WASHINGTON-The Federal Communications Commission, having recently declared that state courts are not pre-empted by federal law from awarding monetary damages in wireless consumer fraud lawsuits, has now been asked to rule whether the common mobile phone billing practice of rounding violates the Communications Act.
The issue, which arises from a class action lawsuit against GTE Corp. (now Verizon Communications), adds to a growing number of areas where mobile phone firms are finding they have legal exposure. In addition to consumer fraud lawsuits, mobile phone carriers and manufacturers are facing suits stemming from health fears, radio-frequency interference and driver distraction.
The plaintiffs in the GTE case, which is currently pending in a federal court in Florida, have asked the FCC to rule whether certain wireless billing practices are unjust and unreasonable under the Communications Act.
The industry practices at issue include charging customers for dead air time; charging for unanswered or unconnected calls; measuring the time of a call from the time the `send’ button is pushed; and rounding up any of the above charges to the next minute.
Public comments and replies are due Oct. 20 and Nov. 6, respectively.
“It’s (the legality of rounding) already been answered in Southwestern Bell where the FCC said these practices do not violate the Communications Act,” said Michael Altschul, vice president and general counsel for the Cellular Telecommunications Industry Association.
The FCC ruled last year that rounding up wireless charges to the next minute (a longtime, common practice in long distance billing that’s approved by federal regulators) did not in itself run afoul of the Communications Act.
But the agency also said “that if a carrier employs unreasonable practices, the carrier may be found in violation of the Communications Act, even if the rates and rate structures themselves are not unreasonable.”
The FCC in August, responding to a petition from the Wireless Consumers Alliance, dealt the cellular phone industry a major defeat by ruling that a 1993 law, which banned states from wireless rate and entry regulation, does not generally pre-empt the award of monetary damages by state courts based on state consumer protection, tort or contract claims.
“Obviously, I think the practice on non-disclosure concerning wireless billing practices is unfair to consumers and is a violation of the Communications Act,” said Carl Hilliard, president of the WCA.
