Did We Say 5¢ a Minute? We Meant $5: Cell Companies Battle FCC “Bill Shock” Survey

One in six cell phone users report they have suffered large erratic increases in their monthly bills. Over 20% say the increase was more than $100.

by Matthew L. Schafer

On Thursday, the Wireless Association (CTIA) took its fight to a public stage, writing a blog in rebuttal to a recent Federal Communications Commission cell phone price gauging.  A May survey, sponsored in part by the FCC, found that one in six people experience a “sudden increase” in their monthly cell phone bill.  In response to the CTIA blog, the FCC fired back in a flurry of new media blitzkrieg with multiple posts to their own blog.

The current controversy stems from a May 2010 Public Notice released by the FCC.  In the notice, the FCC sought comment on the feasibility of increased transparency in billing, the amount of access consumers have to real-time account balances, and whether or not consumers are informed about the consequences of exceeding their plans’ limitations.

In its objection to the survey, the CTIA’s Christopher Gutman-McCabe said that the “survey completely disregards the evolution of the wireless marketplace and the broad array of plans available from wireless providers, such as unlimited calling or texting plans or buckets of minutes/texts that give consumers greater control over their wireless bills.”

Gutman-McCabe went on to argue that the survey’s questioning was overly vague and loaded.  He also argued that the number of respondents were disproportionately under the age of 18, “despite the survey instructions directing the termination of the interview and recording as ineligible if the respondent was under 18.”

In response to the CTIA blog, the FCC fired back in a flurry of new media blitzkrieg with multiple posts to their own blog.

The Gutman-McCabe post, full of emphatic bold text and italics, was dismissed by the FCC today.  In its blog post the FCC argued that the CTIA inaccurately interpreted the data.  Joel Gurin and John Horrigan of the FCC argued in the July 15th post that the CTIA’s arguments were based an “astounding misstatement.”  The specific misstatement, according to Gurin and Horrigan, was the CTIA suggestion that only 30% of respondents were over 18.

“It’s unfortunate that CTIA, which represents one of the country’s most innovative and productive industries, has decided that ignoring or distorting the facts is a better strategy than simply addressing wireless customers’ concerns,” Gurin and Horrigan wrote.  “This trade association apparently believes there’s nothing to worry about if 30 million Americans have gotten sudden increases on their cell-phone bills.”

The survey and ensuing public battle is yet another blow to the CTIA, which recently objected to the disclosure at the point of sale of the absorption levels of a phone’s radiation.  In its official comment to the FCC, which was filed “respectfully” as opposed to the sharp stance of the blog, said that “wireless customers are overwhelmingly satisfied with their wireless service” and that the FCC survey was flawed.

Despite the CTIA’s assertion that customers are “overwhelmingly satisfied,” a May 2010 poll finds otherwise.  While half of Version customers are very satisfied with their wireless plan, about a third or less of customers are satisfied with the services of CTIA members AT&T, T-Mobile, and Sprint/Nextel.  Indeed, one citizen who reported being over charged on a trip to Baltimore as a result of delayed billing said, “I can’t believe in 2010 that the information related to billing must take much longer than the few seconds.”

While the European Union instituted a wireless consumer protection policy, the only legislation currently introduced in the United States is a bill from Senator Amy Klobuchar [D-MN].  The FCC, however, appears to want to move on the issue.  In addition to their vehement defense of the survey, Chairman Genachowski appears on board with consumer protections.

“There is still more that can be done to help customers navigate what is sometimes a confusing marketplace,” he recently said.  “A simple and easy to understand mobile purchase and billing process will empower consumers to avoid bill shock and other unexpected fees.”

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About Matthew L. Schafer

Matthew L. Schafer graduated from the University of Illinois in 2009 with a Bachelor of Science in Media Studies. He later attended Louisiana State University’s Manship School of Mass Communication where he earned a Masters of Mass Communication and Georgetown University Law Center where he earned his J.D.
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2 Responses to Did We Say 5¢ a Minute? We Meant $5: Cell Companies Battle FCC “Bill Shock” Survey

  1. Pingback: Growing Pains: Cell Phone Manufacturers and Service Providers Face Battle On All Fronts | Lippmann Would Roll

  2. Pingback: Verizon to Pay Upwards of $50 million in Refunds, Clyburn Says Customers Deserve More than Refunds | Lippmann Would Roll

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