AT&T to Raise Exit Fees for Smartphones

In a move following Verizon Wireless and T-Mobile, AT&T is raising the early termination fee (ETF) for smartphone users. This move comes ahead of the planned launch of the new Apple iPhone 4G.

New contracts that subsidize smartphones and netbooks will have buyers paying $ 325, doubling the current $ 175 fee for breaking a contract. One consolation, the fee will decrease by $ 10 per month during the two year contract.

The carrier will also be dropping the fee for regular phones to $ 150, with a monthly decrease of $ 4. These rate changes will go into effect for all new contracts made on or after June 1st.

Earlier this year T-Mobile and Verizon also doubled their ETF’s, but then later rolled back the increase in response to a government regulatory probe.

The FCC has been looking into ETF’s as a way of reducing competition, making it difficult for customers to switch wireless carriers. Carriers claim the fees are necessary to help recapture the initial subsidy cost of the phones. Verizon also made a business case for including charges in addition to the carriers actual equipment costs.

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