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Google Nexus One

The Mountain View, Calif.-based company said its "equipment recovery fee" has been lowered to $150 from $350, but consumers that break their service contracts will still have to pay a T-Mobile early termination fee of $200.

Subscribers who break the contract after 120 days will not have to pay any fee.

Google's decision to lower the fee comes after the Federal Communications Commission sent a letter asking why Nexus One consumers have to pay fees to both companies if they break a contract.

Federal regulators have also asked the major carriers -- AT&T, Verizon, Sprint and T-Mobile -- about their approaches and rationale for early termination fees, whether they prorate charges if consumers cancel closer to the end of their service and whether trial periods are offered to let new subscribers leave without being penalized.

The inquiry is part of a larger probe launched last year to investigate how much customers know about the charges being billed to them each month.

Late month, Verizon shied away from increasing its fees on smartphones after the FCC sent a letter asking why the company doubled its early termination fees to as much as $350 from $175.

In 2008, Verizon settled a $21 million lawsuit over its early termination fees, while Sprint reached its own $17.5 million settlement in August. Earlier last month, AT&T agreed to pay $18 million.