No Fee For Thee

Looks like the FCC is set to hold a hearing regarding he potential for regulating early termination fees on wireless phones. Now, regulating cancellation fees certainly seems like a consumer-friendly move. After all, no one wants to be stuck paying a couple hundred dollars when they decide to cancel their phone service or switch carriers.  Not too long ago, I had to get out of a wireless contract; I ended up just riding out the contract period — and basically not using the phone in the interim — rather than pay the early termination fee. But just because the fees are sometimes irritating doesn’t mean they should be illegal (or regulated at all).

Let’s face it: Lots of service and product fees are irritating. I pay my cable company a few dollars a month to rent the HD signal box I use. Car insurance can be extremely expensive (especially in a dense, dangerous metro area).  Dry cleaners charge too much to remove coffee stains.  Heck, I’ve known people who grumble over delivery charges on pizza.  But aggravation isn’t — or at least shouldn’t be — a call for regulation. So it disappoints me to hear that FCC Commissioner Kevin Martin is starting this investigation in response to complaints about the fees.  No doubt there’s plenty to grumble about in this world, but the best response to consumer dissatisfaction is rarely bureaucratic intervention.

And indeed, in this case, it’s likely that FCC regulation would simply make regular wireless phone plans more expensive for everyone.  Wireless carriers use these fees to provide revenue certainty.  They allow most people to have lower fees in exchange for hire rates for those who need the flexibility to cancel their plan unexpectedly.  Wireless companies wouldn’t simply give up that revenue, so it’s likely that getting rid of the fees would merely  shift the cost away from the individuals who need it most and shift it onto everyone.

Update: Over at TechLiberation, Ryan Radia has more.