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Free Press Slams Sprint Decisions to Cap Tethering, Raise Early Termination Fees

WASHINGTON - On Thursday, Free Press responded to reports that Sprint, the nation’s third-largest wireless carrier, would begin capping its “tethering” plans which allow subscribers to use their phones as a mobile hotspots. The plans come with a 5 gigabyte data limit, and a new $0.05 charge per megabyte over the cap — which adds up to $50 per extra gigabyte. The cap comes just a couple of weeks after Sprint announced it would hike its early termination fees to $350.

Free Press Research Director S. Derek Turner made the following statement:

"Sprint’s actions are another troubling symptom of a mobile broadband market that lacks meaningful competition, and this move is the latest in a race to the bottom among mobile providers to see who can squeeze the most out of its customers. This anti-consumer overcharging scheme bears no rational relation to the actual costs of delivering data, which are estimated to be mere pennies per gigabyte.

"This move is a poor solution to an unproven problem, and it will have a chilling effect on economic growth and innovation online. When ISPs force their customers to watch the meter by overcharging so much, experimentation and innovation suffer. This is a giant leap backward for one of the few growing sectors of the national economy.

"We urge Congress to investigate Internet overcharging schemes to ensure that they are not unreasonable or anti-competitive actions by large mobile carriers designed to abuse their dominant market power and pad their profits at the expense of American economic growth and innovation."


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