Verizon Wireless said part of the reason its early-termination fees are more expensive for advanced devices is because the difference between what it pays manufacturers vs. what it sells devices for is twice as large for advanced handsets vs. other devices.
The carrier filed a 13-page response Friday to an earlier Federal Communications Commission inquiry about why VZW increased its ETFs on certain advanced handsets from $175 to $350. Verizon Wireless contends its ETF of $350 is fair, and if the carrier prorated its ETF on advanced devices so it would be zero in the 24th month of a contract, it would have to start with a higher ETF, especially since most customers who churn do so early on in the contract, not in the last months of a contract. VZW also said its higher ETF helps pay for the mobile broadband network, associated advertising with the higher-cost devices and associated employee training required for the advanced devices.
The commission and several congressmen are questioning ETF policies at carriers. A recent GAO report found early-termination fees are a top consumer complaint.