II 

111TH CONGRESS 

1ST SESSION S. 2825 

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 SENATE OF THE UNITED STATES 

DECEMBER 3, 2009 

Ms. KLOBUCHAR (for herself, Mr. FEINGOLD, Mr. WEBB, and Mr. BEGICH) 

introduced the following bill; which was read twice and referred to the 

Committee on Commerce, Science, and Transportation 

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’’. 


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•S 2825 IS 

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

2 PHONES. 

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

4 date of enactment of this Act, the Federal Communica5 tions Commission shall promulgate regulations requiring, 

6 at a minimum, that providers of commercial mobile service 

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

8 Act of 1934 (47 U.S.C. 332(d)(1))— 

9 (1) prorate any early termination fee over the 

10 term of a subscriber’s contract; and 

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

12 the handset device provided to the subscriber, re13 duced by the price paid by the subscriber for the 

14 handset device at the start of a subscriber’s con15 tract. 

16 (b) RATE OF REDUCTION AND OTHER CONSIDER17 ATIONS.—In promulgating the regulations required by 

18 subsection (a), the Commission— 

19 (1) shall prohibit an early termination fee that 

20 exceeds the cost to the provider of the handset de21 vice provided to the subscriber, reduced by the price 

22 paid by the subscriber for the handset device at the 

23 start of a subscriber’s contract; 

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

25 termination fee over the term of the contract; 


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•S 2825 IS 

1 (3) shall require clear and conspicuous disclo2 sure of the early termination fee at the point of pur3 chase and disclosure on customers’ monthly state4 ments of account of the prorated early termination 

5 fee that would be due if the contract were termi6 nated before the end of the next billing cycle; 

7 (4) shall consider, among other things, the ef8 fect of early termination fees on competition and on 

9 the ability of consumers to select and change pro10 viders of commercial mobile service; and 

11 (5) shall consider the economic basis and busi12 ness rationale for the imposition of early termination 

13 fees by providers of commercial mobile service. 

14 SEC. 3. NO PREEMPTION OF STATE LAW. 

15 Nothing in this Act shall be construed to preempt the 

16 laws of any State or local government regulating early ter17 mination fees chargeable to residents of that State or ju18 risdiction by commercial mobile service providers to which 

19 section 2 applies. 

Æ 


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