Verizon to Federal Communications Commission: Our ETF step-up helps us pay for advertising
Verizon has been acquiring a lot of press recently for the selling warfare it’s waging against AT&ere;T (NYSE: T), and it’s been distracting a draw of citizenry from the real number trouble with Verizon (New York Stock Exchange: VZ) Wireless – their excessive $350 Early Termination Fee (ETF). The wireless aircraft carrier recently upped their ETF for “advanced devices” – which has largely been interpreted to mean value “smartphones” like the Motorola (NYSE: MOT) DROID – which piqued the Federal Communications Commission’s interest. Today, Verizon has responded to the FCC’s enquiry into the aircraft carrier’s ETF practices, essentially defending their motivation for outlandish ETFs as a agency to recoup French telephone costs, marketing expenses and even the costs associated with network base.
You can discovery the stallion 77-varlet response here, but the short-and-sweet version of the response goes like this:
Verizon needs to mission a $350 ETF to help offset the higher costs of “advanced devices” The higher ETF helps hedgerow against customers that natural their contract bridge early after paying a discounted monetary value for the phone The ETF helps salary for marketing costs The ETF helps pay for network infrastructure costs The ETF helps pay for computer storage costs and commissions Verizon decreases the ETF for every month of a customer’s contract (which still leaves $120 after the 23rd month)
Basically, what Verizon is expression is that it is using the ETF to aid salary for parts of its business that customers shouldn’t be responsible for. Shouldn’t it be Verizon’s own responsibility to marketplace their network, build out their network, and maintain its nationwide retail chain?
There was a meter in the US radio industry when an ETF was used only to help a aircraft carrier recoup the costs associated with subsidizing handsets for customers, should they decide to remainder their contract early. If Verizon is allowed to get away with their new ETF, it could set a precedent for carriers being allowed to charge higher ETFs as a means to bump up gross.
Verizon’s response on ETF to the Federal Communications Commission
Tags: fcc, nyse euronext
February 1st, 2012 at 6:00 pm
[...] or market position–or anything else beyond existing legal requirements. It also limits the FCC’s ability to attach unrelated conditions to new licenses that would constrain how and by whom [...]