Commentary

Wireless Carriers, FCC To Announce 'Bill Shock' Accord

The Los Angeles Times says “consumer advocates” call it “bill shock”; the New York Times says it’s the term preferred by the Federal Communications Commission, which has been investigating the situation for 18 months. In either case, it’s the consensus coinage for the monthly event that takes place in homes across the country when the bill arrives for what you (and often your unwitting family members) have done on your wireless devices –- even if you didn’t realize you were doing it.

The wireless industry trade group, CTIA, and the FCC will announce an agreement today under which the carriers are “rolling out more consumer-friendly billing practices, fending off a plan by communications regulators to impose new rules against unexpected charges,” as Reuters’ Jasmin Melvin puts it this morning. In short, the companies will provide alerts to customers who are approaching their limits on voice, data, text and international charges.

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The FCC found last year that unexpected increases in cell phone bills have been experienced by one in six mobile users, and 23% of those users faced unexpected charges of $100 or more, several reports on the imminent announcement inform us.

The agreement “binds all of the members of the industry’s largest trade group, and therefore covers virtually all of the country’s more than 300 million wireless accounts, according to the FCC chairman, Julius Genachowski,” Edwin Wyatt writes in the New York Times.

This will all happen with the speed you’d except from an industry built in instantaneous connectivity, right? Wrong. “The companies will provide the alerts to consumers within 12 to 18 months, FCC officials said,” Amy Schatz reports in the Wall Street Journal.

The FCC also will announce that it is joining with Consumer Reports publisher Consumers Union to create a website that provides information about when each carrier will start sending overage alerts and where customers can report problems. A Consumers Union survey earlier this year showed that more than 60% of wireless customers supported government intervention on the issue, Schatz reports.

The CTIA had opposed the government regulations, Jim Puzzanghera writes in the Los Angeles Times, “arguing that the problem was not widespread and that government rules could harm industry growth. But as the lengthy rule-making process began, the trade group and the FCC started discussing voluntary guidelines.”

The agreement is "a perfect example of how government agencies and industries they regulate can work together … to consider whether new rules are necessary or would unnecessarily burden businesses and the economy," says CTIA president Steve Largent (the retired congressman and football Hall of Famer).

The White House knows a populist position when it sees one, of course. "Far too many Americans know what it's like to open up their cell phone bill and be shocked by hundreds or even thousands of dollars in unexpected fees and charges," President Obama said in a statement. "Our phones shouldn't cost us more than the monthly rent or mortgage."

The plan is sure to come under fire from some activists -- and even analysts -- who feel it doesn’t go far enough. Gartner’s Phillip Redman tellsUSA Today’s Mike Snider: "There's no guarantee that [it] would eliminate overage charges…. What's needed is clearer pricing and cellular companies working harder to better align users with the proper plan.”

If you’re experiencing a sense of déjà vu, last year around this time, Slate’s Timothy Noah constructed a rather convoluted metaphor about blindfolded people walking towards open manholes to make the point that the rule the FCC was contemplating, which pretty much sounds identical to agreement reached with CTIA, didn’t go far enough. Here’s the gist of it:

“Nobody should walk into a manhole blindfolded without being warned twice. That's better than what the cell phone companies arrived at on their own: Nobody should walk into a manhole blindfolded without being warned ineffectually. Best of all, though, would be: Nobody should walk into a manhole blindfolded, period. Manholes are dangerous!”

Having signed up for alerts from my carrier some time ago, I’m not sure that this agreement will have much impact on the six stages of cell phone grief I still sometimes experience: denial, anger, bargaining, depression, acceptance and, finally, surcharge, whereupon you pay a new monthly surcharge on your plan so that your daughter’s calls to her boyfriend serving in the Peace Corps in Slovenia will be limited to $XX monthly.

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