Verizon Defends Its Fee-Doubling Self

In an unusual move, the FCC makes public a letter from the company responding to complaints

Could Santa for cell phone users be dressed in the guise of the Federal Communications Commission?

As consumers and some congressmen complain that fees for early termination of cell phone contracts are growing — some have recently doubled — the FCC is publicly pressuring cellphone companies to explain and justify the fees.

On Dec. 4, the FCC wrote Verizon amidst press reports that its fees for so-called “advanced” cell phones have doubled to $350 — asking publicly for a detailed explanation of the fees.

Friday, it took the unusual step of issuing a news release to detail Verizon’s 77-page response to the inquiry. It was a move some might is a bit of a bully pulpit warning to the companies about moving forward with higher fees.

In the letter to the FCC, Kathleen Grillo, senior VP of federal regulatory affairs for Verizon, said the early termination fees help to promote consumer choice and broadband deployment.
“This pricing structure enables Verizon Wireless to offer wireless devices at a substantial discount from their full retail price,” she wrote. “By reducing up-front costs to consumers, this pricing lowers the barriers to consumers to obtaining mobile broadband devices. It thus enables man more consumers, including those of more limited means, access to a range of exciting, state-of-the-art broadband services and capabilities.”

Consumer groups who have been lobbying against the fees and calling for congressional action weren’t exactly crying, “Bah, humbug” at Verizon’s response. But they weren’t totally pleased, either.

Chris Riley, policy counsel at Free Press, accused Verizon of “blowing smoke” and not directly answering the agency’s question about the need for the fee. He suggested that the right answer was more competition for cellphone users.

The letter “indicates that Verizon is more concerned with protecting its bottom line than protecting unsuspecting customers from outrageous penalty fees that just can’t be justified,” Riley said in a statement.

Verizon didn’t immediately reply to a request for comment.