AT&T Raises Early Termination Fee, Offers Explanation

On Friday, AT&T announced that they are raising the Early Termination Fees starting June 1. The timing of the change is suspiciously close to the assumed release of the iPhone 4G, leading many speculators to believe it has something to do with AT&T’s exclusivity with Apple drawing to a close. Only AT&T may know that answer, but they published an open letter explaining that they raised the ETF for smartphones in order to lower it on basic phones. The higher fee also provides better cost covering for AT&T, since you could buy an iPhone for $199 with a 2-year contract, then cancel, paying only an additional $175 for a total price tag of $374 on a $500 phone (or $600 for the 3GS).

It is tough to not be suspicious of companies like AT&T. But as Occam’s razor states, the simplest solution is usually the correct one.

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