was impressed with its defense, but Verizon is still charging the higher ETF (although it is now dropping the amount owed each month by $10). AT&T will also lower the fees by $10 a month, and is lowering the early termination fees on non-smartphones to $150 from $175.