Sprint Nextel Corp. announced today that a California jury ruled in its favor in a trial involving the contentious issue of early termination fees (ETFs) in wireless service contracts. (Roger Cheng, Jury Sides With Sprint on Early Exit Charges (June 12, 2008) www.smartmoney.com.) A number of similar class actions have been in various stages of progress, but the Sprint class action was the first to return a verdict.
Meanwhile, The Federal Communications Commission (FCC) held a lengthy hearing today on whether wireless carriers' ETFs are justified and if jurisdiction over those fees should switch from the states to the federal government. (Chloe Albensius, FCC Debates Need for Cell-Phone Termination Fees (June 12, 2008) www.pcmag.com.) Since this issue gained traction in 2006, with the filing of class action suits, all major carriers have adjusted their practices to allow for pro-rated ETFs. Until the FCC determines whether these ETFs constitute federally regulated "rates," consumers and carriers will remain uncertain as to whether states have any jursidiction over carriers' ETFs. At least in the Sprint case, it is undoubtedly pleased that California currently has jursidiction over this issue.