Verizon responds to FCC inquiry over ETFs

Verizon has responded to the FCC’s inquiry regarding their decision to double their ETF to a whopping $350 and their explanation has many shaking their heads in disbelief. Turns out that Verizon considers that fee to be covering just about every facet of their operation!

“The ETF is not limited to the recovery of the wholesale cost of the device over the life of the contract,” Verizon told the FCC. “The ETF partially compensates Verizon Wireless for all the costs and risks of providing service, which include advertising, commission, store costs, and network costs.”

Yep, that’s right. Verizon uses ETF fees to pay for its advertising, its stores, the cost of providing support, and more. But wait a minute-if the ETFs pay for all that, what do with all the money their customers pay each month for their plans and services? Isn’t it that cash flow that is supposed to cover the cost of doing business while the ETFs cover the subsidizing of the phones? Not according to Verizon.

The FCC has not responded yet but it will be interesting to see how they feel about Verizon’s reasoning for charging such an outrageous ETF.

Read [PCWorld]