Chief Sponsors: Representative Steven Walsh and Senator Karen Spilka
SB 1982 HB 3389
Cosponsors: Senators Barrios, Brewer, Joyce, Resor, Montigny, Tarr, Timilty, Tisei, Tucker, and Representatives Atkins, Canavan, Canessa, Festa, Fresolo, Grant, Gobi, Guyer, L’Italien, Kocot, Patrick, Petersen, Provost, Sciortino, Swan, Toomey, Verga
Problem:
Consumers increasingly rely on cell phone service to meet their basic communication needs. The use of wireless communications has skyrocketed over the past few years, jumping from approximately 24 million subscribers in 1994 to an estimated 219 million today (72% of Americans). Along with the growth in the industry has come consumer complaints. In fact, the Federal Communications Commission (FCC), the agency charged with overseeing competition in the wireless industry, has received over 25,000 complaints a year for the last 3 years.
Unlike traditional phone service, wireless service is largely unregulated. The FCC has failed to enact even the most basic consumer protection regulations, instead relying almost exclusively on competition and market forces to protect wireless subscribers. It is clear that competitive pressures alone have proven to be inadequate for ensuring that consumers are treated fairly in the wireless market place.
In survey after survey, consumers report frustration and dissatisfaction with their wireless carrier. Consumers report difficulty comparing cell phone plans because information on terms, pricing and service is not presented in a uniform manner. Carriers often fail to clearly disclose the true cost of their plans, adding on various surcharges to consumers' bills. Consumers lack meaningful information about service coverage before choosing a plan.
Consumer problems with cell phone carriers’ billing practices are the largest source of complaints filed with the FCC. Billing disputes include double billing, extra and unexplained fees, minutes charged to wrong months, and even more frustrating for consumers is the overall inability for customer service representatives to solve and or correct errors once they are identified. Moreover, consumers who are fed up with expensive service, add-on charges, and poor coverage are often locked into long-term contracts with hefty termination fees, typically as high as $240. Making matters worse, consumers often unknowingly extend the length of their contracts when they buy a new phone or alter the number of minutes on their calling plans.
The Solution
To address these problems, cell phone users need a bill of rights— they need better disclosure regarding rates and fees, contract terms, and wireless coverage area; recourse to resolve billing disputes and errors; and less restrictive contract terms like a risk-free trial period to test a phone and service and the elimination of long term contracts. Specifically, “An Act to Establish a Cell Phone Users’ Bill Of Rights” includes:
Better disclosure:
- All wireless contracts and marketing materials must clearly spell out the terms of the contract in an easy-to-read, standardized format so consumers can compare costs. The disclosures must be made available and accessible to consumers comparing prices and services.
- All providers must provide consumers with coverage maps that are as accurate as current technology would allow. These maps must be available on the provider's Internet site as well.
Billing:
- Cell phone bills must be clearly organized. All mandated government taxes, surcharges and fees required to be collected from consumers and to be remitted to federal, state, or local governments would be listed in a separate section of the bill and clearly itemized. This section of the bill may not include any charges for which the carrier is not required to remit to the government.
- Roaming calls must be itemized on the bill within 60 days of the call, and identify the date and location of the call.
- Charges from theft that arise after reported to the carrier may not be charged to the consumer as long as the consumer promptly reported the theft to the service provider.
- Consumers will be able to file billing disputes with the state utility commission and providers should not treat the disputed portion of the bill as late or terminate the contract or service for non-payment if the billing dispute complaint is pending with the state.
Service Quality:
- The DTE (Department of Telecommunications) would monitor service quality. Data should be collected and made publicly available so consumers can compare signal strength, dropped call counts and dead zones across carriers.
Service Contracts:
- Consumers would have a trial period during which a customer can cancel any new service contract without having to pay the hefty contract termination fee ($175-300). This gives consumer time to see whether the phone works where and how it was promised. Consumers would have 30 days to cancel after having received their first bill.
- Carriers can not extend a customer's contract without obtaining a customer's written permission. Currently, many consumers do not realize that they are extending their contracts by upgrading their phones or by increasing or decreasing the minutes in their plans.
- No contract for wireless telephone service can be longer than twelve months.
- Any material changes that the carrier makes to the contract must be provided to customers in advance, and customers would have a 30 day opportunity to terminate the contract without penalty and to receive a pro-rated refund of the charges they paid for purchasing a phone for the carrier's network.
Consumer Privacy:
- Carriers must obtain customers express permission
prior to making cell phone numbers public. They may not charge a fee for
keeping the number private.