Government report blasts wireless fees

Wireless carriers are already under fire from the Federal Communications Commission (FCC), and today a new government report threw on more fuel to that fire, especially regarding carriers’ early termination fees.

The U.S. General Accountability Office, in a 65-page report to Congress, noted that even though most Americans are satisfied with their overall cell phone service, many millions of cell phones users are still dissatisfied with their service contracts.

Based on the GAO’s own survey of 1,143 adult cell phone users, 42 per cent said they wanted to switch carriers for various reasons, but did not switch because they didn’t want to pay an early termination fee.

Carriers charge early termination fees for leaving a two-year or multi-year contract before the term ends, and they can cost a customer hundreds of dollars.

Verizon Wireless recently announced it was doubling its early termination fee to $350 on some smartphones, up from $175, on a two-year contract.

U.S. Rep. Edward Markey, D-Mass., said in a statement today that the early termination fees are a key reason for consumer dissatisfaction with carriers.

“In the digital age, where technology can change overnight, consumers should not be chained to their wireless provider for years through exorbitant early termination fees,” said Markey, who requested the GAO report when he chaired a House subcommittee on telecommunications and the Internet.

U.S. Rep. Henry Waxman, the chairman of the energy and commerce committee, added in a statement that it is “critical” for the FCC and Congress, along with the carriers, to closely monitor billing, fees and customer service regarding wireless use.

The non-profit consumer group Free Press added its voice to the concern, saying that carriers cannot justify the early termination fees. “The FCC must act and put a stop to the anti-consumer practice…,” a policy lawyer for Free Press, Chris Riley, said in a statement.

Verizon Wireless has been asked by the FCC to explain its recent early termination fee increase and must file a response by Dec. 17. A spokeswoman at Verizon did not respond to a request for a comment, although Verizon and other carriers have been filing written responses to FCC inquiries in recent weeks on a range of topics involving customers and competitiveness.

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