Senator goes after cell phone fees, contracts

WASHINGTON (Reuters) - Some cell phone companies charge their users $100 to $200 to end a contract no matter what the reason and disguise their own charges as taxes on bills, witnesses told a congressional panel on Wednesday.

In a hearing to discuss a bill to end these practices, Verizon Wireless CEO Lowell McAdam stonily pleaded for a "light touch" in regulating the cellular telephone industry.

"We talk to customers every day. We don't need interference," he told the Senate's Commerce, Science and Transportation Committee. "I don't believe that this is necessary regulation."

The bill requires that early termination fees be pro-rated. Companies now sometimes charge $100 to $200 to users who decide to switch to another service, even soldiers who wanted to drop their service because they were being deployed to Iraq.

"We believe it's time for simple limits on early termination charges," said Sen. Amy Klobuchar, a Minnesota Democrat who is sponsoring the bill along with fellow Democratic Sen. John Rockefeller of West Virginia.

The bill would also require cell phone companies to identify as "taxes" only charges that were required by federal, state or other regulation.

Chris Murray, a senior counsel for the consumer group Consumers Union, called the charges a "junk fee."

"It's the 'we can charge you fee' so here you go," he said.

Lawmakers also wanted companies to eliminate the practice of extending cell phone contracts without the consent of the user if changes were made to the bill that were as simple as raising or lowering minutes.

Verizon's McAdam said his company let soldiers out of their contracts without charge when they were deployed, and did not pad regulatory fees on bills.

He said Verizon was successful because it treated its customers fairly. "Competitive markets punish bad behavior," he said.

Verizon Wireless is owned by Verizon Communications Inc (VZ.N) and Vodafone Group Plc (VOD.L).

(Reporting by Diane Bartz)