Reader Forum: Beyond bill shock: The world after FCC regs

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Mobile “bill shock” has been all over the news, starting as early as 2009. A perfect example of this phenomenon is a recent case, reported by CNET, concerning an active duty military officer who was unknowingly charged outside the parameters of the unlimited plan while serving in Afghanistan. Recently, the problem has become a pointed issue in the media, causing the FCC to stand up and take notice. The commission has reported that about 30 million Americans (an estimated one in six mobile users) have experienced some form of bill shock, according to study conducted by the agency. Through proposed FCC regulations, subscribers will have additional protections established in an effort to mitigate cases of bill shock.
Within the industry, operators and vendors recognize that it is in the best interests of all parties to avoid bill shock—not only does it bring unhappy customers and bad PR, it’s ultimately bad for the bottom line. Now more than ever, it’s important for operators to establish and retain loyal subscribers in this increasingly competitive market. While bill shock is not always the fault of the operator, ultimately, these instances of sky-high unexpected mobile charges hurt everyone.
Along with operator initiatives to prevent bill shock, subscribers are also responsible for understanding the terms and limits of their service contracts. In this regard, the FCC’s proposed rules will provide a balance for both operators and subscribers. This includes placing alert notification responsibilities on service providers to ensure subscribers become aware when they meet or exceed wireless plan limits. Subscribers will also have additional tools to more effectively manage usage and adjust plans accordingly.
These new rules were modified from the current European Union (EU) regulations, where bill shock issues reached a tipping point in May of 2010. The EU regulations require operators to place a cap on roaming overages, and subscribers now receive alerts to charges and are notified that they have met or exceeded their plan ceiling before Internet connections are blocked.
While bill shock has not been treated as an epidemic, it’s certainly on the rise, and the technology is available for operators to monitor real-time subscriber usage and act on it. Now, providers can easily interact with subscribers via voice, SMS, email or secure websites regarding their plans and usage caps. These types of flexible notifications can also offer options for subscriber next steps, including purchasing temporary increases in data or voice minutes. This is where policy and charging play a behind-the-scenes role.
Issues with bill shock typically boil down to control and knowledge; subscribers need to be aware of what their usage means for their bills, and have the ability to exercise control over their accounts. Luckily, it seems that the FCC, wireless providers and subscribers are in alignment on this, and the tools and incentives are available to make these proposed rules a reality.
So what’s on the horizon for mitigating bill shock? The tools required to quell this challenge already exist in the form of policy and charging software. However, until the recent FCC proposal, the incentive and strategies haven’t been in the spotlight. Now that operators are obligated to help stop bill shock, and customers are more aware of it than ever, policy and charging can be deployed on carrier networks to actively engage with subscribers regarding their usage.
Ultimately, this results in operators being able to regulate usage and apply it to create new revenue streams, such as selling an add-on roaming service pass, or enabling a subscriber to extend spending or usage limits.. For subscribers, this means more accountability for awareness of their plans, and real-time control over their spending. For example, if a subscriber is about to exceed his or her bandwidth cap, the operator can notify that person with applicable options. These options may include ceasing data usage altogether, purchasing an additional package for a set price or putting incremental charging limits in place for pre- and post-paid subscribers.
The one-two punch of policy and charging is key to achieving effective subscriber monetization and blanket transparency. Without policy, the network cannot dynamically act upon subscriber usage and data plan quotas. Without charging, operators cannot accurately charge for usage against plans and policy-based decisions. To truly end bill shock, policy and charging need to work hand-in-hand on operator networks.
So what will the world look like, once it is rid of bill shock? For one thing, there will no longer be sensational news stories on the subject. For another, all subscribers will be better informed of their plans and usage, and operators will no longer be held accountable for large bills, because subscribers will have had control over their spending every step of the way. Operators will be able to more accurately cater to subscriber interests based on usage, changes or add ons to the plans and newly available services. Subscribers, in turn, will begin to revive the concept of loyalty to their carriers—the holy grail for mobile operators.
This move is particularly timely as smart phones get smarter, tablets proliferate the market and the concept of subscribers carrying their lives in their pockets becomes a fact of life and not a future prediction. More devices equal more opportunity for profit, but also more chances for subscribers to become disgruntled about bills, services and network performance. Operators need to run a tight ship to ensure that devices, apps and services live up to their potential, and subscribers remain engaged and happy with their experiences.
As bill shock goes the way of the dodo, new challenges will emerge, and already are here the form of subscriber adoption of tiered services. However, with the right policies in place, network usage and cost will become more fair to individual subscribers and have less impact on groups of users. This furthers the one-to-one relationship and ensures that the actions of a few users do not disrupt the experiences of many.
One final prediction: bill shock will be a distant memory by the time 2012 rolls around, but the challenge of keeping subscribers informed and happy will remain long term. The sooner that operators embrace the powerful strategy of combined policy and charging, the sooner they will be able to cultivate a richer experience for, and a stronger relationship with, individual subscribers.
Manzo is the chief marketing officer at Openet.