Back on Nov 15th we reported that Verizon Wireless had increased it’s cancellation fee for smartphones like BlackBerry and other advance devices to $350. Also in a separate story, Verizon Wireless has been accused of charging some customers a $1.99 unintentional data usage fee on standard cell phones. The FCC took notice after several consumer complaints and started an inquiry on why Verizon changed it’s Early Termination Fee (EFT) and the data usage charge. Phil Goldstein over at FierceWireless published this report on Verizon’s response to the FCC inquiry.
Full Report:
Verizon Wireless strongly defended both its new early termination fee (ETF) policy and the minimum data charges associated with mobile Web access. The company argued that the fees promote consumer choice and broadband deployment and said that ETFs allow it to “offer wireless devices at a substantial discount from their full retail price.”
Earlier this month, the FCC sent a letter to Verizon asking the nation’s largest carrier to explain its recently announced “advanced devices” ETF, which raises the pro-rated fee to $350 for devices including netbooks and some smartphones. The FCC also questioned the $1.99 fee Verizon charged some users for unintended mobile Web access, following media reports about the incident. In November, Verizon announced it would raise its ETF from $175 to $350 for what it termed “advanced devices,” which include some netbooks and smartphones. Verizon pro-rates the new ETF at $10 per month.
In a letter to the FCC, Kathleen Grillo, Verizon’s senior vice president for federal regulatory affairs, defended the higher ETFs as a simple case of economics. Verizon said that the difference between the amount Verizon pays handset OEMs for devices and the subsidized price of the device is more than twice as large for advanced devices as it is for basic devices.
Additionally, Verizon said that it incurs additional costs to sign up customers, such as advertising costs, commissions for sales personnel and store costs. The company said it had no plans to raise ETFs for other devices and services right now, but could decide to do so in the future.
Regarding the unintended mobile Web charges, Verizon said that a minimum usage fee of $1.99 applies only “when a customer launches the Internet browser and then navigates away from the default mobile Web homepage to sites other than a Verizon Wireless customer care site. Usage fees are not charged when a customer simply launches the Internet browser and lands on the Verizon Wireless mobile Web homepage, which is the default setting.”
The company said that certain devices can be re-programmed to remove (or add) the browser link from the main menu of a device “but this option is not available on all mobile Web capable devices.” Verizon said most devices have features in which users can lock their screens, and that a data block can be applied when a customers buys a device and a mobile Web block can be applied online.
< Phil Goldstein: FierceWireless>
So do you think Verizon is justified for it’s actions based on their response? Post a comment at let us know?
