WASHINGTON (Reuters) - One of the top U.S. wireless carriers is trying to forge a deal with consumer groups and regulators that would reduce the fees customers are charged when they cancel their cell phone service early.

One of the major U.S. wireless carriers told Federal Communications Commission Chairman Kevin Martin that it had made “substantial progress” toward a compromise with consumer advocacy groups over the fees, Martin said on Friday.

Martin did not say which carrier he had spoken with, but a source familiar with the discussions identified it as No. 2 U.S. mobile service, Verizon Wireless.

“I think it would be good for consumers and ultimately good for the industry if there was more of a national framework with consumer protections built into it,” Martin said at a media briefing.

The early cancellation fees are a perennial complaint of wireless phone customers, and have drawn complaints from some lawmakers in Congress.

Wireless carriers such as Verizon Wireless, AT&T (T.N) and Sprint Nextel Corp (S.N) say the fees are needed to ensure they recover the subsidies they provide for handsets that customers get under the most popular service plans, as well as other up-front costs and rate discounts for those plans.

Verizon Wireless is a joint venture of Verizon Communications Inc (VZ.N) and Vodafone Group Plc (VOD.L).

Martin listed several concerns he has about the current early termination fees, including that the fees go into effect even before customers receive their first bills, and that in some cases they remain high even as a customer's contract nears expiration.

Verizon Wireless already prorates the early termination fees, reducing them as customers' contracts get closer to expiring. AT&T is scheduled to begin prorating the fees starting on Sunday. Sprint Nextel has indicated will do so by the end of this year.

The compromise floated by Verizon Wireless would place additional restrictions on the fees the carriers could charge, and it would shift oversight of the fees to the FCC from state regulators, the source said.

The deal would benefit the industry by taking the dispute over the fees out of the jurisdiction of state courts, where the companies are currently facing a number of class-action suits filed by customers.

According to a filing with the agency, executives with Verizon and Verizon Wireless met with FCC officials on Tuesday to discuss the early termination fees.

The Associated Press reported earlier this week that executives of other leading wireless companies had also agreed to the terms of the Verizon Wireless proposal.

A spokeswoman for Verizon Wireless declined to comment.

Martin said at the news briefing that consumer groups “still have concerns” about the proposal. “I'm not sure there was any consensus yet built around it.”

The commission is scheduled to hold a public hearing on the issue on June 12.

(Editing by Tim Dobbyn)