• Home
• About Amy
• Serving Minnesotans
• About Minnesota
• Issues/ Legislation
• Media Center
• Contact Amy
• FAQ

News Releases

Klobuchar: AT&T; Early Termination Fee Hike Excessive

AT&T; announces plans to nearly double penalties on popular smart phones

May 21, 2010

Washington, D.C. – U.S. Senator Amy Klobuchar responded to AT&T’s decision to nearly double Early Termination Fees (ETFs) on popular smart phones by calling it an excessive strike against competition and consumers.

In a letter to consumers, AT&T announced that the company will increase the ETF penalty to $325 on all smart phones and netbooks, such as the Apple iPhone and Blackberry Bold.  AT&T also revealed that it will lower the ETF on basic phones from $175 to $150 and increase the ETF proration amount for smart phones from $5 to $10 each month.

“AT&T is forcing its customers to pay a price to get their freedom, and that’s not right,” said Klobuchar. “Too often consumers find out after committing to a multi-year contract that their wireless service doesn’t meet their needs, and changing your wireless provider shouldn’t break the bank. Once again wireless providers have shown that they would rather use arbitrary fees than network and service quality to keep customers.  It is time for Congress and the Federal Communications Commission to act to ensure competition and consumer protection in the cell phone marketplace.”

Since the Apple iPhone was introduced in June 2007, AT&T has been exclusive carrier for the device within the U.S.  The AT&T announcement comes on the heels of a Federal Communications Commission study that found increased concentration and less competition in the wireless industry.  As part of its mission to protect and inform consumers, the FCC Consumer Task Force is investigating the impact of Early Termination Fees.

Last December, Klobuchar introduced the Cell Phone Early Termination Fee, Transparency and Fairness Act (Cell Phone ETF Act) in response to Verizon Wireless’ decision to double their ETFs from $175 to $350 for certain new smart phone customers.  The bill, cosponsored by Senator Russ Feingold (D-WI), Jim Webb (D-VA) and Mark Begich (D-AK), would require wireless providers to pro-rate ETFs and clearly notify customers about the fee, not only at the time of purchase, but for the duration of their contracts. 

Klobuchar is a member of the Senate Commerce Subcommittee on Communications, Technology, and the Internet.

####