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May 27, 2010

The FCC has just 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.”

Meanwhile, 74 congresssmen told FCC Chairman Julius Genachowski they have serious concerns about the way the FCC is trying to regulate broadband services, calling the agency's proposal a distraction that could take away from broadband investment because of regulatory uncertainty.

The policy makers ask the FCC not to move forward with its plan to regulate Internet service providers without congressional approval. The four congressmen seeking to revisit the telecom act – Sen. John Kerry (D-Mass.), Rep. Henry Waxman (D-Calif.), Sen. Jay Rockefeller (D-W.Va.), and Rep. Rick Boucher (D-Va.) – are said to favor the FCC's regulatory proposal for broadband services.

Underlying all of the commotion is questions about the nation's broadband networks and whether there is enough competition in the wireless industry, and whether the U.S. lags in broadband deployments compared to the rest of the world.

While this primarily impacts wired broadband providers and the FCC and industry agree a light regulatory touch is best for wireless, the sector nonetheless likely will be impacted.

The FCC survey said 30 million U.S. wireless users have so far experienced bill shock, which it defines as a sudden increase in people's monthly bills that isn't caused by a change in service plans. "It also shows that nearly half of all mobile phone users who have plans with early termination fees (ETFs) -- and almost two-thirds of home broadband users with ETFs -- don't know the amount of the fees they're accountable for,” the FCC said.

About 34.3 percent of the people surveyed who said they experienced bill shock said their bills jumped by more than $50 in one single month.

“The FCC's consumer survey provides an important snapshot of the real-world experiences of mobile customers,” said Genachowski. “The wireless industry has achieved remarkable innovation -- and mobile is increasingly essential to the daily lives of Americans. But there is still more that can be done to help customers navigate what is sometimes a confusing marketplace. A simple and easy to understand mobile purchase and billing process will empower consumers to avoid bill shock and other unexpected fees.”

Last month, a study from ID Insight and Successful.com revealed that the broadband competition at the county level suggests that often people can only choose between two broadband providers.

“Contrary to claims of those who feel that the United States has ‘robust broadband competition,' it may be that half of the states have a 'duopoly' rather than true competitive markets. The only question for these states is how much of a market share the top two wireless providers collectively command."

"In states such as Ohio and Nevada, where there is a 30+ percentage gap between the top two providers, some will argue this is a monopoly," said ID Insight.

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Source: The FCC.