Senate Introduces Bill To Rein In Early Termination Fees

Yesterday, four senators introduced legislation to make cell phone early termination fees be actually related to the cost of the phone.

The “Cell Phone Early Termination Fee, Transparency, and Fairness Act” or “Cell Phone ETF Act” (we’re not sure where the other TF went) would direct the FCC to require service providers to

  • Prorate a customer’s ETF over the term of the service contract
  • Link the amount of the ETF to the cost the provider paid for the phone, minus whatever price the customer has already paid at the beginning oft he contract
  • Clearly disclose the ETF at the beginning of the contract and the prorated amount on each bill

The FCC would also be instructed to study the effects of ETFs on competition and whether they adversely affect consumers’ ability to freely choose service providers (Hint: yes).

The bill number is S. 2825.