The wireless sector is likely to continue to be under increased scrutiny from government with the Federal Communications Commission releasing a survey that said one in six mobile users have experienced bill shock.
Earlier in the week, a group of congressmen said they are going to try to revise the Telecommunications Act of 1996, and 74 congressmen said they were concerned with the FCC’s plan to regulate broadband services.
CTIA President Steve Largent issued a strong statement on the FCC’s survey. “I am very troubled with the current direction the FCC is taking with respect to the wireless industry – from the messaging sent last week in the Mobile Competition Report to today’s survey release. It seems the Commission is going to attempt to micromanage what is an incredible array of choices for consumers. From prepaid to postpaid, subsidized handsets to unsubsidized, contracts with ETFs to those without, large, medium or small buckets of minutes and ‘all-you-can-use’ plans, consumers have an unbelievable range of choices. Contrary to the statements in the press release, the industry does provide ‘simple and easy to understand’ plans for every type of American consumer.”
The FCC survey said 30 million Americans have experienced bill shock, which it defines as a sudden increase in people’s monthly bills that isn’t caused by a change in service plans. “It also shows that nearly half of cell phone users who have plans with early termination fees (ETFs) — and almost two-thirds of home broadband users with ETFs — don’t know the amount of the fees they’re accountable for,” the agency said.
One-third of the people surveyed who said they experienced bill shock said their bills jumped by more than $50.
“The FCC’s consumer survey provides an important snapshot of the real-world experiences of mobile customers,” said FCC Chairman Julius Genachowski. “The wireless industry has achieved remarkable innovation — and mobile is increasingly essential to the daily lives of Americans. But there is still more that can be done to help customers navigate what is sometimes a confusing marketplace. A simple and easy to understand mobile purchase and billing process will empower consumers to avoid bill shock and other unexpected fees.”
Meanwhile, 74 congresssmen told Genachowski they have serious concerns about the way the FCC is trying to regulate broadband services, calling the agency’s proposal a distraction that could take away from broadband investment because of regulatory uncertainty. The policy makers ask the FCC not to move forward with its plan to regulate Internet pipe providers without congressional approval.
The four congressmen seeking to revisit the telecom act – Sen. John Kerry (D-Mass.), Rep. Henry Waxman (D-Calif.), Sen. Jay Rockefeller (D-W.Va.), and Rep. Rick Boucher (D-Va.) – are said to favor the FCC’s regulatory proposal for broadband services.
Underlying all of the commotion is questions about the nation’s broadband networks and whether there is enough competition in the marketplace, and whether the United States lags in broadband deployments compared to the rest of the world. While this primarily impacts wired broadband providers and the FCC and industry agree a light regulatory touch is best for wireless, the sector nonetheless likely will be impacted.
An April study from ID Insight and Successful.com found that the broadband competition at the county level suggests that often people can only choose between two broadband providers.
“Contrary to claims of those who feel the U.S. has ‘robust broadband competition,’ it may be that half of the states have a duopoly rather than true competitive markets. The only question for these states is how much of a market share the top two providers collectively command. In states such as Ohio and Nevada, where there is a 30+ percentage gap between the top two providers, some will argue this is a monopoly.
The other contention, that consumers and businesses have a wealth of options for providers (one industry executive estimated ‘everyone has at least four wireless carries, plus cable, satellite’ etc.), also has flaws. This is perhaps true when taking in the nation as a whole, but when analyzed at state and county levels, which is where in reality the selection of possible providers actually exists, there are far fewer choices,” the report stated. The report was authored by Craig Settles of Successful.com and Adam Elliot of ID Insight.
“There’s good news and there’s bad news,” Settles told RCR Wireless News. “The good news is that this issue of FCC authority is going to Congress. The bad news is, this issue is going to Congress where it could easily die the death of 1000 cuts. The best thing that could happen is Congress mandates the FCC, as a regulatory agency, has the authority to make whatever decisions it deems necessary to assure we get better broadband. The probable reality is that a bunch of people who wouldn’t know a byte if it bit them in the butt are going to try to tie the agency’s hands to the point eliminating their effectiveness.”