SAN FRANCISCO
Verizon Wireless has agreed to pay $21 million to settle a lawsuit filed by
California customers upset with the company's early termination fees, a lawyer
on the case said Wednesday.
Many details of the settlement still need to be worked out and authorized by
an Alameda County Superior Court judge, said Alan Plutzik, an attorney for the
customers.
"We are recovering cash" that would "be available" to Verizon mobile phone
customers who paid fees to end their contracts early, Plutzik said.
Plutzik said its unclear how many Verizon customers will be eligible to share
in the settlement, a decision that will ultimately be up to the judge. A
spokesman for Verizon Communications Inc. could not be reached for comment late
Wednesday.
Telecommunications companies charge early termination fees that can range
from $150 to $225 when customers cancel their service contracts before they
expire.
Wireless companies have said they must charge the fees to recover the cost of
cell phones, which they subsidize when they sign up customers for new long-term
service contracts.
Customers of six companies sued the carriers in 2006 in Alameda County
Superior Court alleging that the fees violate California law.
Sprint Nextel Corp. faced trial first in Alameda County Superior Court last
month. Judge Bonnie Sabraw has not yet issued her decision on the legality of
the fees in California in that case.
Jury selection began last month in Verizon's trial, which will be halted now
that an agreement has been reached. AT&T Inc. is next up for trial, Plutznik
said.
Federal Communications Commission chairman Kevin Martin last month laid out a
plan to regulate the fees, saying he was skeptical that the lawsuits would
adequately resolve all pending issues about the unpopular fees. The industry
supports Martin's proposal to prorate the fees in exchange for immunity from
state lawsuits.
Copyright 2008 Associated Press