FCC Chairman hints at federal regulation of cellphone industry

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Stopping short of coming out and saying the FCC would start regulating cellphone company early termination fees, FCC Chairman Kevin Martin did publicize ideas for how such regulations would work. I’ve met Kevin Martin and he’s a very intelligent man, though I normally disagree with his ideas. This one, though, I love.

Right now carriers are free to come up with any fees they want, knowing if the customer wants to sing up badly enough they’ll do it despite the fine print. That means most people face fees of about $200 to cancel their contracts, even if they only have a few months left.

The chairman’s idea would eliminate that problem, calling for pro-rated fees. The longer you’re in-contract, the less you’ll pay to get out. This is fair. Also, more expensive phones would be allowed to have such high fees, but cheaper handsets — like the RAZR, for example — would have lower fees. This also makes sense, as being locked into a two-year contract with a $200 early termination fee doesn’t make sense for users who get basic handsets.

One interesting idea he also put forth calls for companies to have reasonable time frames, maybe a year, for contracts, and not require users to re-up the entire contract for service upgrades.

So there’s a plan for a plan, but no real plan for FCC regulation. That being said, we think it’s only a matter of time before the FCC steps in and keeps the carriers from pillaging your bank account they way they are now.

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