California judge declares Sprint's early termination fees illegal

A California judge has passed a preliminary ruling on Sprint Nextel's early termination fees: I don't speak Legalese, but I believe an onomatopoeic kablammo is accepted in most languages. The judge presupposed that the ETFs were unfairly enforcing contracts. Of course, the FCC has complained about the ruling, suggesting instead that it should be a federal issue:
"A consistent, uniform, national framework of standards is the best-case scenario for consumers and for the industry to serve consumers," he said. "If you allow 50 states to regulate and legislate in 50 different ways, you can create a very confusing and obviously inefficient service." At a public hearing last month, FCC Chairman Kevin Martin sketched out a plan in which cancellation fees would be reduced over the life of the cell phone contract. Three companies - T-Mobile, AT&T and Verizon Wireless - already do that, and Sprint said it would begin prorating its fees next year. The commission also is trying to resolve whether states have any role in regulating early termination fees, which are among the biggest source of complaints among wireless consumers, said spokesman Robert Kenny.
Early termination fees are often explained away as the penalty for getting a subsidized handset from your wireless carrier. Most carriers had planned on implementing prorated ETFs that would get smaller as you approached the end of your contract. Sprint early termination fees are illegal, judge rules [Mercury News] PreviouslyT-Mobile introduces declining early termination fees
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4 Responses to California judge declares Sprint's early termination fees illegal

  1. technogeek says:

    Personal reaction: If it can be shown that folks knew the early termination fee clause was there when they signed, and they signed anyway, they’ve got no grounds for complaint. If you don’t like a clause in a contract, you shouldn’t commit to it; shop around for something you can live with.

    “Quality, Service, and Price! (Pick any two.)”

    My solution was to go with a pay-as-you-go plan. It does mean that if I want a nontrivial phone I’ll need to buy it myself (perhaps used) — but for $30 I got a basic bluetooth-capable phone, and for my usage pattern $100 worth of minutes covers a full year.

  2. Paul Coleman says:

    I’m always amazed at how quickly the modern republican party has abandoned the concept of states rights. I suppose it’s no surprise given that they’ve held the reins of power. I wonder if they’ll rediscover their dislike of federalism come November….

    Re: Martin’s argument…No it wouldn’t be chaos if 50 states regulated differently. Sprint would either find a way to comply with them all simultanenously or it would screw the people in some states and not others. Every state has different banking regulations and the mega banks deal with it. Forgive me if I don’t feel sorry for a large corporation that “has to figure out the rules”. Wah.

  3. teqjack says:

    “If you allow 50 states to regulate and legislate in 50 different ways, you can create a very confusing and obviously inefficient service.”

    Mebbe so, but if the alternative is Stalinesque central planning…

    Ken STL –
    look up – $10 (plus $4 taxes/fees, of course) plus per-minute (about standard pricing) with a one-month no-termination-fee contract. I think there are others, but I’ve been with them (and got a no-frills phone free) for several years.

    Yeah, if you want the latest iPhone or whatever you are probably out of luck (try to find an unlocked one) but otherwise OK.

  4. Ken STL says:

    I’ve been imprisoned in a Sprint contract for years. We just get plain vanilla “free” handsets (no camera or other goodies), but still get a $200 termination fee on a two-year contract. Is my cheapo Sanyo handset really worth that much?

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