Digital Trends

A diminishing termination fee will make contracts less expensive to kill with time, and existing subcribers can now switch plans without extending contracts.

Back before Cingular fell under the banner of AT&T, an increase in text messaging rates forced the company to let subscribers out of their contracts early without a termination fee, since the terms of the contracts were essentially changing. While that move was made to stay in compliance with certain consumer codes, AT&T’s latest comes completely out of the blue. The company announced Tuesday that it will soften the terms of its contracts, allowing consumers to sneak out early or switch contracts without the same repercussions.

Beginning in early 2008, AT&T will introduce a diminishing termination fee that gets progressively lower as subscribers approach the end of their contracts. In other words, it will cost less to cancel 1 month before the end of a contract than 1 year, since more of the contract has been seen through. However, the new policies will only affect new and renewing subscribers, so current AT&T customers will still be held to the terms they signed up for.

Existing customers, though, will have the option to switch plans midstream without extending their contracts beginning in November. Previously, changing plans in the middle of a contract required consumers to recommit to the minimum length of their new contract, meaning a person eight months into a 12-month contract would have to sign up for a whole extra year of service by switching plans. The new policy would allow a person in that situation to ride out four more months on their existing contract with a new service plan, then choose whether to renew or not at that point.