Thank you VZW

While the $375 early termination fee is pretty steep, it's only being applied to what Verizon calls "advanced devices" - mostly smartphones, netbooks, and mobile broadband cards. These devices have relatively deep carrier subsidies, and the ETF helps recover the cost of those subsidies.

As an example, as of right now, the actual retail price for a Motorola Droid is $559.99 on the Verizon Wireless website. With a two year contract, the carrier is basically fronting over half of that price at the very beginning. The carrier hopes to recoup it's loss on that deal with the profit margin on 2 years of service. That's the way the majority of US carriers work, so this type of fee is nothing new. What is new in this situation is that Verizon is differentiating between two different "classes" of device in how this fee applies, rather than spreading the cost among all it's customers. They also prorate the ETF now, gradually decreasing it for each month of service.

My big complaint with this fee personally is that it's not EVENLY prorated though, in month 23 there is still a fairly substantial ETF involved which seems a bit unfair. We shall see what happens with that though, as a lot of people are up in arms about it.