Cell phone fees OK for consumers, not government

By JOHN DUNBAR,
Associated Press Writer

A leading cellular phone company declined to charge the government the same expensive fees it charges consumers for canceling their contracts early, acknowledging that "the government will never, never accept such penalty amounts," according to internal corporate e-mails obtained by The Associated Press.

The exasperating fees are the subject of a hearing Thursday at the Federal Communications Commission. The e-mails from Nextel Communications Inc. come at a time when the FCC is considering whether to offer consumers relief from cell phone fees that the government itself appears to have avoided.

The Associated Press last month revealed details of the industry's efforts to help consumers avoid such fees in exchange for letting 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.

In documents unearthed as part of one such lawsuit, employees at Nextel now part of Sprint Nextel Corp. debated whether to assess a $200 termination fee to federal government subscribers under a contract with the General Services Administration.

"The government will never, never accept such penalty amounts and for the most part i think a lot of the (complaining) is real," then-Nextel marketing vice president Scott Wiener wrote in an e-mail in January 2004. Wiener declined to comment Wednesday about his e-mail exchange.

Nextel ultimately decided against charging the fees to the government, because, according to Sprint Nextel spokesman John Taylor, it would have been against federal procurement laws.

The e-mails obtained by the AP were marked "confidential."

The jury in Alameda County, Calif., has the case and will be deliberating this week.

Taylor said the company is upfront with its customers about the fee and offers a variety of pricing plans.

At Thursday's FCC hearing, wireless companies were expected to argue that the FCC should assert jurisdiction over the fees, which would be preferable for industry to the patchwork of regulations companies face in 50 states.

FCC Chairman Kevin Martin has said he supports the creation of a national regulatory framework.

The hearing includes representatives from the wireless, cable television and satellite television industries as well as consumers and state officials.

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On the Net:

Federal Communications Commission: Federal Communications Commission (FCC) Home Page

Cell phone fees OK for consumers, not government - Yahoo! News

Copyright 2008 The Associated Press.