Klobuchar slams AT&T rate hike

Minnesota Senator Amy Klobuchar slammed AT&T Friday for its decision to double the penalty for users who cancel service to their smart phones.

According to Klobuchar's office, AT&T recently sent a letter to customers informing them the early termination fees (ETF) for smart phones such as the iPhone and Blackberries will soon double from $175 to $350. At the same time the ETF fee on basic phones will decrease from $175 to $150. Klobuchar called for Congress and the FCC to take action to protect consumers.

"AT&T is forcing its customers to pay a price to get their freedom and that's not right," Klobuchard said in a statement. "Too often customers find out after committing to a multi-year contract that their wireless service doesn't meet their needs, and changing your wireless provider shouldn't break the bank. Once again wireless providers have shown that they would rather use arbitrary fees than network and service quality to keep customers."

AT&T is the exclusive carrier for Apple's iPhone in the U.S., making it one of the nation's largest providers of smartphone service plans. The new fee structure would discourage iPhone and other smartphone users from cancelling their AT&T accounts before the original service agreement has expired.

In December Klobuchar introduced the Cell Phone Early Termination Fee, Transparency and Fairness Act (Cell Phone ETF Act) when Verizon Wireless made the same increase in its ETF fees for smart phone customers ($175 to 350). The bill was co-sponsored by Democratic Senators Russ Feingold, Wisc., Jim Webb, Va., and Mark Begich, Ak and has been referred to the Senate Committee on Commerce, Science and Transportation.