While employees have been ordered not to talk to customers about the change, starting on Nov. 15, the Early Termination Fee (ETF) for these devices will increase from $175 to $350. According to a leaked document the higher ETF, "fairly reflects the higher costs associated with offering feature rich advanced devices to customers at attractive prices."
Early Termination Fees, or ETFs as they are commonly called, are a continual player in the of a love-hate relationship consumers have with cell phones. When consumers get a new phone they love the discount that comes from signing a two-year contract, but when a cool new phone, like the iPhone, comes out they hate having to pay to break the contract.
Even though we generally despise fees and have a special feeling of spite for fees that get raised, given the increased retail cost of new phones like the iPhone, Motorola Droid and others this increase was inevitable.
For example when you sign a new two-year contract for the hyped Motorola Droid on Verizon's network you qualify for a discount of $360 with an additional $100 in discounts if you use a New Every Two agreement on at Verizon.
So, in exchange for two years of voice and data payments, Verizon is giving you a discount of between $360 and $460. In comparison, "feature phones" like the LG Dare often receive a subsidy of -- $200.
If you aren't happy with the new fee for "advanced devices" you can always choose to pay more when you get your phone; but given that the $350 ETF decreases by $10 every month and that's about the amount you save by signing a contract you may be better off taking your chances and getting the discount now.
Keep in mind that if you have a calling plan over $49.99 you are eligible for a subsidized phone on Verizon after just one year with a contract renewal.
Verizon Wireless was contacted, but did not respond for comment.