Sunday, December 20, 2009

USA - Verizon says mobile phone cancellation fees help the poor

[wired] Verizon defended its early termination charges for cellphone contracts Friday, telling federal regulators that the high fees help the poor by making it more affordable for them to access the mobile internet.

The Federal Communications Commission asked the nation’s largest wireless carrier earlier this month to explain why it had raised the fees for breaking a mobile phone service contract to $350 for its smartphones. In a response that gave no ground to an increasingly active FCC, Verizon said the fees were a necessary and good way to subsidize expensive smartphones so that users don’t have to pay for the hardware up front, so long as they sign a two-year contract.

That arrangement “enables many more consumers, including those of more limited means, access to a range of exciting, state of the art broadband services and capabilities,” Verizon VP Kathleen Grillo wrote. “The company’s pricing structure therefore promotes the national goal of fostering the greater adoption and use of mobile broadband services.”

Verizon raised the fees in November, with a $10 discount for each month of the service contract fulfilled for smartphones. Even so, if a customer cancels on the last day of their 2-year contract, they’d have to pay Verizon $120 for early termination.

Mobile Phone Cancellation Fees Help the Poor, Verizon Tells Feds

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