Google Cuts Early Termination Fee

One of a variety of complaints about the Nexus One has been the deathly steep early termination fee–a $350 “equipment recovery fee” from Google. Buyers that drop or downsize their T-Mobile coverage within the first 120 days are subject to the fee, which essentially bridges the gap between the subsidized and unlocked versions of the phone.  However, those customers are also be nailed with a $200 fee from T-Mobile. The poor 3G coverage reported by many T-Mobile users has compounded the problem.

The fee has been lowered to $150. Combined with the $200 T-Mobile fee, Google’s fee will now represent the $530 cost of the unlocked version of the phone, essentially eliminating the drastic penalty for buying a subsidized version and dropping T-Mobile.

The move comes after the FCC had sent an inquiry to Google and several service providers on the issue of these type of fees.

Google said that it had been working with T-Mobile to lower the price tag. In a statement, the company offered: “…We make no profit from commissions from operators or from equipment recovery fees, and our recovery fees are based on operator charges to Google for early termination of service.”[via WSJ]