WASHINGTON-A group of 14 Democratic House members led by Rep. Anthony Weiner (D-N.Y.) asked the Federal Communications Commission to reject a wireless-industry petition that would prohibit state regulation of early-termination fees.
“Consumers win when they have choices. Early-termination fees take away consumer choice, which is so essential to ensuring that cell-phone companies provide the best services at the best prices,” said Weiner. “The FCC should reject this industry request. We cannot allow the federal government to essentially tie the hands of state courts and legislatures who wish to protect consumers by safeguarding their freedom of choice.”
CTIA in March asked the FCC to rule that state regulation of early-termination fees is rate regulation and prohibited under the Communications Act.
In a letter to FCC Commissioner Kevin Martin sent Thursday, the lawmakers said that the use of early-termination fees is a tactic by mobile-phone carriers to circumvent the benefits of wireless local number portability.
“We supported WLNP because it forced cell-phone companies to become more consumer friendly. Once consumers could take their phone numbers with them, they were no longer handcuffed to a company that treated them badly or delivered poor service. The point was to increase competition, thereby improving service quality,” reads the letter sent from Capitol Hill. “We believe that early-termination penalties undermine the purpose of cell-phone number portability. Consumers are still locked into poor service, even though they can keep their phone number, because they will have to pay a substantial penalty if they choose another phone company.”
The lawmakers believe early-termination fees are unfair and anti-competitive.
“Early-termination penalties are charged whenever the customer requests a change in service, accepts a promotional offer, adds an additional line, and for any other change in service. Early-termination penalties of $175 or more lock many consumers into months or years of poor cell-phone service that they don’t want. That is unfair and anti-competitive,” said the lawmakers. “Cell-phone contract periods are extended each time a customer changes a term of their service agreement. So a customer can be charged a so-called early-termination fee even after using the same company for three, four or five years. We can find no justification for these practices other than to restrict free competition.”
