Verizon Wireless responds to FCC complaint regarding its early termination fee and Mobile Web charges

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On Friday afternoon, Verizon Wireless issued its response to the FCC complaint which investigated the carrier’s increased early termination fees for advanced devices and the spurious charges some customers incur when accidentally accessing the Mobile Web. As expected, Verizon defended the increased ETF and dismissed the accusation that it charges customers $1.99 for accidentally connecting to the Mobile Web. Verizon justifies its increased ETF by claiming that the fee is not limited to the recovery of the wholesale purchase price of the device. The fee is also necessary to partially offset the cost of running a smartphone network. There is a cost to sell the device (advertising, commission, store costs, device subsidy), a cost to technically support the device, and a cost associated with maintaining a broadband network. Verizon also reminds the FCC that the number of advanced devices is increasing and “the overall cost to the company for providing and supporting  devices to customers at low up-front cost has increased substantially”. When asked why a person canceling in the 23rd month of a 24 month contract still has to pay a $120 ETF, Verizon responded by claiming that it “still incurs a financial loss from early terminations, even with the $350 ETF”. If the ETF was prorated to$0 at the end of the contract, Verizon would be forced to charge a higher starting ETF and customers would be worse off. When you consider what Verizon has said about its need to increase its ETF, also consider the fact that Verizon’s revenue from its data services grew to $4.1 billion in Q3 2009, up 48.1 percent and up 28.9percent on a pro forma basis. In the midst of all this talk  about expenses, Verizon conveniently left that information out. Now that we have seen what Verizon thinks about its ETF, let’s examine what it said about its erroneous $1.99 Mobile web charges. Hit the jump for all the details.

Rather than admit any culpability for the numerous reports of erroneous Mobile Web data charges, Verizon denied that any error exists. Repeatedly in the report, Verizon stated that they do not charge usage fees ” when a customer simply launches the Internet browser and lands on the Verizon Wireless Mobile Web homepage”. Usage fees of $1.99 per megabyte are only charged when a customer navigates away from this launch page. Verizon explained that phones can be programmed to prevent the accidental launch of the web browser and confirmed that customers can place a data block on their account. Unfortunately, Verizon’s explanation does not jibe with the numerous reports of incorrect Mobile Web charges from both Verizon Wireless customers and Verizon Wireless employees. The FCC is currently reviewing Verizon’s response, let’s hope they are thorough.

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129 Comments
  • JB

    Web block? No problem if you don’t mind losing MMS. Only 1XRT can send SMS. MMS is used over EVDO

    • Kevin

      Not true

  • Scott

    If Verizon were to offer cheaper plans, like tmo for buying a phone at full price, then they could have the $350 ETF stick. Otherwise, it’s just pure BS to suck more money out of their customers. And I thought att was bad. lol

    Posted from BGR Mobile (iPhone) at: Phoenix North America

  • NoFan

    @ Scott…posted from Iphone…what do you care? Really. But anyway…ETFs don’t hurt the customer at all until they fail to meet their contractual agreement. VZW incured a huge cost taking the customer in, plus the discounted equipment, so the ETF is fair. Stop complaining and think about a contract before you sign it. You NEVER HAVE TO….its just another choice in life…

  • Scott

    @NoFan,

    I care because I’m an ex-verizon customer. I switched 4 years ago and have been perfectly happy on att. I’ve thought about the Droid. Not because of the network it’s on, but because of the phone. My point is, if Verizon finds away to BS this $350 ETF, then other carriers will follow. If every carrier had a $350 ETF, then I’ll start buying my phone off contract. But then why isn’t verizon lowering their rate plan for those who do?it’s all about who can get the most greedy before people start to notice.

    Posted from BGR Mobile (iPhone) at: Phoenix North America

  • shotinthenads

    Hey Verizon! Way to turn into those AT&T douche bags.

  • Richard

    I just ported 19 lines to AT&T because of the 1.99 fiasco freaking ridiculous!

  • Micky

    Thats the problem with expensive hardware.. you need a guarantee. I prefer a Straight Talk Monthly plan. Straight Talk runs on Verizon so it has the super coverage. The Unlimited $45 monthly offers unlimited minutes,messages and data. While All you need $30 monthly is 1000 minutes 1000 messages and 30mb data every month.

  • Bob

    You realize you don’t have to pay an ETF if you don’t cancel your 2 year contract early, right? And why would you get cheaper service with no contract? And why does everyone act like Verizon is more expensive than AT&T? Last I checked their plans were exactly the same prices…

    • Stephanie

      Except we (as in AT&T) don’t have a $350 ETF.. We understand the revenue coming in from our Smartphone customers is major profit, so we keep our customers happy and they don’t terminate their contracts early so no need to up our ETF for Smartphone customers.

