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October 15, 2010

FCC Explores Legislation to Prevent Cell Phone 'Bill Shock'

By Beecher Tuttle, TMCnet Contributor


The Federal Communications Commission proposed a new set of rules recently that would require mobile phone carriers to alert customers when they are about to reach their monthly usage limits.

FCC Chairman Julius Genachowski (News - Alert) began pushing the legislation after being made aware of hundreds of recent complaints regarding outlandish cell phone charges. In 20 percent of these grievances, monthly bills were over $1,000. Eight of these complaints were for more than $10,000, with the largest monthly statement reaching $68,505, according to a white paper released by the FCC (News - Alert) on Wednesday.

In May, the commission released a similar report indicating that at least 30 million Americans have experienced cell phone "bill shock in one form or another."

“People should be told that they’re risking extra fees before they incur them,” Genachowski said. “There are ways to prevent bill shocks easily and inexpensively, using technology widely available today.”

If the proposed rules are approved, companies like AT&T and Verizon Wireless (News - Alert) would be obligated to send text or voice alerts to customers who are nearing their data, text and voice limits. The legislation would also force telecom companies to let subscribers know when they are about to incur international and roaming charges, Bloomberg (News - Alert) News reports.

Furthermore, the measure would require that carriers make consumers aware of usage caps and other tools designed to prevent bill shock.

Meanwhile, the major players in the wireless industry have criticized the proposal, noting that many consumers already have warning systems at their disposal, but simply fail to utilize them.

Several Republicans, including FCC member Meredith Attwell Baker, have publicly opposed the bill due to the unintended costs that will accompany it, according to PC World.

"If we don't strike the right balance as regulators, we risk imposing costs on providers that could result in higher prices and lower quality of service for consumers," she said. "Upgrades to providers' billing systems may be expensive and burdensome for smaller providers and prepaid services and put them at a competitive disadvantage."

Republican member Robert McDowell (News - Alert) added that the 764 complaints seem rather small considering there are currently more than 295 million wireless subscribers in the U.S.


Beecher Tuttle is a TMCnet contributor. He has extensive experience writing and editing for print publications and online news websites. He has specialized in a variety of industries, including health care technology, politics and education. To read more of his articles, please visit his columnist page.

Edited by Tammy Wolf




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