Cell phone companies propose fees loophole, but there's a catch

The wireless industry has proposed a plan to the US Federal Communications Commission giving consumers a chance to cancel their cellular service without any penalty.

That opportunity would begin for consumers either 10 days from receipt of their first bill, or 30 days after signing their contract. There's a catch, though: If the proposal goes through as written, the FCC will take away the right to states to regulate the wireless charges, which are called "termination fees."

The proposal also calls for cell phone companies to reduce termination fees over the length of of contract, based on the amount of time remaining on the contract.

In consultation with other major wireless providers, Verizon Wireless offered the proposal after meeting with senior FCC officials, according to a report Wednesday afternoon from the Associated Press.

Some representatives of consumer groups such as Consumers Union are reportedly up in arms over the FCC proposal, suggesting that the plan doesn't give consumers enough flexibility around canceling their cell phone contracts.

As previously reported in BetaNews, AT&T Wireless announced a similar pro-rating scheme earlier this month. Starting May 25, customers who are under a one- or two-year phone contract with AT&T Wireless will have $5 taken off the termination fee, for each month of the contract's length.