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FCC inquiry into early termination fees praised

January 26, 2010

Consumers Union Praises FCC Inquiry into Wireless Early Termination Fees

WASHINGTON, D.C. – The Federal Communications Commission today sent letters to four major wireless providers and Google to gather information about the consumer experience with wireless early termination fees.
Joel Kelsey, policy analyst for Consumers Union, the nonprofit publisher of Consumer Reports magazine, made the following statement today following the FCC’s announcement:
“We are glad the FCC is beginning to ask tough questions about this unfair practice. Wireless carriers have been using early termination fees to limit consumer choice and punish subscribers in search of competition for years. Consumer Reports magazine reported this month 17 percent of our readers with wireless phone contracts wanted to switch providers, but didn’t because of early termination fees.
“If consumers choose to change carriers because of inadequate service or steep prices, they should be free to do so without financial retribution. If consumers move outside a carriers’ service territory, they should not be forced to pay hundreds of dollars to end their two-year contract. If carriers want to offer subsidies on expensive smartphones to attract consumers, they should be up front and transparent about the size and cost of that subsidy to the consumer. We look forward to the next several steps the FCC takes to protect wireless consumers from abusive practices.”

Consumers Union of United States, Inc., publisher of Consumer Reports®, is a nonprofit membership organization chartered in 1936 to provide consumers with information, education, and counsel about goods, services, health and personal finance. Consumers Union’s publications and services have a combined paid circulation of approximately 8.3 million. These publications regularly carry articles on Consumers Union’s own product testing; on health, product safety, and marketplace economics; and on legislative, judicial, and regulatory actions that affect consumer welfare. Consumers Union’s income is solely derived from the sale of Consumer Reports®, its other publications and services, fees, noncommercial contributions and grants. Consumers Union’s publications and services carry no outside advertising and receive no commercial support.
David Butler, 202-719-5916