Verizon's big rip-off shows it's as bad as AT&T

Just when we thought Verizon might be a good iPhone alternative to AT&T, it turns out it's just another bunch of bozos

I should have known better. I was starting to think that if Apple drops its exclusive iPhone deal with AT&T, I'd switch to Verizon in a New York minute.

But Verizon's decision to double (that's right, double) early termination fees for smartphones to $350 has me seriously ticked off. I was already disgusted with Verizon CEO Ivan Seidenberg, who has been running around the country slamming Net neutrality, but now that I've read his company's astonishingly arrogant reply to an FCC query, he's the hands-down winner of the Bozo of the Month award. (High-five to David Pogue of the New York Times who brought this and another Verizon-related matter to the attention of the FCC.)

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Paying to quit
Anyone who owns a cell phone is probably aware of the dreaded early termination fee, or ETF, as the carriers like to call it. Ask why a customer has to pay to quit, the telcos will say that the charge is a way to make up for the subsidized cost of a phone.

In a sense, that's fair. If it costs a carrier $500 to buy a phone it sells for $200, the carrier doesn't want a customer bailing out before it has recouped its subsidy via monthly charges. But it's only fair in theory.

To begin with, a cell phone without its designated carrier is useless. Sure, some customers are savvy enough to unlock, or jailbreak, a phone, but that's a tiny percentage of the user base. So how big a problem is that?

What's more, Verizon tacks on an extra charge every month to make up the potential loss. The ETF drops $10 every month a customer stays with the service, but at the end of the two-year contract, it's still $120. Why not zero?

And here's the really big disconnect: If the monthly charge contains an extra fee to repay the subsidy to Verizon -- which it apparently does -- why doesn't the monthly service charge drop after it makes up the difference? In response to a query by the FCC apparently prompted by Pogue's column, Verizon replied that customers have the option to avoid the ETF by paying the full price for the phone.

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