“FCC probing cell phone billing practices”

FCC probing cell phone billing practices

Posted: 13 Oct 2010 01:07 AM PDT

The Federal Communications Commission said Tuesday it is conducting an industry-wide investigation into cell phone billing practices amid complaints by customers of Verizon Wireless and other carriers of unwanted data charges.

The agency's 10-month-long investigation, which it previously said was focused on Verizon, could subject other carriers to penalties if the FCC finds those firms charged "mystery fees" that violate its "truth and billing" guidelines. The agency didn't disclose the names of other carriers that are being probed. It also didn't say how many providers the FCC is looking at and at what stages those investigations are at. An AT&T spokeswoman wrote in an e-mail that the company is unaware of an investigation into its practices. A Sprint Nextel spokesman said the company doesn't generally comment on investigative matters at the FCC.

update with quote at 11:23 a.m.: "It's routine for the FCC to look into consumer complaints including those involving billing practices," said FCC spokeswoman Jen Howard.

The investigation comes amid an effort by the FCC to step up its protection of consumers who are increasingly complaining of baffling charges on their cell phone and broadband Internet bills. FCC Chairman Julius Genachowski plans to announce a proposal on Wednesday aimed at preventing "bill shock," or surprises on cell phone bills from overcharges and roaming fees.

"Companies should compete on value, price and service, not customers confusion," Genachowski said in prepared remarks to be delivered at in a speech Wednesday at the Center for American Progress.

Verizon admitted last week that it had charged 15 million subscribers more than $50 million for data services those customers didn't sign up for. They were erroneously charged because of a software glitch and accidentally launching the Web browser on their phones. Verizon said it would provide refunds to those customers but the FCC said it would continue its investigation. In its fact sheet, the FCC said its investigation into mystery fees by Verizon and "other mobile providers" is part of a broader ambition to update truth and billing guidelines.

Genachowski will outline a proposal that forces carriers to warn users when they are close to reaching voice, text and data limits or about to incur international or other roaming charges. Carriers will be required to alert users through text messages and voice alerts when they are close to those limits. The proposal will be formally introduced at an FCC meeting Thursday and would eventually need a majority of votes from the five-member commission. That means if any rule is approved, it would not take effect until next year, experts say.

The FCC proposal will also ask carriers to weigh in on whether it should force usage caps that automatically cut off services when users reach their limits. Senator Tom Udall (D-N.M.) has introduced a bill that would automatically shut off services when limits are met unless a consumer volunteers to pay additional fees.

The wireless trade group CTIA has argued against the FCC's proposals. It says alerts could lead to confusion. The trade group said carriers have introduced new ways for subscribers to check how many voice minutes and much data they've used. In recent weeks, the cell phone industry has ramped up its opposition. Between Sept. 29 and Oct. 1, CTIA vice president of regulatory affairs, Chris Guttman-McCabe, and other executives met with the FCC's consumer affairs bureau chief, Joel Gurin, and staff for Commissioners Mignon Clyburn and Robert McDowell to argue against the "bill shock" plan. In exparte notices, the CTIA offiicials argued that carriers couldn't provide timely roaming charge alerts because real-time roaming data isn't available for carriers.

But consumer advocates say most consumers find usage information hard to obtain from their carriers. They said consumers need carriers to provide a better sense for how much data is consumed by activities such as watching videos, sending emails and surfing the Web.

Joel Kelsey, a policy analyst at Free Press, noted that the European Union already requires alerts for sudden increases in charges and when subscribers near their service limits. As Verizon, AT&T and other carriers move toward pay-as-you consume tiered pricing models over flat-rate plans, the FCC needs to require clear guidelines for carriers to supply information to users, he said.

"This is a just the starting gun for the FCC and there is still a lot that needs to be explained to see how effective this proposal can be," Kelsey said.

2010

By Cecilia Kang | October 13, 2010; 12:01 AM ET
Categories: AT&T, FCC, Sprint Nextel, T-Mobile, Verizon
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