FCC to Verizon: Why the fee hike?

The Federal Communications Commission today sent a letter to Verizon Wireless asking for more information about its decision to increase its "early termination fees," or the fees the carrier charges customers who leave their service contracts early.

"In light of the Commission's ongoing interest in the issues associated with (early termination fees) and its pending proceeding regarding disclosure of billing information to consumers, we seek a more complete understanding of these practices," the letter said.

To that end, the FCC asked a series of questions focused on the economics of the fees. For example, what formula is used when pro-rating the fees, why the company chose to increase the fees for smartphones, how much Verizon Wireless pays for smartphones, and whether the carrier is contemplating similar increases in fees for other services and devices.

Verizon Wireless has until Dec. 17 to answer the questions.

Yesterday, Sen. Amy Klobuchar (D-Minn.) and others introduced a bill that would limit the fees cellphone carriers charge when customers drop their plans or switch to a different carrier.

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