I 

111TH CONGRESS 

2D SESSION H. R. 5583 

To require cell phone early termination fees to be pro-rated over the term 

of a subscriber’s contract, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JUNE 23, 2010 

Ms. SHEA-PORTER introduced the following bill; which was referred to the 

Committee on Energy and Commerce 

A BILL 

To require cell phone early termination fees to be pro-rated 

over the term of a subscriber’s contract, and for other 

purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Cell Phone Early Ter5 mination Fee, Transparency, and Fairness Act’’ or the 

6 ‘‘Cell Phone ETF Act’’. 

7 SEC. 2. PRO-RATED EARLY TERMINATION FEES FOR CELL 

8 PHONES. 

9 (a) IN GENERAL.—Not later than 180 days after the 

10 date of enactment of this Act, the Federal CommunicaVerDate Mar 15 2010 04:04 Jun 24, 2010 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5583.IH H5583

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1 tions Commission shall promulgate regulations requiring, 

2 at a minimum, that providers of commercial mobile service 

3 (as defined in section 332(d)(1) of the Communications 

4 Act of 1934 (47 U.S.C. 332(d)(1))— 

5 (1) prorate any early termination fee over the 

6 term of a subscriber’s contract; and 

7 (2) link the fee to the cost to the provider of 

8 the handset device provided to the subscriber, re9 duced by the price paid by the subscriber for the 

10 handset device at the start of a subscriber’s con11 tract. 

12 (b) RATE OF REDUCTION AND OTHER CONSIDER13 ATIONS.—In promulgating the regulations required by 

14 subsection (a), the Commission— 

15 (1) shall prohibit an early termination fee that 

16 exceeds the cost to the provider of the handset de17 vice provided to the subscriber, reduced by the price 

18 paid by the subscriber for the handset device at the 

19 start of a subscriber’s contract; 

20 (2) shall require a ratable reduction of the early 

21 termination fee over the term of the contract; 

22 (3) shall require clear and conspicuous disclo23 sure of the early termination fee at the point of pur24 chase and disclosure on customers’ monthly state25 ments of account of the prorated early termination 


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1 fee that would be due if the contract were termi2 nated before the end of the next billing cycle; 

3 (4) shall consider, among other things, the ef4 fect of early termination fees on competition and on 

5 the ability of consumers to select and change pro6 viders of commercial mobile service; and 

7 (5) shall consider the economic basis and busi8 ness rationale for the imposition of early termination 

9 fees by providers of commercial mobile service. 

10 SEC. 3. NO PREEMPTION OF STATE LAW. 

11 Nothing in this Act shall be construed to preempt the 

12 laws of any State or local government regulating early ter13 mination fees chargeable to residents of that State or ju14 risdiction by commercial mobile service providers to which 

15 section 2 applies. 

Æ 


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