The FCC has expanded its formal inquiry into wireless carrier practices first conducted last month by sending formal letters to AT&T, Google, T-Mobile and Sprint along with Verizon Wireless regarding each respective companies’ methods for explaining the early termination fee to their customers. The FCC stated in letters to the companies on Tuesday that since there is not an industry standard termination fee, consumers must be able to understand what they are signing up for when they choose a service plan with an early termination fee.
Verizon Wireless triggered the initial FCC investigation last year when the carrier caused an uproar by raising ETFs for smartphone users who decide to end the agreement early to $350. FCC chairman Julius Genachowski is requesting more specific details after Verizon’s response to the initial FCC inquiry last month had raised more questions instead of answering the questions given by the commission.
In a similar vein, Google made waves after the launch of its Nexus One earlier this month when it was confirmed that customers who bought the phone with T-Mobile service would have to pay 2 ETFs, one for the T-Mobile service contract and one to Google for the difference of the device subsidy, a common practice by third-party authorized dealers to recover the difference in phone cost making up for the deeper than average device subsidy.