Bust a Deal, Face the Wheel
Posted by Jeff as Wireless
Sprint lost a pretty significant case involving the early termination fees (ETFs) here in California. A contract is a contract and I’m not inclined to cheer the court action nullifying a valid contract between two parties, however it’s also clear that cell phone companies have profitably abused ETFs (e.g. attaching an ETF to a renewal contract even when the consumer didn’t get a new handset) and something needs to be done.
Verizon has a proposal to the FCC that is pretty reasonable. Basically what they are calling for is a national policy on ETFs that allows an opt-out period (similar to a cooling off clause), pro-rated ETFs, and lastly, no ETFs for contract renewals unless the consumer receives a new handset.
While I think this is an issue that needs to be dealt with at a regulatory level, I am not inclined to support judicially inspired chaos that will result from each state regulating the issue independently. What will be a natural consequence of such a market would be handsets that are rendered inoperable on carriers other than the one originally sold on and that can’t be a good thing.
Bonus link, the NY Times has a good piece on ETFs.