The other shoe has finally dropped for Verizon. Responding to customer and press complaints about Verizon’s changed early termination fees (ETFs), and mobile web billing practices, the Federal Communications Commission (FCC) has decided to ask a few questions.
Verizon recently changed its policies regarding ETFs-- it doubled them for new customers who opt for smartphones. Makes sense, given that Verizon’s initial subsidy of smartphones is greater--if a customer bails before their agreement is up Verizon would like to get its money back. David Pogue, at The New York Times , does the math and figures that at the end of a two-year contract there’s still $110 left on the ETF. He asks the obvious question: “Shouldn’t the fee go down to zero at the end of your contract?”
The FCC wants to know just how much information Verizon is divulging to new smartphone customers about the ETF: how it’s calculated; how much will be due at the end of the contract; and how can it be avoided. The FCC also wants clarification on how the ETF is prorated. Like Pogue they are curious about why any fee should remain at the end of a contract.
Verizon’s “Wireless Mobile Web” is also under scrutiny. Verizon hardwires access to its mobile wireless service to a phone button. Can’t be changed. Can’t be disabled. Users accidentally pressing the button wind up with a $1.99 charge on their monthly bill--even if they cancel the mobile web request immediately. Pogue relates from a Verizon insider that Verizon’s phones are designed with this ‘feature,’ and that some 87 million customers each month will accidentally hit the mobile web key. A little more math from Pogue reveals that to be $300 million per month of revenue from a simple mistake.
Like with ETFs, the FCC wants to know how Verizon’s mobile web service; how much information is given to customers about the service; what protections they receive; and why the heck can’t customers reprogram their phones to prevent this.
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