Mixed reviews for mobile consumer rights bill

By Giselle Abramovich

February 29, 2008

Rep. Markey highlights his bill at a field hearing convened by the Federal Communications Commission at the Harvard Law School in Cambridge, MA.

A Congressional hearing on a potential consumer rights bill for mobile phone service garnered mixed reviews, with supporters asking the Federal Communications Commission to develop regulations for the mobile industry.

The bill’s critics say that legislation in this area would place too much regulation on a highly competitive industry. The bill, titled “Wireless Consumer Protection and Community Broadband Empowerment Act of 2008,” was first proposed Feb. 15. It was drafted by Representative Edward J. Markey (D-MA), chairman of the House Subcommittee on Telecommunications and the Internet.

“[The purpose of the bill] is to require the FCC to promulgate new consumer protection regulations for wireless service subscribers, to restrict state and local regulation of public providers of advanced communications capability and service, to increase spectrum efficiency by federal agencies and for other purposes,” the bill says.

“Many consumers complain that some wireless service providers do not clearly or adequately disclose in plain language the products and services for which charges are imposed,” the document says. “Many consumers find it difficult to easily compare the costs and attributes of wireless service offered by different providers because of the lack of consistency in how contracts for wireless service are presented.”

Mr. Markey Wednesday Feb. 27 urged fellow House members to think of consumers’ interests. To make informed decisions between carriers, he said, consumers must be presented all the facts – something that isn’t happening.

All charged up
Wireless service providers usually require customers to sign up for a two-year contract and charge early termination fees of $175 or more if the customer chooses to end the service before their contract is up. Mr. Markey is very wary of these charges.

Also, these early termination fees are often levied at rates that do not reflect the cost of expenditure for the initial customer acquisition, making the charge unfair, the Congressman said.

Carriers do not provide consumers with maps of specific coverage area and therefore consumers sign a two-year plan and then realize the plan that they selected does not meet their needs, Mr. Markey said. At that point it is too late.

The bill also addresses the fact that as carriers increasingly offer broadband telecommunications and information services, consumer protection will be vital with increased consumer reliance on wireless service.

“The second section of the bill clarifies that municipalities have the freedom to provide telecommunications services to their citizens,” Mr. Markey said at the hearing. “If a particular community is unhappy with the wireless, broadband, cable or phone services offered in its area, it should possess the clear freedom under the law to take action on its own to deploy and offer such services.
 
“The idea of municipal empowerment for broadband and other services is built upon provisions that I battled to make law with respect to municipal cable systems as part of the 1992 Cable Act,” he said.

“I believe that as we establish a national policy for wireless consumer protection and state enforcement in this draft, it is simultaneously important to establish that municipalities can take action to offer wireless service on their own or any other communications service for that matter,” he said.

Bad call?
However, several Republicans on the House Subcommittee on Telecommunications and the Internet said the bill imposed too many regulations on carriers. Here’s a key point raised by one of them.

“Competition in the marketplace is what we should be constantly striving for,” said Representative George Radanovich (R-CA) at the hearing. “It is always far superior to meeting consumer needs than government regulation.”

But Mr. Markey questioned detractors of the bill. Why is giving consumers more information a bad thing for carriers, he asked.

The bill is far from being passed, as it is only being introduced as a possibility as of now.

Still, caveat emptor.

Back in the 1990s, the Do Not Call Registry was also just a draft of a bill that could hurt the teleservices industry. Then, on June 27, 2003, the Federal Trade Commission opened the National Do Not Call Registry to comply with the Do-Not-Call Implementation Act.

Mr. Markey happened to be an avid supporter of that bill.

Please click her to see the full draft of the mobile consumer rights bill.