By ReutersInformationWeek
One of the major U.S. wireless carriers told Federal
Communications Commission Chairman Kevin Martin that it had
made "substantial progress" toward a compromise with consumer
advocacy groups over the fees, Martin said Friday.
Martin did not say which carrier he had spoken with, but a
source familiar with the discussions identified it as No. 2
U.S. mobile service, Verizon Wireless.
"I think it would be good for consumers and ultimately good
for the industry if there was more of a national framework with
consumer protections built into it," Martin said at a media
briefing.
The early cancellation fees are a perennial complaint of
wireless phone customers, and have drawn complaints from some
lawmakers in Congress.
Wireless carriers such as Verizon Wireless, AT&T, and
Sprint Nextel say the fees are needed to ensure they
recover the subsidies they provide for handsets that customers
get under the most popular service plans, as well as other
up-front costs and rate discounts for those plans.
Verizon Wireless is a joint venture of Verizon
Communications Inc and Vodafone Group.
Martin listed several concerns he has about the current
early termination fees, including that the fees go into effect
even before customers receive their first bills, and that in
some cases they remain high even as a customer's contract nears
expiration.
Verizon Wireless already prorates the early termination
fees, reducing them as customers' contracts get closer to
expiring. AT&T is scheduled to begin prorating the fees
starting Sunday. Sprint Nextel has indicated will do so by
the end of this year.
The compromise floated by Verizon Wireless would place
additional restrictions on the fees the carriers could charge,
and it would shift oversight of the fees to the FCC from state
regulators, the source said.
The deal would benefit the industry by taking the dispute
over the fees out of the jurisdiction of state courts, where
the companies are currently facing a number of class-action
suits filed by customers.
According to a filing with the agency, executives with
Verizon and Verizon Wireless met with FCC officials Tuesday
to discuss the early termination fees.
The Associated Press reported earlier this week that
executives of other leading wireless companies had also agreed
to the terms of the Verizon Wireless proposal.
A spokeswoman for Verizon Wireless declined to comment.
Martin said at the news briefing that consumer groups
"still have concerns" about the proposal. "I'm not sure there
was any consensus yet built around it."
The commission is scheduled to hold a public hearing on the
issue on June 12.
(Editing by Tim Dobbyn)
Copyright 2008 Reuters. See original article on InformationWeek
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