Democrats are going to micromanage cell phone contracts

Do people really think that there is no competition between the cell phone companies? Even if they believe that to be the case, limiting the amount that cell phone companies can charge for early termination will increase the amount that they charge when people get the telephone to begin with. The long term contracts and termination fees are to compensate the cell phone companies for their subsidies when people purchase the telephone. While higher prices could either be charged up front or to those who break their contracts early, apparently when Americans are given a choice they prefer the later. The WSJ reports:

“Forcing consumers to pay outrageous fees bearing little to no relation to the cost of their handset devices is anti-consumer and anti-competitive,” Sen. Amy Klobuchar (D., Minn.), one of the bill’s sponsors, said in a statement.

“It’s allowing consumers more information and also making sure that the industry isn’t sticking it to consumers,” a spokeswoman for the senator added.

Early-termination fees have attracted criticism from some lawmakers, regulators and consumer groups, who say they’re too high and too complicated. Most of the major wireless carriers, including Verizon Wireless, AT&T and Sprint, have faced disputes related to their fees. . . .



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