Elucidating the rationale behind its hike in early termination fee (ETF), Verizon Wireless, in response to an inquiry by the Federal Communications Commission (FCC), said that the move would enable the company to recover the costs of advertising, store, sales commissions, and developing a stronger broadband network.

In a seven-page Friday filing with the FCC, Verizon justified its move saying that the increase in its ETF from $175 to $350 particularly for "advanced devices" would further help the company not only in providing the phones at lesser upfront costs, but also in diminishing its losses if the customers break their contracts before time.

The "advanced devices" on which Verizon's high ETF is specifically applicable include handsets with dual processor chipsets; premium HTML browser; high-resolution MP camera; Wi-Fi; and operating systems like Windows Mobile, BlackBerry, Android or Palm.

In response to the FCC's query about ETF awareness for customers, Verizon said that it is undertaking widespread advertising and marketing efforts to apprise the customers about the change in ETF.

Replying to a question regarding the pro-rate of ETF to zero, Verizon clarified: "Customers as a whole would be worse off if Verizon Wireless were to pro-rate the ETF to zero, because early terminations occur disproportionately in the early part of the contract term, and relatively few customers terminate near the end of the contract term."