When last we left the Federal Communications Commission's investigation of the early termination fees (ETFs) that wireless companies charge consumers to drop their mobile phone contracts early, Commissioner Mignon Clyburn was concerned. In fact, she was unsatisfied, troubled, and even "alarmed" at Verizon's explanations for why the company now sets its ETF price tag for smart phones at a hefty $350.

"I look forward to exploring this issue in greater depth with my colleagues in the New Year," her statement concluded. Guess she wasn't kidding.

On Monday, the agency sent fresh letters of inquiry to just about everyone: AT&T, Google, Sprint-Nextel, T-Mobile, and Verizon (again!). And the FCC had some particularly pointed questions about the Google T-Mobile Nexus One.

Your rationale

The FCC is "investigating options for improving consumer information and transparency about communications services and fees, including ETFs," these five missives note. And, they add, there doesn't seem to be any standard industry-wide practice around early fees. Thus, "the absence of a standard framework makes it especially important that consumers have a clear understanding of terms and practices of individual companies, which will allow them to compare services offered by different providers on a clear and consistent basis."

Hence these queries—such as: Which of your service plans include ETFs? How much of a hardware discount do consumers get in exchange for a long term contract? Can consumers buy smart phones at full price and thus avoid an ETF?

Last comes the Big Question (number 12): "Press reports and public statements from wireless companies have attributed ETFs to several different factors," the Commission asks. "What is the rationale for your ETF(s), and how specifically do the structure and level of those ETF(s) relate to that rationale?"

Double surprise

The answers from Google and T-Mobile ought to be particularly interesting. The FCC's letter to T-Mobile notes that, unique among the big carriers, the telco offers lower monthly rates to consumers who purchase a handset outright. On the other hand, buying a two year contract for, then gradually discovering that you no longer want, your Google-made/T-Mobile-networked Nexus One carries a hefty financial risk.

As we've reported, should you decide to pull out of the deal within 120 days of starting contract, Google's got a $350 Equipment Recovery Fee waiting for you. Plus, T-Mobile tacks on its own $200 for cancellations within the first four months of the agreement.

Grand total: $550 bucks on your credit card—although you won't get charged (as much) if you cancel within the first two weeks of your purchase and send back the phone.

"The combination of ETFs from Google and T-Mobile for the Nexus One is also unique among the four major national carriers," the FCC observes. "Consumers have been surprised by this policy and by its financial impact. Please let us know your rationale(s) for these combined fees, and whether you have coordinated or will coordinate on these fees and on the disclosure of their combined effect."

The FCC's letter to Google adds that it regards Google's "Equipment Recovery Fee" as an ETF.

The companies have until Tuesday, February 23 to fork over their replies to this latest probe, though they can request confidential treatment if they want. Google has done this before, sending a redacted response to the FCC following the Commission's request for more information about Apple's decision to block Google Voice from the AT&T networked iPhone.

Avoiding the burden

Meanwhile, the ETF lawsuits continue. Most major carriers have settled class actions related to them over the last year or two, often over the issue of flat-rate ETFs that don't decline as the contract nears its end.

AT&T and a pair of law firms from Los Angeles and New Jersey are now in settlement negotiations following another such suit claiming that the flat rate ETFs AT&T charged consumers between January 1, 1998 through November 4, 2009 were unlawful. Those were the non-prorated, full price ETFs that consumers found on their credit cards even if they quit their contract just days before it expired.

"AT&T Mobility strongly denies any wrongdoing, but has agreed to settle to avoid the burden and cost of further litigation," the class action suit's website says. AT&T Mobility will pay $16 million in cash and $2 million in non-cash benefits into a settlement fund, according to the notice.

The case is being overseen in the United States District Court for the District of New Jersey. It follows recent settlements in which T-Mobile agreed to pay $11 million and Sprint settled for $14 million over flat rate ETFs. Many smart phone contracts are now pro-rated—Verizon's go down $10 a month through the life of the deal.