By John Breyault, Vice President of Public Policy, Telecommunications and Fraud
The National Consumers League today announced our support for SB 3872, the “Cell Phone Bill Shock Act of 2010.” This legislation, introduced by Sen. Tom Udall (D-NM) would require wireless phone companies to provide alerts to their subscribers when they are in danger of running up high cell phone bills. In addition, the legislation would require carriers to get consent from subscribers before allowing use of wireless service that would incur overage fees. In an era of 300-page phone bills, automatic bill pay, bundled service packages, and tiered data plans, this legislation is a smart step forward for consumers and competition in the wireless industry.
Numerous studies by the Government Accountability Office, Federal Communications Commission, and Consumer Reports magazine have found that millions of consumers are experiencing “bill shock” — unexpected increases on their wireless bills. According to the FCC, 30 million consumers have experienced bill shock. These findings reinforce an earlier GAO study that found that 34 percent of wireless phone users have received unexpected charges on their bills.
It is for these reasons that NCL has been a leader in advocating for stronger “bill shock” protections. The wireless phone is increasingly a critical communications link for consumers. As FCC Chairman Genachowski discussed in a recent speech “[e]ven if many of these cases are resolved, something is clearly wrong with a system that makes it possible for consumers to run up big bills without knowing it.”
While some may argue that “bill shock” regulations are burdensome and unnecessary, we believe that a set of common-sense baseline protections represent a “win-win” opportunity. We agreed with Chairman Genachowski when he said that “[p]ro-consumer policies are pro-competition and pro-innovation.” Indeed, consistently giving consumers the information they need at the time when they can best use it is a way to increase consumers’ faith in their service providers.
Wireless devices present a world of possibility for consumers. These devices are miracles of modern innovation, and consumers have rightfully embraced them. However, there is a need for common sense “rules of the road” to ensure that consumers do not get taken advantage of by mystery fees and unexpected charges. It is for this reason that we support SB 3872 and look forward to working with Senator Udall and partners in Congress to move this pr-consumer legislation forward.