Early Termination Fees Terminated

We are in the middle of a major change in the way wireless carriers and others handle their Early Termination Fees (ETFs).  Until recently, if you ended a Wireless or Internet contract early, you’d be charged an average fee of $200 (or more) to cancel your account. 

An inability to get out of contract with a carrier who has offered poor service or coverage has enraged customers and has resulted in volumes of complaints.  States have been moving toward regulating this and other aspects of the wireless industry.  Even FCC Chairman, Kevin Martin, has proposed a plan to regulate the fees that wireless carriers charge customers for ending their contracts early. 

Suddenly, the carriers are falling over themselves to change their policies and prorate the termination fees of their customers.  Sprint, Verizon, AT&T, and T-Mobile have all made changes, or will do so by the end of the year.  They argue that since they have changed, no regulation of the industry is necessary. 

Now the phenenomon may potentially spread to Internet carriers as well.  Two Qwest Communication DSL customers are suing the carrier over Early Termination Fees. 

And while the change in practice regarding ETFs may seem like bad news for the carriers, it actually allows them to better compete with each other and fight for customers based upon service, price, and features rather than length of contract.  This could have a very positive effect for carriers with popular phones, plans, and customer service.  In an age where everyone already seems to have a Cell Phone, carriers are forced to grow their business by offering new services and by stealing customers away from their competitors. 

Features and customer service, rather than contracts, may end up determining which carriers customers ultimately choose in the future.