New Wireless ETF Policies Compared – T-Mobile's two-year plan pales in comparison to AT&T & Verizon''s.

In: broadbandreports.com|Site Feeds|VoIP

28 Jun 2008

Consumer Reports (via the Consumerist) has an interesting post that compares the new early termination fee (ETF) policies wireless companies have been migrating to. A Consumerist graph (below, right) highlights how T-Mobile’s new ETF system doesn’t give discounts until very late in your contract. It also explores how AT&T and Verizon’s new policies are very similar ($5 is taken off of your ETF for each month under contract), though Verizon offers discounts more quickly that AT&T. Says Consumer Reports:

while T-Mobile’s announcement is welcome, its pro-rating is in some ways less generous than the schemes for Verizon and AT&T, the other majors who pro-rate their termination fees. T-Mobile’s $200 fee, the highest among the three companies, doesn’t actually drop at all for the first year-and-a-half of two-year contracts. When it does, it drops to $100 from the nineteenth through twenty-first months.

Note that Sprint doesn’t pro-rate ETFs, but they’ve stated that they will soon. The report notes that T-Mobile’s new ETF plan does look more appealing for users under a one-year contract, but the Verizon Wireless policy comes out on top.

This shift to new ETF policies was prompted by Attorneys General and class action lawsuits concerning the misleading marketing of ETFs. Carriers are currently lobbying the FCC to pass wimpy federal guidelines (laws requiring carriers do things they’re already doing) that would invalidate the stronger state-level consumer protection laws that prompted these changes in the first place.
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