FCC to examine early-termination fees

WASHINGTON, May 31 (UPI) -- Cellular phone firms are seeking protection from consumers angry over early-termination fees in exchange for scaling back the charges.

Negotiations between the carriers and the Federal Communications Commission have been ongoing in the run-up to a June 12 FCC hearing on the early-termination fee issue, the Washington Post reported Saturday. Records show FCC Chairman Kevin Martin met earlier this month with Verizon Wireless CEO Lowell McAdam and Tom Tauke, the company's chief lobbyist.

The newspaper said Verizon and other wireless providers such as AT&T and T-Mobile are willing to reduce the early-termination fees in exchange for legal protection from state lawsuits challenging their legality. The fees, which can range up to $200, make it difficult for users to switch companies and reduces competition in the cell phone industry, consumer advocates say.

Many industry watchers are keeping an eye on a California class-action suit court against Verizon, the Post reported, in which up to $1 billion in damages could be at stake. Sprint Nextel also faces legal troubles over early-termination fees in the state.

Martin told the newspaper the hearing could broaden to look at such fees also levied by cable television and Internet service providers.