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AT&T Raising Its Early Termination Fee As Of June 1

by Sean P. Aune | May 22, 2010May 22, 2010 1:37 pm PDT

As of June 1st, if you want to terminate your smartphone contract with AT&T early, it’s going to run you a whopping $325 compared to the old rate of $175.

News broke from The Wall Street Journal that AT&T was going to be raising the early termination fee (ETF) from $175 to $325 effective with all new contracts for smartphones begun after June 1 of this year.  (In other words, there is no change to existing contracts)  The fee will be reduced by $10 for each month you remain with the company, culminating with the fee disappearing, as it should, when your two year contract is up.

at&t death starWhat is causing people to eye this with a greater amount of suspicion, rather than just being annoyed, is the timing.  The new contract will start on June 1 … the iPhone 4G/HD (whatever Apple ends up calling it) is expected to debut on June 7th … suspicion is rampant that AT&T will lose iPhone exclusivity before the end of the year.  So, people rush to buy the new iPhone, they sound this new contact, and … couple months later they learn the phone will also be sold by Verizon.  Seeing how unhappy people have been with AT&T’s service, it won’t be surprising when a goodly number of people opt to pay the ETF so they can finally switch carriers.

Yes, this is very conspiracy theory of me, and, yes, Victor Godinez at the Dallas Morning News Technology Blog did get confirmation from AT&T that this was unrelated to the iPhone:

UPDATE: I just spoke with AT&T spokesman Mark Siegel, and he confirmed the numbers in the Journal report.

“The idea is, and we think that it’s fair approach, that if you spend less on a device, your early termination fee should be less,” he said. “If you spend more, your early termination fee should be more.”

He said the decision to implement the higher fee was unrelated to the iPhone or any other single phone.

That’s all fine and good, but do we really think AT&T would admit it?  It may very well not be related to the iPhone, it could be pure coincidence, but somehow our gut tells us it really is all about the iPhone and trying to retain customers if the exclusivity does end up ending this year.  You can read the Open Letter AT&T wrote to its customers here and make up your own mind.  We’re sticking with this being about the iPhone.

What say you?  Why is AT&T suddenly changing its smartphone policy at this very peculiar date?


Sean P. Aune

Sean P. Aune has been a professional technology blogger since July 2007, but his love of tech dates back to at least 1976 when his parents bought...

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