Have you guys heard? Verizon needs to charge a $US350 ETF on smartphones to survive! Otherwise they won’t be able to pay for their network! Wait… that doesn’t make any sense.
Yes, Verizon has responded to the FCC’s inquiry with just what you’d expect: some pretty vague excuses. You see, they need to charge such a crazy ETF.
“The higher (early termination fee) associated with Advanced Devices reflects the higher costs associated with offering those devices to consumers at attractive prices, the costs and risks of investing in the broadband network to support these devices, and other costs and risks.”
Costs and risks, costs and risks! What they don’t address is why they’re justified in charging a fee that ends up being far higher than the difference between the actual cost of a phone and the subsidised price, especially if the contract is cancelled many months in. Isn’t that all the ETF is supposed to cover? I mean, if you’re relying on contract cancellation fees to pay for your network, well, I don’t think you need to have an MBA to figure out why that ain’t good business. [WSJ via Silicon Alley Insider]