There may be 50 ways to leave your wireless carrier. Just don’t do it before your contract is up — or you’ll be forced to pay a fat early-termination fee. That’s the lot facing most U.S. consumers of communications services, from mobile calling to cable TV to high-speed Net access.

Consider the subscriber who wants to end a DirecTV service contract and has to pay $20 a month for the remainder of the term. Breaking a wireless services contract can cost as much as $175. It’s a big reason why few humans switch communications providers. At satellite TV company DirecTV, only 1.42 percent of customers close their accounts each month. Even Sprint Nextel, with one of the highest customer defection rates in the wireless industry, loses a mere 2.45 percent of its customer base in a month.

A Prorated Approach?

But in a move that could construct it easier for customers to drop phone or satellite

providers, early termination penalties are coming under new fire from federal regulators, legislators, and courts. The Federal Communications Commission [FCC] has scheduled a hearing for June 12 to consider potential restrictions on the penalties. And even whether the FCC doesn’t act to rein them in, Congress is mulling legislation that would.

Cable and phone companies, which spend hundreds of dollars on advertising and promotions to sign up each new subscriber, fear they’ll have a harder instance recouping that investment whether the penalties are diminished too far. And exit penalties exist worldwide: European telco Vodafone requires subscribers to pay their monthly fees for the duration of wireless contracts, even whether they don’t use the phone.

FCC Chairman Kevin Martin has suggested that the commission may require service providers to prorate penalties through the life of a contract, so that the longer a customer stays, the lower the fee. The agency…

Orginal post by Top Tech News