U.S. PIRG Consumer Blog: FCC Playing Around With Consumer Cell Phone Rights

The FCC, in its continued quest to serve the powerful telecommunications industry at the expense of consumers, has two critical decision items before it. First, it has proposed a rule that would limit state oversight of cell phone billing practices. Second, it is considering a petition by the industry asking that the FCC declare that its punitive Early Termination Fees (ETFs) of $170 or more are "rates," not penalties. The industry goal? Of course, get out from under pesky state laws. The State PIRGs and other consumer advocates are actively opposing both anti-consumer proposals.

The proposed rule “tentatively concludes�? that states are preempted from regulating cell phone companies’ billing practices, based on the specious claim that bills affect rates and states cannot regulate rates. We have filed joint comments and reply comments opposing this rule along with Consumers Union, AARP, the National Consumer Law Center, the Asian Law Caucus, and Disability Rights Advocates. The cell phone companies, of course, argued that states were preempted, and they also claimed that consumers were satisfied with the industry.

We have also filed joint comments -- along with Consumers Union and the National Consumer Law Center -- opposing the treatment of ETFs as rates, not penalties. ETFs are clearly designed to function as penalties-- the threat of paying such a high penalty to switch keeps consumers from shopping around and allows the oligopoly at the top of the cell phone heap (just four companies control 80% of the market) to keep their shoddy service without improving it, which they'd need to do if consumers could afford to vote with their feet.