Verizon Wireless Prorates Fairness In Prorated ETFs
from the gee-thanks dept
Verizon Wireless got a bit of praise a few months back when it announced it would start prorating the early-termination fees it charges customers who break their contracts before they expire. Operators use ETFs to ensure they recoup the subsidies they pay to make handsets cheap for users to buy, but the ETF doesn’t drop as subscribers get closer to the end of the contract, which seems a bit unfair. Now, Eric writes in to point out that Verizon’s finally released the details of the ETF changes, and as you might expect, they’re not quite as fantastic as people would have hoped. The changes came into force Nov. 16 — and will only apply to contracts signed on or after that date. Furthermore, the ETF only drops by $5 per month rather than proportionally to the length of the contract. While it’s a step in the right direction, it seems a lot less benevolent than originally thought, and keeps the deck stacked strongly in the operators’ favor. Perhaps a better solution would be to charge an ETF in line with the subsidy on each handset, then prorate that proportionally over the life of the contract.