Wyden Calls For FCC Probe Of ETFs

In a letter to Federal Communications Commission Chairman Julius Genachowski, Sen Ron Wyden (D-OR) called for an investigation into early termination fees (ETFs).

An AT&T spokesman said the fees help offset the deep discounts that his company and others offer for high-end handsets such as the iPhone. He also noted that while it did boost its ETFs for some smart phones it also lowered the fees on some less-advanced phones from $175 to $150.

But Sen Wyden dismissed such claims and pointed to Verizon Wireless' response to questions posed by the FCC last year about ETFs. He noted that the fees do not seem to be linked directly to the cost of the devices. "Given Verizon Wireless' response to the FCC's 2009 inquiry regarding ETF structures for 'advanced devices,' it appears that the cost of these termination fees are based on much more than recouping the wholesale cost or retail value of the wireless device," Sen Wyden wrote, adding that Verizon's response indicate that the fees also are aimed at recouping costs and risks of providing service including advertising, commissions, store costs and network costs. He asked the FCC to examine the extent to which monthly service charges for voice and data communications are set to help pay the costs of wireless devices for all subscribers and whether any national providers have reduced their monthly fees once they have recouped the cost of a handset.