  • jim

    When i had my EnV…verizon wanted 20.00 a month just so I could have access to e-mail through the e-mail button on the phone….then they began charging me cell minutes to play a downloaded Monopoly game on the phone…even though it wasn’t online…it was just a phone based game…no opponents other than the phone itself…I found out after speaking with a CS rep that the game added up the time played and Verizon then deducted that time from my cell minutes…..I took the ETF and dumped verizon forever…the company is trash.

    • Kevin

      Monopoly game clearly stated that it would use airtime to play, you’re trash for not knowing how to read.

      • george humphrey

        Kevin says: “…Monopoly game clearly stated that it would use airtime to play, you’re trash for not knowing how to read….”

        And you’re an idiot for thinking a Monopoly games actually needs to use airtime or anything outside the cell phone itself to play the monopoly game.

        In the 1970s a person could play Monopoly on a computer with less than 128 kbytes of RAM. (Or adventure, or wumpus or star trek). Todays cell phones have literally thousands, even millions of times as many resources as those old systems. laughably those systems were called “Super-mini computers”. See DEC, Pr1me, Data General, etc..

  • Blackberry Bold

    Then Verizon should only this ridiculous termination fee on people who have smart phones. IF this is the reason, it does not give them the rights to charge people who have regular phones. Up your ass VZ.

    • vzwrep

      it is only for smart phones…tard

    • fdg

      Read the contract it’s for advance devices only

  • Luke

    What the fuck is this bullshit; VZ has got to step it up. Fuck, if i were to terminate early…I would expect to get a check in the mail from them with the x amount of dollars they owe me for all the extra data charges. If people don’t think verizon is banking because of this, they’re ridiculous. I want my money back, sadly I am dedicated to VZ because of the outstanding network, and superb evdo performance. Notwithstanding their shitty contracts, I am forced to keeping their service.

  • coldstew

    you are all morons. first, the higher ETF only applies to advanced devices, so if you don’t have one then quit crying. secondly, this is done to combat what all of you “helpless and financially raped customers” have been doing for years, which is take advantage of their BOGO offers by turning around selling the second device on ebay to turn a quick profit!! outside of that i’m so sick and tired of hearing people complain about VZW’s high costs…ever hear the expression “you get what you pay for?!?!?” Big red charges what they do not only because they have FAR AND AWAY the best network (while LAUGHABLE networks like ATT get away with charging nearly identical costs for their plans without anyone bitching and moaning) but on top of that they also spend more money (roughly 5.5 billion, annually) on advancing and developing their network than any other carrier, and by a long shot…if you don’t like verizons rules, policies or monthly charges, then port into another carrier where u wont get service in your own basement and see how u feel about VZW then, in the interim, quit crying..its a business!!! cologne costs about 6 cents to make, does that mean you are all going to start refusing to pay $60 a bottle? use you brains…tmo and sprint are giving away their network because they HAVE to in order to compete, ATT is still alive because of its merger with cingular and the iphone, thats about it…which company has consistently performed above the rest since the beginning?! oh yeah, “big, bad” VZW. wake up all.

    • Dontdrinkthekoolaid

      With that mind set… since our government(USA) has, in the past, been one of the best countries to live in and provides so many opportunities, it would only be fair for them to take whatever taxes they want from us for providing such a good service….Do they deserve to make more than the other carriers? sure, but there comes a point where they start to take advantage, so dont drink the kool aid they are giving you.

      • coldstew

        no kool aid has been ingested here, i didnt condone nor dismiss any type of behavior that would be considered “taking advantage of consumers”…notice i mentioned nearly identical costs to ATT?! I don’t recall granting permission for VZW to make more than any other carriers either?! you might want to re-read my post cause CLEARLY the entire thing managed to fly over your head like a jumbo jet

  • SUGAR GROVE

    Cold Stew, WELL SAID!!!!
    The I want for something for nothing mentality is why there are sooo many under acheivers today.

