Kevin Martin, the chairman of the FCC, has made it his business to try to cut the costs that customers are charged when they cancel their service before the end of a contract. According to The New York Times, "Mr. Martin's plan would require that fees be related to the actual cost of the phones. A fee for a $50 phone would be higher than for a $5 phone." It would also take into account how many months a customer had left on a contract.
The cellular companies, including Sprint (NYSE: S), spend a lot of money on their poor customer service. They ought to have a chance to get some of that back when a customer walks. It probably also costs the firms money to reconnect all of those dropped calls.
The cellular companies do have initial costs to set-up service and billing when a new customer comes on board. The Martin plan does not appear to take that into account.
Just because the service is no good does not mean that the cellular provider is not out a lot of money to provide it.
Douglas A. McIntyre is an editor at 247wallst.com




