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July 7, 2010

The CTIA (Wireless Association, originally known as the Cellular Telephone Industries Association) came out with a loud response to the FCC's public notice on how U.S. wireless users can avoid experiencing bill shock, a term the trade group says isn't properly defined in what it considers a flawed FCC survey.

In all, a total of no less than 275 comments were filed in the FCC's proceeding on whether the U.S. should mandate that wireless carriers offer usage alerts and cut-off certain mechanisms similar to what is required in the European Union regarding international roaming rates.

Reply comments to the FCC are due Monday, July 19.

In its brief, the CTIA said only 13 percent of the 3,000 people surveyed by the federal commission said they experienced unexpected increases in their wireless bills from month to month, including increases as small as $1.

The trade lobbying group added that the agency never asked whether higher bills came from increased usage by the end user, or put a timeframe on when wireless consumers had experienced higher bills.

The CTIA also criticized the term "bill shock" noting the FCC never used the term in its survey questions. It said the term "account overcharges" would have been more appropriate.

“Of those experiencing bill shock, about 35 percent of those bill increases were $50 and more – in essence resulting in direct cost increases to mobile consumers of at least double their standard monthly bill for cell-phone service,” the CTIA said.

“As wireless carriers and operators in the U.S. increasingly shift away from unlimited data plans to more tiered offerings with strict usage limits such as AT&T's new data plans, the chance of consumers incurring even more overcharges in the short term is likely to increase,” the CTIA noted.

The CTIA added that a telemarketing sales rules proceeding in front of the Federal Trade Commission could also impact its ability to send customers alerts that they are nearing their usage limits. That proceeding would require consumers to implicitly consent to receive autodialed or prerecorded messages from wireless carriers, something that the CTIA doubts will happen anytime soon.

On the flip side of the coin, 14 consumers organizations, including the Consumers Union, Public Knowledge and the New America Foundation, said federal law is needed to force wireless carriers to warn users about going over their allotted voice, data and text minutes, as well as clearer pricing in advertising messages and better warnings on those increasingly expensive roaming charges that almost every wireless user hates so much, especially in the U.S.

The CTIA ended its comments by saying that consumers have a variety of ways to find out if they are near their usage allotments, including carriers that send messages to customers, third-party applications that can be downloaded to mobile handsets and prepaid options for people who are concerned about going over their monthly allotments.

The wireless industry trade group also said that service providers that have to implement new billing solutions to comply with new laws likely will follow the letter of the law, rather than the spirit of the law, stifling industry innovation for the most part.

On May 27, the FCC released a survey that suggests almost 17 percent of mobile users have experienced bill overcharges in the last 6 months with their wireless carriers.

A few weeks ago, the FCC’s Consumer and Governmental Affair Bureau just unveiled a new initiative designed to counter unexpected overcharges on monthly wireless bills.

Increasingly, surveys and various market research reveal that wireless consumers are more and more surprised by various unexpected overcharges on their monthly wireless bill. They are asking the FCC that some changes be made to prevent mobile service operators from overcharging their customers.

The Federal Communications Commission said it will seek input on ways to alert consumers about “potential high charges before they add up,” citing a solution required in Europe by the European Union. A number of wireless carriers currently provide text messaging alerts to consumers that are getting close to their allotment of calling minutes, though most are geared toward prepaid services.

A group of congressmen said today they are going to try to revise the Telecommunications Act of 1996, and 74 congressmen said they were concerned with the FCC's plan to regulate broadband services.

CTIA President Steve Largent issued a strong statement on the FCC's survey. “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. It seems the Commission is going to attempt to micromanage what is an incredible array of choices for consumers. From prepaid to postpaid, subsidized handsets to unsubsidized, contracts with ETFs to those without, large, medium or small buckets of minutes and ‘all-you-can-use' plans, consumers have an unbelievable range of choices."

Largent continues "contrary to the statements in the press release, the industry does provide 'simple and easy to understand' plans for every type of American consumer.”

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Source: The CTIA.