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State Regulators Consider Safeguards Against 'Early Termination Fee' Abuse


The National Association of Regulatory Utility Commissioners said it stands with the FCC in revising "an oversight regime" of the wireless carriers.



State utility regulators are moving to establish a working group to develop national standards that would protect U.S. consumers against wireless carriers who levy harsh and sometimes confusing early termination fees, or ETF.

The latest effort is outlined in a letter to the Federal Communications Commission sent Monday by the National Association of Regulatory Utility Commissioners (NARUC) and signed by chairman Ray Baum of Oregon and Consumer Affairs Committee chairman Anne Boyle of Nebraska.

"This proposal allows states to instigate changes to national rules based on emerging abuses," the letter states. "It builds on the competencies of federal and state agencies, assures state input to regularly revise an oversight regime, does not limit the use of existing state procedures/remedies, and leverages the limited federal and state resources available."

The whole issue of early termination fee abuse has taken on new importance in recent months as consumers and some regulatory agencies have complained about ETF abuse by some cell phone companies. At the same time, wireless providers have moved to improve their ETF policies to make them more agreeable to consumers.

In a meeting last month, NARUC's members proposed the creation of a combination state-federal task force to "develop national wireless consumer standards." NARUC proposed that states will retain their authority to enforce standards, resolve consumer complaints, conduct some investigations, and enforce compliance and impose penalties in some circumstances.

According to the letter, the task force would consist of five state regulators, three FCC commissioners, a representative of the State Attorneys General, a consumer advocate, and an industry official.

"The group," NARUC said, "would meet publicly every six months to adopt, review, and propose wireless standards for FCC approval."

While the working group would examine a broad range of abuse by wireless providers, the state group singled out early termination fees for prominent mention in the letter. NARUC said it opposes any determination that ETF rules be categorized as "rates," because it fears such a ruling could open the way for states to lose their jurisdiction over the issue. "There is no logical reason to take state cops off the beat...," NARUC said.

NARUC added that it generally agrees with FCC chairman Kevin Martin's opinion that ETFs are not rates as defined by the FCC and, thus, still come under the jurisdiction of states. The state organization said: "NARUC agrees with chairman Martin's statements to a Senate Committee last December: ETFs are not rates."


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