  • Common Sense

    So, you sign a contract, you break said contact, you get charged a penalty… where is the confusion? Buy the phone unsubsidized… oh but you don’t want to spend over 500 dollars for a phone that can do so much. Okay, so pretty much no matter waht the cell phone BUSINESS does, they will be criticized. I mean, Verizon offers a BOGO. Not just one or two but hundreds if not thousands of peopl take advantage of the offer and do the BOGO. They than unlock the phone, unlock the phone,and sell on EBay and make a killing. They broke a CONTRACT and made a profit off BREAKING said CONTRACT. I just bought a ’09 Rav4 about 6 or so months ago, that mean I can stop making payments on that, as my dealerships CONTRACT says I will, and than demand they give me a ’10 model for no fee? As earlier stated by Cold Stew, you really think a car costs +30K to make for some models? No. You sign a contract with the gas company, does the gas company give you the heater? You pay for internet, does the internet company give you a computer? You pay for electricity, does the electric company give you CFL’s? You pay for television service, does the television company give you a flat screen? Why is it that the cell phone companies get so much heat for everything they do? I mean, again I feel like I’m the only one who understands that Verizon can do whatever they want when you BREAK the CONTRACT you SIGNED.

    • T

      Kids, or adults with childish mentalities, are raised these days taught that there’s no accountability for what they do. 50% of the people bitching here are doing so because they’re iphone fanboys and it’s a chance for them to achieve some sort of moral victory whilest dealing with their phone that can’t make phone calls. 10% couldn’t define “Contract” if you handed them a dictionary with it turned to the Cs. The remaining 40% are a mixture of both.

      • Common Sense

        Your right T… I also love how the very people you reference down vote because they disagree with te truth. Again- it’s a contract. You sign a contract. You break a contract. You get penalized… some concepts are just too complicated for people to understand.

      • Common Sense

        So your thinking that contracts are just formalities that really should not be followed and be allowed to just be thrown away penalty free? And yeah, elementary cowards… love how you used the maturity of a preschooler with “Ya pair of _used_ douchebags. “…. so which is worse, the “elementary cowardice” of using the contract is a contract defense or showing a preschool education of “Ya pair of _used_ douchebags.”… hm, I’ll take coward who knows logic over someone who wants everything for nothing. Have a good day.

  • AdamL

    I know this might seem simple, or maybe I’m just really weird. But I just don’t break the contract. I just wait until it’s over if I want to change carriers…

  • jim

    In my area Verizon and AT&T are pretty equal…neither works well in my house. I HAD to dump Verizon early and I understand the notion of ETFs because companies can’t be giving high end phones away for free. My major complaint is the way Verizon nickel and dimed me forced me to get rid of them. I was paying to use of my phone when the phone not using Verizon any Verizon towers or any Verizon owned equipment. Pretty shady and absurd. The ETF was unfortunately worth it in order to avoid anymore surprise charges.

    • jim

      I just saw the terrible grammar above..ugh… I had to fix it…..

      In my area Verizon and AT&T are pretty equal…neither works well in my house. I understand the notion of ETFs because companies can’t be giving away high end phones for free. My major complaint was the way Verizon nickel and dimed me. It forced me to get rid of them. I was paying to use my phone even when the phone not using any Verizon towers or any Verizon owned equipment. Pretty shady and absurd. The ETF was unfortunately worth it in order to avoid anymore surprise charges.

      the miserable grammar is what happens with netbooks… I can’t see what I type…..ugh.

  • avinyc

    “Second, prorating the ETF to zero in the last month would mean that, to recoup the same
    amount of the losses caused by early terminations as a whole, Verizon Wireless would have to set
    the starting amount for the ETF higher than $350. Customers as a whole would be worse off if
    Verizon Wireless were to take this approach because early terminations occur disproportionately in
    the early part of the contract term and relatively few customers terminate near the end of the
    contract term.”

    Actually, I think prorating the ETF is quite fair and not at the loss of the customer. The problem is that Verizon is worried that customers will be scared off and knows other carriers will use that point against them in promotions.

    If a customer cancels early on, why should they be treated better than someone that has been paying monthly charges for a longer portion of the contract term? If you cancel before the contract is up, return the phone…simple.

  • Kevin

    It was always my belief that VZW upped the ETF on advanced devices because of all their bogo offers, too many people were starting a second line to get a free BB and then paying 175 to cancel and making off with a 400-500 dollar device.

  • bluayez

    I know that Verizon is in fact taking advantage with the 1.99 charge each month. My son 21 year old son has an ericson PHONE. He makes calls, he text’s… That is it!!! There is a $1.99 charge each month. He never opens the browser. He doesn’t download anything. But for over a year it’s been on the bill. How can I be sure that he doesn’t do something to incur those charges? he lost the phone for 2 months and the charges were still there… no calls, nothing but the $1.99. This isn’t imagined.

