The Federal Communications Commission is continuing its scrutiny of the wireless industry, offering a fresh batch of data points to make the case that carriers need to do more to clarify their billing practices and rein in fees and overage charges.
The survey highlighted two issues that have recently found themselves in the crosshairs of the FCC. It found that a large portion of mobile subscribers were in the dark about the early termination fees (ETF) carriers charge for canceling service before a contract before it expires, and that a significant number had experienced what the agency terms “bill shock,” the unpleasant experience of opening the monthly bill to find steep overage fees for exceeding voice, text or data allotments.
“The wireless industry has achieved remarkable innovation — and mobile is increasingly essential to the daily lives of Americans,” FCC Chairman Julius Genachowski said in a statement. “But there is still more that can be done to help customers navigate what is sometimes a confusing marketplace.”
According to the survey, one in six mobile subscribers, or 30 million, said they had experienced bill shock. Of those, 84 percent said their carriers had not notified them when they were approaching the limits of their plan.
As to the termination fees, of the 54 percent of subscribers who knew they would be subject to an ETF, 43 percent said the penalty would be at least $150, while 47 percent didn’t know what the charge would be.
For the industry, the inquiry could lead the commission down a dark path, potentially resulting in regulation of the contractual terms they offer consumer and even enterprise wireless subscribers.
The survey is the latest indication of increasing scrutiny of the wireless sector at the FCC. Earlier this month, the
Then last week, the FCC approved an in-house report which, for the first time in years, did not arrive at the conclusion that there is effective competition in the industry. While the authors of the report did not recommend any specific actions for the commission to take, they hinted at the use of “policy levers” to resolve troubles in the market.
For CTIA, the leading trade association representing the wireless industry, these moves collectively point to an alarming trend that augurs for greater regulation of a sector of the economy it argues has flourished under a hands-off government approach.
“I am very troubled with the current direction the FCC is taking with respect to the wireless industry — from the messaging sent last week in the Mobile Competition Report to today’s survey release,” CTIA President and CEO Steve Largent said in a statement. “It seems the commission is going to attempt to micromanage what is an incredible array of choices for consumers.”
Largent argued that the carriers he represents go out of their way to provide subscribers with notice when overage charges are piling up, and suggested the commission take a different tack if it’s worried about protecting consumers.
“If the FCC is interested in controlling ‘shock’ on consumer bills, they should address the most egregious part of consumers’ bills, which is the almost 16 percent rate of taxes and fees imposed by federal, state and local governments on wireless consumers,” he said.
Kenneth Corbin is an associate editor at InternetNews.com, the news service of Internet.com, the network for technology professionals.