Verizon Wirless Thursday agreed to pay $21 million to settle a lawsuit filed by California customers upset with the company's early termination fees, the Associated Press reported.

Details are still pending, but Alan Plutzik, Alameda County (California) Superior Court judge said "we are recovering cash" that would "be available" to Verizon mobile phone subscribers who paid fees to end their contracts early, AP reported.

Shares of Verizon Wireless' parent Verizon (NYSE: VZ) were virtually unchanged on the news, dipping just 8 cents $34.58 in mid-day Thursday trading.

Warranted reimbursement or California dreamin'?

Stock analyst C. Leonard Bauer told BloggingStocks Thursday that, while he abhors cell phone / PDA termination fees as many others do, thinking that mobile phone / phone service providers can eliminate the $100-$250 fee without increasing charges elsewhere does not represent clear thinking.
"Mobile service providers can not do away with termination fees without increasing the price of phones or other mobile service prices. There is the matter of hardware, which is a sizable expense for the providers," Bauer said. "What mobile service companies will do is seek to recover the fee in other ways, including monthly charges for peak minutes."

Alternatively, Bauer said some mobile service providers may seek to pro-rate fees in exchange for a larger sign up / activation fee. Bauer added that he does not have a rating on nor own shares in Verizon.

Sprint Nextel Corp. (NYSE: S) was the first company to face trial in Alameda County Superior Court last month, The AP reported Thursday. Judge Bonnie Sabraw has not yet issued her decision in that case on the legality of the fees in California.