FCC wants cell-phone fee rules

WASHINGTON - The head of the Federal Communications Commission said yesterday that he wants to regulate fees charged to cell-phone users who cancel their wireless contracts early.

At a news conference, FCC chief Kevin Martin would not say whether he endorses an industry plan to help consumers avoid "early termination fees" as detailed by the Associated Press this week.

But Martin said he supports regulating the fees at a federal level, even if it affects a series of pending class-action lawsuits against carriers in state courts.

A national standard that addresses the current fee system would benefit consumers more than a lawsuit that would affect consumers in one state, Martin said.

Martin said industry and consumer groups were negotiating to reach an agreement to ease the fees, which have infuriated consumers. But so far, they have been unable to reach consensus.

Citizens will be able to speak their minds on the subject during a public hearing at the commission's next meeting, scheduled for June 12.

Verizon Wireless, the nation's No. 2 cell-phone company, has offered a plan that would give consumers a break on fees charged when they quit their service early. But it also would let cell-phone companies off the hook in state courts where they are being sued for hundreds of millions of dollars by angry customers.

Cell-phone companies routinely charge customers $175 or more for quitting their service early. Under the new proposal, consumers would have the opportunity to cancel service without any penalty for up to 30 days after they sign a cell phone contract or until 10 days after they receive their first bill.

The proposal would require companies to reduce fees month by month over the course of a contract based on how long customers have left, according to people familiar with the offer who spoke on condition of anonymity because the FCC has not approved it.

It would not abolish cancellation fees entirely and would not refund such fees to anyone who already paid them.

The sticking point for consumer groups is that the proposal would take away states' authority to regulate the charges. Consumers Union called the provision a "get-out-of-court-free card."

AARP, another organization mentioned by Martin as key to a successful agreement, appeared to oppose the plan Thursday, noting that the industry offer "does not change AARP's position or activities," according to a statement by David Certner, the organization's legislative policy director.