Consumer advocate, CTIA go head to head over billing practices

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WASHINGTON-Wireless bills need to be vastly improved so customers can understand them, argued a consumer advocate even as the wireless industry countered its billing practices are both legal and fair.

“There is certainly room for improvement, and I would say drastic room for improvement,” said Patrick Pearlman, deputy consumer advocate for the West Virginia Public Service Commission representing National Association of State Utility Consumer Advocates at the Federal Communications Commission’s Consumer Advisory Committee Meeting.

Pearlman was the point person who drafted a March petition filed by NASUCA with the FCC that would overhaul the way telecom carriers bill customers.

The wireless industry believes the petition is trying to fix a problem that doesn’t exist.

During the advisory committee meeting, Pearlman was joined by Michael Altschul, senior vice president and general counsel of the Cellular Telecommunications & Internet Association, in debating truth-in-billing practices.

During the debate, Altschul said, “NASUCA’s petition alleges that something is broken and needs to be fixed.”

Telecom carriers believe that customers want to have their bills separated out by charges they can monitor and control-like how many minutes they want in a bucket-and charges they cannot control, such as taxes and the cost of complying with government mandates, said Altschul.

“Consumers benefit by separating fixed from variable costs so they can get their price signals and adjust their consumption based on that pricing. My gas bill in Arlington, Va., has a fixed charge for the maintenance fees, which doesn’t change, and then a usage-based charge based on how much gas I consume so I am able to adjust my usage from month to month,” said Altschul. “The variable costs which are within the consumer’s control-the airtime-are provided in the kind of data that they can use to make decisions separately from fixed costs, which are really common for all carriers that do business in the same geographic area.”

Pearlman disagreed, saying he was not sold on the idea that customers benefit from paying for surcharges. He believes carriers should not separate out these charges but roll them into the rate they charge customers. “Recover your costs in your rates, not in separate surcharges,” he said.

Altschul said this would be difficult because there are more than 14,000 taxing jurisdictions that assess taxes that are not always constant, and government-mandate charges such as contributions to the Universal Service Fund often change.

While Pearlman argued that when carriers add these surcharges, customers are stuck in contracts they cannot break without penalty, Altschul said the churn rates do not bear that out.

“On a quarterly basis we do see winners and losers so consumers are doing something out there,” said Altschul.

The wireless industry ran into the wrath of NASUCA when it began charging for wireless local number portability even before the service was available. Altschul said carriers began assessing these charges when customers began receiving the benefits of wireline LNP.

The argument that “wireless carriers began charging for number portability before it was available to wireless consumers is not entirely correct. Wireless carriers-like all carriers-had to update their networks and start querying the number portability database when wireline carriers started providing number portability so it was impossible to call from a wireless phone to a wireline phone once those wireline phones had the ability to port without substantial upgrade. Moreover, due to a rule change for wireless carriers at the end of 2002, wireless carriers had to upgrade to participate in thousand-block pooling, something the FCC did to facilitate number conservation,” said Altschul. “The timing is not strange. It reflects the benefits that all consumers received from wireline portability, which began in 1999, and thousand-block pooling.”

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