FCC Agrees on Need to Sharpen Wireless Complaint Handling

Consumers are “mostly satisfied” with their wireless service, said GAO senior analyst Andrew Huddleston, citing its December report on consumer satisfaction and industry responsiveness and oversight by the FCC and state commissions. The GAO found 84 percent of survey subjects reporting satisfaction, he said. A third of respondents also reported dissatisfaction with billing, early termination fees and services. “ETFs are a big issue,” Huddleston said. Industry efforts to pro-rate ETFs and introduction of online tools that help users have ameliorated that resentment, as has industry’s 2003 adoption of a voluntary code of behavior in this area.

The FCC complaint process for wireless is unknown to most consumers, as is its mediation program for wireless, Huddleston said. The agency lacks goals and measures for its performance in handling wireless complaints, and does little in-depth analysis of that work, he said. Few agency rules address this area of FCC activity, the GAO analyst said.

On the state side, 33 of the 51 utility commissions receive and process wireless consumer complaints, the GAO report said. Of commissions active in handling complaints, about a third have rules for that work, the report said. “The regulatory authority here is unclear,” Huddleston said. “Federal law says that states can regulate terms and conditions, but FCC guidance in this area is limited and unresolved.”

States communicate infrequently with the FCC about consumer complaints, a gap that deprives the federal agency of potentially valuable information, Huddleston said. The FCC should do a better job of informing consumers in defining its goals for wireless consumer protection and define not only the outlines of federal and state authority but also policies for communicating with states, he said.

The FCC feels the GAO report was accurate and helpful, said Gurin, who became bureau chief Dec. 9, when the GAO report came out. “The GAO report helped us focus on both known and new areas that need attention,” he said. “We agree that we need to coordinate better with the states.”

One reform already under way is a “complete overhaul” of the agency’s website into a more interactive consumer tool, Gurin said. “We have a separate site -- reboot.fcc.gov -- at which we invite comments to help us do a better job.” The agency also is retooling its publications and media program and enlisting its consumer advisory committee in this effort, Gurin said.

Agreeing the FCC needs more sharply defined goals and measures in regard to wireless complaint handling, Gurin said the process demands care: “I'm not sure how we could mediate every complaint.” The agency does use patterns of complaint to drive policy, he added. The commission wants to sharpen definitions of federal and state authority and improve communication with states, he said.

Gurin emphasized the FCC’s interest in obtaining clarity on ETFs: How they work, the rationales behind them, the mechanisms companies employ in prorating the charges and the daunting task of company-to-company and device-to-device comparison of the fees. He said he expects that to be one focus of a new FCC consumer task force he’s chairing.

GAO rigor in analyzing FCC shortfalls on communication was lauded by Nebraska Public Service Commission Chair Ann Boyle. “People don’t know who to call,” she said. “We need to get the word out.” Boyle proposed to Gurin that her commission and any others that are willing work with the FCC do so to analyze and act on wireless complaints to the federal agency. “How about if you send complaints from Nebraska to us?” she said. “We'll follow them up and analyze the results. We can handle and resolve them. I invite you to consider our states and others as an experiment.”

Consumers are “terribly confused” over billing and ETFs, Boyle said. “No other industry looks to contracts to provide services the way wireless does,” she said. “Water, electric, gas -- none of them do this.” She challenged CTIA members to simplify their sales approach for service and devices. “Make it simple,” Boyle said. “Now it’s a matter of gamesmanship. We need to know the cost of service. No one knows what they're buying. The companies say that ETFs are the cost of service, but that cost is unknown.”

CTIA Vice President for External and State Affairs Dane Snowden stressed the high levels of satisfaction registered among wireless customers. “The FCC is good at finding the balance between violations of law and people who are unhappy that their teenaged son has run up so many minutes of user time,” he said. At 12 percent of the FCC’s complaint load, wireless is securely in third place behind wireline, accounting for 60 percent of complaints to the FCC, and cable, at 27 percent, he said.

Wireless contract ETFs benefit consumers by spreading the cost of a new device over the life of a contract, Snowden said. He said 94 percent of ETFs are now prorated: “We want to work with the FCC, with the states, with the attorneys general.”

Snowden defended CTIA’s push to have wireless complaints handled by state attorneys general as following a state trend. He said 31 state legislatures have told utility commissions not to pursue wireless complaints. Boyle retorted that for most state attorney’s general, the $100-to- $300 value of the average wireless complaint is far too low to spur energetic action. “Utility commissions could do this efficiently,” she said. “Legislators aren’t as informed as we are.”

Boyle predicted a Carterphone-like phenomenon awaits the wireless industry, with interoperable, ETF-less phones standing in for the chance to buy one’s household telephones. She likened wireless companies’ current stance “to Bells trying to hold onto their business” in the waning days of monopoly telephony.

The FCC’s goal is to have a competitive marketplace that operates without confusion, Gurin said. “We want phone subsidies to be understandable in clear terms, and we want it to be clear what happens when there’s no subsidy,” he said. “The goal is easy comparability of ETFs and interoperability of phones.”