CTIA UNVEILS VOLUNTARY CONSUMER CODE OF CONDUCT

“Maybe we can keep the California regulators off your back and maybe we can encourage other industries to follow your model,” Tauzin said, referring to the Cal. PUC’s proposed consumer bill of rights, which wireless carriers have said would impose another costly layer of regulations on them. At CTIA’s annual show earlier this year, he encouraged the industry to come up with voluntary best practices on service quality to stave off state regulatory attempts. “The wireless industry is the best example of deregulation working for consumers in the telephone industry,” Tauzin said. He said he was a “little dismayed” when states such as Cal. attempted to regulate in that area.

Tauzin said it was “discouraging” to see some regulators zero in on rules for a sector that “shows how the forbearance of regulators works to the advantage of consumers.” He said his advice to Cal. policymakers and some federal regulators was that “if you really want something to regulate, try energy. Leave telecommunications alone as much as you can.”

The guidelines didn’t appear to address all concerns of consumer groups and state regulators that had raised concerns that the code lacked important details.

Consumers Union (CU) blasted the voluntary guidelines, saying they were too vague to provide meaningful help to consumers. “Instead of taking concrete steps to ensure that consumers receive quality service at a reasonable price, cellphone companies offer a two-and-a-half page set of vague promises that can’t be enforced,” said Janee Briesemeister, senior policy analyst for CU. CU said the proposal represented an effort to head off efforts by PUCs to create consumer cellphone service protections. CU cited the Cal. PUC’s telecom “Consumer Bill of Rights” that’s set for a vote this month. CU has backed the Cal. proposal, while wireless carriers have opposed many of its provisions, in part because they say they would create another significant layer of bureaucracy on their service provisions.

NARUC Pres. Stan Wise, who is a Ga. PSC commissioner, commended the industry for the “significant step” of undertaking the code. But he said NARUC still didn’t support the consumer code in its current form. While it was a “good first step,” he said, “much, however, remains to be done to ensure that the needs of wireless consumers are met.” NARUC reiterated that it would like wireless best practices aspects of 2 resolutions adopted at its summer meetings in Denver to be part of the code. It said language should be added, including that providers not be able to “pad” fees they collected for items such as E911. Carriers should be required to show how they used such charges, NARUC said.

Sen. Schumer (D-N.Y.), who has sponsored legislation for cellphone service quality, called the code a “good public relations gambit.” He said: “It doesn’t really get to the heart of the problems that plague cellphone consumers.” He said the code was voluntary and it didn’t address “the one issue that cellphone users are most upset about -- cellphone portability.”

Wireless CEOs, top brass at the FCC, NTIA and others lauded the voluntary code. FCC Chmn. Powell commended CTIA’s effort “to standardize industry practices of providing consumers information about wireless service plans. The proper functioning of a highly competitive market -- which the wireless market has proven to be -- depends on consumers’ having accurate and meaningful information at all stages of the customer relationship with the provider.” Comr. Abernathy said the code would “allow customers to walk away from a service provider for any reason during the first 14 days of service.” She said it includes coverage maps and pricing information. “At the end of the day, the industry’s willingness to adopt a voluntary code of conduct avoids the need for costly regulatory oversight while delivering greater value to wireless customers,” Abernathy said.

“We will be very interested in monitoring the wireless industry’s efforts to meet this new standard of performance,” said Acting NTIA Dir. Michael Gallagher. “I commend CTIA and the companies who have adopted the consumer code for the step forward they take.”

N.Y. State Assemblyman Richard Brodsky, chmn. of the committee on corporations, authorities and commissions, called the code a key step that shouldn’t be minimized, but said: “It is by no means the end of the process. There is more work to be done. We expect that we will work to do that,” without elaborating on areas that needed improvement. In terms of enforcement, Brodksy said there should be a continued govt. presence in the legal and policy determinations that remained to be made, although the code would be part of future developments in that area.

“Today the consumer has been heard,” the FCC’s Snowden said. “The principles, disclosures and practices this code articulates is a positive start for the American consumer to have the information they need to understand the products and services the wireless industry provides. This code will allow the American consumer to make informed buying decisions.”

The proposed guidelines had circulated widely before the CTIA news conference. The Cellular Carriers Assn. of Cal. last month outlined the industry-devised standards in comments to the PUC (CD Sept 5 p9) on the state’s “bill of rights” proposal. As previously reported, the code would have carriers agree to: (1) Disclose rates and terms of service to consumers, including a plan’s calling area, monthly access fee, early termination fees. (2) Make coverage maps available. (3) Provide contract terms to customers and confirm service changes. (4) Offer a 14-day trial period for new service. (5) Provide specific disclosures in ads on key terms of services, covering areas such as whether different fees applied to calls outside a carrier’s network. (6) Draw a distinction between charges that were taxes and fees that carriers had been ordered to collect, compared with those a carrier levied to recover a cost of doing business. (7) Give customers a right to terminate service for changes in contract terms. (8) Provide ready access to customer service, including a toll-free number. (9) Make prompt responses to customer inquiries and complaints received from govt. agencies. Carriers would respond within 30 days of receiving written customer complaints from a state or federal agency. (10) Abide by policies for protection of customer privacy

“The industry must now look to itself to shoulder new responsibilities under a new model,” Wheeler said. Carriers adopting the code include Cingular, AT&T Wireless, Sprint PCS, Nextel, Alltel, Verizon Wireless, Western Wireless, Qwest, T-Mobile USA, Dobson Communications, First Cellular of Southern Ill. “With fierce competition comes collective responsibility,” Wheeler said.