On Sunday, Jan. 17, 2010 Verizon Communications takes a step that it may regret.

That’s the day the new FiOS TV and Internet bundling plans are announced.

Friday night, I got a sneak peek, and there’s one stinky little detail in there that couldn’t come at a worse time.

Verizon is raising its early termination fees for new customers to $360.

That comes a couple of months after Verizon Wireless raised its early termination fees for “smart” cell phones to $350.

That action, taken in November, brought negative attention from the Federal Communications Commission, now newly-constituted with Obama appointees.

If Verizon thought that was bad then, just wait…

As first reported in the Dave Lieber column in the Jan. 15, 2010 Fort Worth Star-Telegram, Verizon isn’t alone in charging those fees, but lately, it’s become the poster child for high fees. Across the industry, these fees, called ETF, are among the top four consumer complaints about cell phone service, according to one government report.

One Obama appointee, Commissioner Mignon Clyburn, wasted little time in shifting the FCC’s focus. Two days before Christmas, in only her fourth month in office, she released a statement criticizing Verizon.

She said the company’s answers to the FCC’s questions about the $350 ETF were “unsatisfying” and “troubling.”

The company keeps changing its reasons for the fee, she stated. Verizon has always said the fees cover the true cost of phones, which are discounted heavily when bought with cellphone service. But in its written response to the FCC, the company acknowledged that the fees may also cover “advertising costs, commissions for sales personnel and store costs.”

“Consumers already pay high monthly fees for voice and data designed to cover the costs of doing business,” Clyburn stated. “So when they are assessed excessive penalties, especially when they are near the end of their contract term, it is hard for me to believe that the public interest is being well served.”

Clyburn is the daughter of the House majority whip, Rep. James Clyburn, D-S.C. She served 10 years on South Carolina’s utility regulatory commission.

I wonder what Clyburn is thinking now that Verizon has confirmed a previously published report about its newest ETF increase for Internet, home phone and television services.

The Philadelphia Inquirer reported earlier this month that it had seen copies of Verizon documents accidentally posted on the company’s Web site. The documents indicated that the early-termination fees for the TV/Internet service could double to $360 as early as Sunday for new two-year-contract holders. The $360 fee would drop on a sliding scale as each month of the contract passed, the newspaper stated. Verizon’s other ETFs also prorate downward through the contract period.

Friday night, two days before Verizon FiOS’ official unveiling, spokesman Lee Gierczynski gave me permission to release details of the newest plan. Here it is, in its entirety:

Hi, Dave:

I’m reaching out to you ahead of time to brief you on the new FiOS packages that Verizon will be launching on Jan. 17.

• We’re introducing new FiOS bundles on Sunday that include new TV packages, unprecedented symmetrical broadband speeds and new promotional incentives.

New triple-play bundle options with a service agreement include:

• Ultimate:  FiOS TV Ultimate HD includes 90 or more HD channels; premium content from EPIX, Showtime, TMC, Flix and the NFL RedZone;  FiOS Internet service with an ultra-fast, symmetrical connection speed of up to 35/35 Mbps; and FiOS voice service – all available for $139.99 a month.
• Extreme:  FiOS TV Extreme HD includes 65 or more HD channels; FiOS Internet service with an ultra-fast, symmetrical connection speed of up to 25/25 Mbps and FiOS voice service – available for $124.99 a month.  In the New York City area this bundle also includes Showtime, TMC and Flix, for a total of 80 or more HD channels, and is available for $119.99 a month.
• Prime:  FiOS TV Prime HD includes 40 or more HD channels; FiOS Internet service with a connection speed of up to 15/5 Mbps and FiOS voice service – available for $109.99 a month.

• These bundles are available with a 24-month service agreement that includes a pro-rated ETF and provides our deepest discounts, promotional incentives and 24 month rate guarantee — or with month-to-month pricing and no contract and no ETF.

• Customers do not have to have a 24-month service agreement or ETF if they want a bundle.  We also offer bundles with month-to-month discount pricing that provide significant savings over a la carte services.

• I can confirm that starting Sunday the ETF on a two-year FiOS bundle will be $360.  The ETF is pro-rated, with $15 subtracted for each full month that the customer honors their contract.  The two-year agreement gives customers the benefit of our deepest discounts, promotional incentives for even more savings, plus a rate that’s guaranteed for the length of the two-year agreement.

• In general, term-plan bundles provide an additional $20 a month savings over discounted month-to-month plans.  Plus, with promotional incentives the savings with a term plan over a month-to-month plan can rise to $40 a month during the first year. (note:  in 7 months you’d break even on your ETF  ($280 in savings versus $270 ETF after pro-ration).

[End of company statement]

This newest termination fee increase is sure to stir the pot. One can imagine consumer advocates who previously have called for ending early-termination fees getting a new energy boost from this.

On the wireless side of the company, Verizon Wireless spokeswoman Audrey Lundy says the company must charge the fees to help pay for the expanded networks that the advanced devices use. For the $350 smartphone ETF, Verizon says it will drop $10 for every month, leaving a $110 fee in the last months of the contract. Customers can also return the device in the first 30 days without any penalty.

Lundy says customers can buy services month to month. The devices are much more expensive, but no ETF is charged.

Last month, U.S. Sen. Amy Klobuchar, D-Minn., introduced the Cell Phone Early Termination Fee, Transparency and Fairness Act, which requires providers to prorate contracts, disclose terms upfront and link ETF to what the provider actually paid for a phone. Verizon and other carriers face two possibilities: Congress could vote to regulate the fees, or the newly reorganized FCC could enact stricter rules.

An aide to Clyburn told me that her battle against excessive ETF is just beginning.

“This is an issue she’s really concerned about, and we’re going to pursue it vigorously,” vowed Clyburn’s spokesman, Rick Kaplan.

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What to ask

-How much are the early-termination fees?

-Are the fees prorated if you cancel early?

-What is the advantage of a month-to-month contract?

-What other fees are involved?

-If you have problems, call the Federal Communications Commission’s Consumer Hotline at 1-888-CALL-FCC to share your experiences, opinions and complaints. Information from the calls is collected and studied, an FCC spokesman said.

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Dave Lieber, The Watchdog columnist for The Fort Worth Star-Telegram, is the founder of Watchdog Nation. The new 2010 edition of his book, Dave Lieber’s Watchdog Nation: Bite Back When Businesses and Scammers Do You Wrong, is out. Revised and expanded, the bookwon two national book awards in 2009 for social change. Twitter @DaveLieber