AT&T to Hike Early Termination Fees in June for iPhone, Netbook Contracts

AT&T starting June 1, 2010 will be raising early termination fees for new iPhone and mobile-connected netbook subscribers from the current $175 to $325, the Wall Street Journal reports. The move is certain to outrage consumer advocates and put off potential buyers, and certainly will not help reduce the degree of regulatory scrutiny now being focused on early termination fees and contracts.

Some will speculate the move is designed to limit desertions if Verizon Wireless is able to start selling iPhones in 2012. That doesn't make quite so much sense, since a GSM iPhone won't work on the Verizon network.

Perhaps the more-logical explanation is that a new iPhone model expected to be released in June will provoke a large churn of customers from the older models to the new models.

Nor does the move immediately explain why connected netbooks are seeing the higher charge. A customer able to buy a $199 iPhone is getting a subsidy of about $400, since the retail, non-subsidized price would be $599 without a contract. But the netbook subsidy does not appear to represent that large a subsidy. Perhaps a significantly-better retail plan is coming, or AT&T thinks netbook owners will want to substitute an iPad.

On the other hand, maybe AT&T is simply moving to bring its ETFs more in line with Verizon Wireless ETF fees, which likewise were hiked from $175 to $350 for smartphone devices.

AT&T will pro-rate the new fees, which will fall by $10 for each month that passes in the two-year agreement.