ETF (early termination fee) is the charge that customers will have to pay when they end their contract early. The provision of the EFT supports the wireless company to offer phones to customers at a lower or discounted price than the original price.
Verizon’s response to the FCC mentions that even with the increased fee, they would also be the sufferers as they would still be losing money from every termination because carrier prorates the EFT.
They also mentioned that additional revenue from the ETF’s is actually useful to keep its broadband network strong and also to reimburse costs that are associated with advertising. Verizon had increased the EFT for advanced devices like those including HTML browser, high resolution MP camera with optical zoom, those like BlackBerry and Motorola Droid.
The charge used to be $170 but that has now been increased to $350, it would generally be more economic for customers to do so according to Kathleen Grillo senior vice president of federal regulatory affairs for Verizon, as customers who terminate walk away with a device which still has value. Source – whitehatfirm.com