  • WilliamC

    That $1.99 charge times 89 million CUSTOMERS equals a lot of money for them or you can call it GENERATING REVENUE FOR VERIZON!!! I’M NOT SAYING THAT THEY CHARGE EVERY CUSTOMER THAT AMOUNT. IT IS up to THE FCC TO INVESTIGATE IN A CROSS SAMPLE OF VERIZON MARKETS. (WE KNOW THAT AGENCY IS A SLEEP AT THE WHEEL)WE WILL KNOW THE TO THE QUESTION SOONER OR LATER.

  • WilliamC

    P.S. WAIT TILL VERIZON GETS THE IPHONE. WHILE IT MAKES THE SUSCRIBER NUMBERS LOOK GREAT IT WILL BE A HEADACHE AND PLACE A BURDEN ON IT’S NETWORK. YOU BETTER BELIEVE SOME EXPENSIVE DATA PACKAGE PRICE IS COMING NEXT. SOMEBODY IS GONNA PAY FOR TAXING THE NETWORK. TOUCHSCREEN PHONES ARE CONVENIENT AND BETTER BECAUSE THE APPS ARE PLACED IN A FIXED PLACE. YOU DON’T HAVE TO SEARCH ALL OVER THE PLACE LIKE YOU HAVE TO WITH A FLIP OR CLAM SHELL. I HAVE THE HERO – IT’S CONCEPT IS BASICLY THE SAME AS THE IPHONE ONLY DIFFERECE YOU HAVE TO DO ONE STEP TO GET TO THE APPS ON THE HERO AND ON THE IPHONE IT IS ON THE HOME SCREEN AS SOON AS YOU TURN IT ON. BIG DAMN DEAL!!! PEOPLE WILL BUY THE PHONE BECAUSE OF ONE LESS THING TO DO. TRUST ME – IT HAPPENS ALL THE TIME. NOT TO GET OFF THE SUBJECT ABOUT THE 1.99 FEE. THIS IS WHAT HAPPENS WHEN YOU LET THIS COMPANY GROW TO MAMMOTH PROPORTIONS. EVERY BODY RUNS TO VERIZON AND AT&T – NOW YOU GUYS UNDERSTAND THE TRICKS BIG RED CAN PULL AND ALL THE OTHER SHENANIGANS THEY HAVE UP THEIR SLEEVES…..THE END RESULT:WE THE CONSUMER PAY FOR THE “QUEST” FOR THE “LATEST AND GREATEST” PHONE!!!

  • Luke

    do you guys realized this is a business and not a charity. yes they do profit every month but that’s because that is their goal. they aren’t giving cell phone service out for free each month and when they activate and maintain a smartphone on the service it cost alot more money and if they cancel early verizon needs recop their costs.

  • Crappygeorge

    “Waaaa Waaaaa Waaaaa, I got a 1.99 charge on my bill… my grown ass son is still on my bill but swears he never opens the browser!”

    Hey numb-nuts, if its showing up as a data charge when the phone isnt being used its obivously not from acessing the web. Its either from Backup Assistant or some other game or app that he downloaded that included a monthly subscription.

    It boggles my mind how uninformed people are about their phones and services. I would venture a guess and say that 85-95% of all Verizon’s data charges were billed correctly. Its almost ALWAYS the customers dumb ass. And dont get me started on the ETF… the only people upset are the ones that take advantage of the system. Trust me- It aint the average customer who is up in arms over this ETF increase, in fact they could care less… Their service works great and they re-sign for a hot new phone every 13-20 months depending on their price plan.

    In the end, if your the kind of turd that always wants the newest, latest and greatest cellular device, DONT SIGN A CONTRACT. Drop your biweekly paycheck on that sick new smartphone… In 3 months, your newest desire will come around and you can hawk your now paperweight to someone else on eBay. Like I said before, the average customer doesnt give a crap about the new ETF.

    • PillowCaseLaw

      So you didn’t read the bit about how the $1.99 charge was showing up when the phone was LOST and NOT IN USE, huh?

  • Jose

    In my opinion ETF’s are justified, but should be prorated, so you shouldn’t have to pay as much when you’re closer to the end of the contract. I don’t think it’s fair for a company to charge a $350 ETF for a smartphone to cancel service 1 month before the contract has ended. That being said I also think it’s pretty stupid for a person to cancel their contract with only one month left to go.

  • bond

    WOW!!! ok guys just think the data charges i can tell you what thats over you got people out her that get these touch screen phones for there kids and say there not gonna use internet and they dwnload ringtones and look at ringtones hello thats internet and thats the truth sorry to hurt your feelings

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