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Bill Targets 'Deception' In Mobile Fees

By David Hatch

(Thursday, September 6) Two Democratic senators announced plans for consumer-friendly legislation aimed at eliminating what they see as exorbitant cellular telephone fees and arming consumers with more information about wireless coverage.

Sens. Amy Klobuchar of Minnesota and John (Jay) Rockefeller of West Virginia, members of the Senate Commerce Committee, plan to offer the measure in the next few days. Rockefeller said they have asked Senate Commerce Chairman Daniel Inouye, D-Hawaii, to hold a hearing on the issue.

Klobuchar and Rockefeller said their goal is to empower consumers to make better purchasing decisions and provide more transparency into the fees that appear on bills. Klobuchar said that even as a member of the powerful Commerce panel, which regulates the telecom industry, she does not understand the origins of some her mobile charges.

New regulations are needed, she and Rockefeller said, because the mobile industry has more than 200 million customers, many of whom rely exclusively on wireless handsets. The senators said they are particularly concerned about penalties assessed for ending cell contracts prematurely.

"Early-termination fees are budget busters to American families," Klobuchar said at a press briefing. The measure would cut the penalties at least in half, pro-rate them and give consumers a 30-day window to easily exit new contracts.

"We're dealing here with a lot of deception" and misleading information, Rockefeller said. "The reality here is that the FCC isn't moving. It's done nothing all these years."

The legislation also would arm consumers with more details about gaps in wireless coverage, including the locations of dead spots. The senators complained about areas in their respective states where cell calls are dropped and can't be made.

The bill comes after the FCC's vote this summer to restructure the wireless industry by imposing "open access" requirements on a large chunk of airwaves to be auctioned in January. As a result, devices and software unaffiliated with license holders could be used on the affected frequencies.

The senators would address a related matter by requiring the agency to compile a report on the practice of wireless companies "locking" handsets for proprietary use with carriers. The study would be submitted to Congress.

"We feel the bill is unnecessary and if enacted could lead to higher prices," responded Joe Farren, a spokesman for the wireless industry association CTIA. He said the senators ignored recent FCC data indicating that complaints about cell contracts are falling.

Klobuchar addressed that point at the briefing, noting that many customers don't report problems to the agency but instead turn to state regulators or remain silent.

Farren also noted that some carriers have voluntarily adopted several of the rules the senators seek to enact into law. "The competitive market is healthy and working perfectly fine," he said, adding, "I'm sure there are some folks dissatisfied, and frankly we want to get better."

The National Association of Regulatory Utility Commissioners, which helped craft the measure, applauded what it sees as an effort to add greater "transparency" to wireless industry practices.


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