Verizon Abuses Customers With Higher New Phone Fee: Today's Outrage

Verizon's plan to double early termination fees is just plain stupid.
Publish date:



) --


(VZ) - Get Report

is out of touch with reality. What absolute gall to

double early termination fees

to $350, according to a report on




Verizon is totally out of sync with the market, with so many new and exciting mobile phone products coming out all the time.

Doubling the termination fee is not in keeping with the new regulatory push to stop companies from gouging consumers with unnecessary fees.

We're basically talking about a new twist on the old bait and switch routine, let's call it bait and lock. Verizon captures new customers by offering them subsidized deals on cool new phones and then wants to recoup the cost by locking them in with long-term contracts.

I understand the business logic behind that strategy, and I appreciate the opportunity to get a better deal on a phone. But two years is an eternity in the fast-moving mobile technology environment we live in.

Verizon and many of its rivals made the decision to compete on phone technology by starting down the path of subsidized phones and exclusive deals with mobile technology companies.


(T) - Get Report

made its bet on


(AAPL) - Get Report

's iPhone (or maybe it was the other way around), Verizon is going big on


(GOOG) - Get Report

's Android and


(S) - Get Report

hooked up with




So if they want to compete on phones, then they should be making it easier and cheaper for customers to upgrade to the latest, greatest version.

Instead, Verizon is making it harder by raising early termination fees. Sure, you can always pay full price for a new gadget, but the carriers have taught us that we shouldn't have to.

The termination fee punishes the early adopters instead of embracing them.

I hope Verizon's rivals don't follow the standard "me-too" approach and raise their termination fees. There are better ways to generate customer loyalty than through contractual obligations and hidden costs.

Why not drop the termination fee altogether and offer an upgrade as often as you like policy with less of a discount for each successive upgrade within a given period. Early adopters tend to be willing to pay a little more to be first with a new toy and other customers may just wait out the two-year period.

--Written by Glenn Hall in New York.

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Glenn Hall is the New York-based Editor in Chief of

. Previously, he served as deputy editor and chief innovation officer at

The Orange County Register

and as a news manager at

Bloomberg News

in Frankfurt, Amsterdam and Washington, D.C. As a reporter, he covered business and financial markets, worked in both print and television in the U.S. and Europe, and conducted in-depth investigative coverage at

The Journal-Gazette

in Fort Wayne, Ind. His work also has been published in a variety of newspapers including

The Wall Street Journal


The New York Times


International Herald Tribune

. Hall received a bachelor's degree in journalism and political science from The Ohio State University and a certificate in project and program management from Boston University.