The Federal Communications Commission has a long and disappointing history of generally failing to regulate ever-larger media and telecommunications companies, except, during fits of prudishness, in the area of so-called indecency. But the latest incarnation of the FCC is proving to be more of a consumer advocate than its predecessors.
Under the leadership of Julius Genachowski, the commission shocked the tech world by prying into the secrecy of Apple, AT&T and Google.
Around the same time, the chairman made a strong push for net neutrality—a principle that interferes with the profit motive of certain Internet service providers while benefiting the average user.
The FCC’s latest salvo on behalf of John and Jane Q. Public comes in the form of a letter to Verizon Wireless asking, in so many words, how the company justifies charging its subscribers $350 to get out of their contracts.
This can get very wonky very fast, but the commission’s aggressive interest in things like fees and app stores is a refreshing change from just a regulatory body that also has to worry about satellites, white space and boobies.
A little background, if you’re interested: In the U.S., most cell phones are sold with a subsidy. In exchange for committing to a two-year contract, the carrier knocks $200 or so off the price of the phone. Subscribers who break that contract are penalized an early-termination fee, which is typically about the same dollar amount as the subsidy, minus a deduction for each month of the contract the customer has fulfilled. If they give you a $200 discount and you stay only a year, you owe them $100. It’s pretty hard to argue with that logic.
Verizon has completely upset that delicate fairness by upping its early-termination fee for “advanced devices”—pretty much any phone of real interest or use—to $350. And its prorate scheme is such that if you stick to your contract for all but one month of the two years, you still owe $120.
As if that weren’t enough, it seems Verizon has been sneaking $1.99 data usage fees into the bills of unsuspecting customers.
Go get ’em, Julius. And could you please do something about rampant media conglomeration and this Adam Lambert nonsense? —PZS
Read more about it on Engadget / in The Wall Street Journal / in the FCC’s letter to Verizon.