One of the biggest and most preferred wireless carrier in the United States, Verizon Wireless had recently announced a hike in its user contract termination fees and that has the Federal Communications Commission all riled up, as the FCC has has now asked Verizon to give a valid reason for the hike.

Previously, the consumers were liable to pay $175 to Verizon to cancel their contract with the company, before the expiration of the user-Verizon contract. However, last month Verizon decided to raise the termination fee to $375, thus instigating a response from the FCC. Verizon has been given a deadline till December 17th, 2009 to provide FCC with a valid reason.

Verizon had previously stated that, the hike in the contract termination fee has come in the wake of the increasing costs to the company as the subsidies on the handsets offered by the carrier and pre-mature termination of the contract making it unprofitable for the company.

In a letter sent to Verizon Wireless, FCC has stated,

“It appears that if a customer cancels a two-year contract after 23 months, the customer would still owe an ETF of $120. Is this correct? If the ETF is meant to recoup the wholesale cost of the phone over the life of the contract, why does a $120 ETF apply?”

The FCC is also uncomfortable with the fact, that the termination fee is not mentioned on the user-Verizon contract in print and the commission is also quite concerned with the fact that, the users might get into a contract that they do not fully understand, due to the omission of the pricing data from the contract.

Via Computer World.