Carriers, Public Interest Groups Clash on Need for Bill Shock Rules

New rules are needed, the public interest groups said. “Commenters urge the Commission to require wireless providers to supply automatic and free usage and roaming alerts to protect consumers from excessive increases in their monthly bills,” they said in a filing. “Additionally, the Commission should establish clear disclosure rules for the true cost of services, including additional fees; meaningful information about terms of service restrictions and actions that monitor and interfere with subscriber use of services; and obstacles to ending or transferring service including early termination fees and device locking mechanisms.”

The FCC survey “underscores the need for requirements on mobile providers to more explicitly provide usage data to consumers through alerts and other efforts before they receive their bill,” said the joint filing. It was signed by the Center for Media Justice, Chicago Media Action, Consumers Union, the Esperanza Peace and Justice Center, the Media Access Project, the Media Alliance, the Media Justice League, the Media Literacy Project, the National Alliance for Media Arts and Culture, the National Hispanic Media Coalition, the New America Foundation, People’s Production House, Public Knowledge and Reclaim the Media.

The Utility Consumers’ Action Network (UCAN) said incidents of bill shock are well documented. The group offered several real-world examples, including a Sprint Nextel subscriber who enrolled in the carrier’s Canada roaming, which costs $2.99 monthly plus $0.20 a phone call. When the consumer got back from the trip and got his next monthly bill, “he was shocked to find that he had incurred $2,388.78 in charges during the previous monthly billing cycle,” the group said. “The bill indicated that the customer had used 1,120,977 kB of international data roaming usage during his four day trip. … The bill indicated that the customer was charged $.002/kB, which is not an especially high rate. But, because the Sprint customer had allegedly used so much data, he incurred over $2,000 in international data roaming charges alone.” UCAN suggested several new rules. They include requiring carriers to send consumers a free text message detailing the roaming prices for voice, text, and data when a consumer enters a foreign market, saying consumers must be allowed to set monthly spending caps for their accounts and requiring carriers to send an alert when a subscriber reaches 80 percent of the cap.

CTIA countered by detailing information on the “array of tools” that carriers already provide subscribers to monitor accounts and minutes used. “CTIA urges the Federal Communications Commission not to regulate consumer tools for account management because it is unnecessary,” it said. “Carriers already provide these tools, the market is innovating to bring new tools, and carriers have incentives to meet customers’ needs in a competitive market.” Education is the key, CTIA said. “The Commission should work with wireless carriers to educate wireless consumers of their available options, and should not prescribe -- and ultimately limit -- carriers’ ability to provide effective consumer account management tools. These competitive initiatives are inherently more effective and responsive than any formal regulatory process.”

CTIA said in a footnote it’s perplexed by references in the inquiry to European Union regulations concerning bill shock. “The Commission’s attempt to justify the proposed initiatives by analogizing them to the EU international roaming alerts is difficult to comprehend because the international roaming issues in Europe are far from a factual predicate for the type of domestic regulation proposed in this Public Notice,” CTIA said. “The EU regulations at issue govern notifications of international roaming charges, or international termination tariffs, and do not provide any guidance on the excessively broad goal of instituting usage alerts and cut-off mechanisms for domestic data, text and voice.”

The Rural Cellular Association agreed with CTIA that bill shock should be addressed by individual carriers. “RCA members have adopted internal practices and procedures to remediate billing concerns directly with their customers,” RCA said. “Direct billing review and resolution is the most cost effective and cost efficient means for smaller and regional carriers to notify their customers about incurring additional costs on their monthly bill."

AT&T was among the carriers disputing a need for new rules. The company explained how it makes sure customers are not surprised when they get their bills. “Certainly, from AT&T’s perspective, there is no need for the Commission to impose mandates like those adopted in the European Union,” it said. “AT&T already provides customers with more and better disclosures than the EU rules require, and the imposition of mandates is likely to restrict providers from adopting innovative new practices that customers may prefer."

"As a competitor in the highly competitive wireless market, Verizon Wireless has every incentive to give consumers information about its services and consumers’ use of those services,” the company said. “Verizon Wireless provides extensive information to consumers about the terms and conditions of the services they offer as well as tools to help consumers manage their wireless services.” T-Mobile said a customer who suffers bill shock “is unlikely to stay for long with the company that provided the unwelcome surprise,” so carriers “regularly experiment with different methods of meeting their customers’ information demands based on available and emerging technology, customer demographics, and other factors.”