Early termination fees are a thing of the past, according to research from HighSpeedInternet.com.
The company keeps a huge database of service providers and the elements of the packages they offer. Until a few years ago, this included early termination fees (ETFs), which are the per-month charge incurred in leaving the provider before the expiration of the contract.
The researcher did some digging. “I followed the digital trail all the way to checkout carts from home internet providers nationwide, and checked my gut feeling against broadband labels for several real addresses. Sure enough, contracts had disappeared for every fiber and cable company I researched.”
She noted that there were some minor exceptions.
The trend was relatively recent. As recently as two years ago, HighSpeedInternet.com advised its readers to expect fees of $10 to $15 per month for breaking the contract.
Fiber providers were the first group that dropped the fees. They were followed by 5G home internet providers.
The company suspects that the extra fees were dropped simply because competition grew. It’s bad business to demand a fee when so many quality providers offer services without the potential extra charges, which can add up to a lot of money—and are annoying. The end of the ETFs also was in line with the desire of the FCC to reduce “junk fees.”
HighSpeedInternet.com said the issue went a bit silent during the COVID-19 pandemic, but rose to the fore again in late 2021 when Congress passed the Infrastructure Investment and Jobs Act. The act directed the FCC to offer “broadband nutrition labels” that, like the real nutrition labels after which they were named, identified the ingredients of the product being bought. The labels went into effect in 2024.
The piece concludes that the end of the ETFs coincided with the rise of price locks. The point is that competition has created a situation in which a service provider must offer good service and competitive features to survive, not take a few dollars from customers who want to leave — and likely were unaware of the commitment to pay to do so.