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The Federal Communications Commission is seeking ways to regulate the fees mobile phone subscribers pay when quitting their contracts early. FCC Chairman Kevin Martin said at a media briefing past week that the FCC and Verizon Wireless had made substantial progress toward a compromise, although there was still no final consensus.

Verizon Wireless has offered a plan that would give consumers a break on fees charged when they quit their service early. But it also would let cell phone companies off the hook in state courts where angry customers are suing them for hundreds of millions of dollars.

According to people familiar with the matter the proposal states that subscribers will be able to cancel their contracts for free during a period of 30 days after signing the contract or 10 days after receiving the first bill. After this period expires, they will have to pay USD 5 less for every month they remain in the network. At this moment, wireless companies charge subscribers who want to terminate their contract early a fee starting at USD 175.

Verizon appears to be the first to enact these plans, as it is now pro-rating these fees down to a USD 60 minimum. Sprint issued a press release about pro-rating termination fees, but has yet to make good on the promise.

While people consider these fees unnecessary and see them as a way of preventing subscribes to change their service providers, wireless carriers such as Verizon Wireless, AT&T and Sprint Nextel Corp say the fees are needed to ensure they recover subsidies they provide for handsets that customers get under the most popular service plans, as well as other up- front costs and rate discounts for those plans.

"Ultimately, it makes more sense for wireless consumers and providers to have one set of clear and consistent guidelines, rather than a 50-state patchwork of regulations," Verizon said. According to a filing with the FCC, executives with Verizon and Verizon Wireless met FCC officials on past week to discuss the early termination fees.