Verizon Quietly Cuts the Number of Phones Subject to $350 Termination Fee
Verizon has apparently reduced the number of phones subject to the $350 early termination fee for advanced devices. This termination fee, double the standard $175, was added for new contracts and renewals associated with these devices as of November 15, 2009. The current list appears to be limited to smartphones (including BlackBerry and Android devices) and netbooks. A review of a prior version of the schedule showed that as of last Friday this list contained a number of multimedia devices such as the LG enV Touch and Samsung Rogue.
MyRatePlan Analysis: If there is justification for a higher early termination fee, this new shorter list of devices makes more sense. Verizon has been taking some political heat for the higher termination fees. In their response to an FCC inquiry last month, Verizon talked at length about the large amount of subsidy below cost for these devices (vs. other phones), saying that this amount alone justified the higher early termination fee. Some of the devices removed likely cost Verizon quite a bit less than true smartphones. In addition, Verizon has introduced new pricing this week requiring a data plan of at least $9.99/month on several of the removed devices. It is possible that the incremental revenue associated with this new pricing structure also led to the pullback in what is considered an 'advanced device'.
On a related note, check out our new termination fee calculator.