BUSINESS BRIEFING / TELECOM

Sprint Nextel Corp. has agreed to pay $17.5 million to settle a lawsuit claiming that the fees it has charged customers who end their wireless contracts early are illegal.

The Overland Park, Kan.-based company said it would pay $14 million into a common fund and provide an additional $3.5 million in non-cash benefits to class members. The lawsuit, filed in federal court in New Jersey, covers Sprint, Nextel or Sprint Nextel customers who signed personal or mixed personal/business service contracts from July 1, 1999, to Dec. 31, 2008. Sprint said it would not insert a flat early termination fee provision in its customer contracts until 2011 but may charge pro-rated fees up until then.

The settlement resolves all outstanding litigation regarding early termination fees except for a state court case pending in California.