That a freshman U.S. senator is the lead co-sponsor of a wireless consumer-protection bill normally would not be reason for alarm by the wireless industry.
But this is Amy Klobuchar, a Democrat from Minnesota who already has proven to be a formidable force on high-profile consumer bills to improve toy and swimming-pool safety. Now she wants to take on the cellular industry, joined by Sen. Jay Rockefeller (D-W.V.) on a bill to safeguard cellular subscribers insofar as contracts, early-termination fees, billing, service quality and more.
The mere introduction of the Klobuchar-Rockefeller bill last September and a subsequent Senate Commerce Committee hearing stirred the industry into action. Sort of. AT&T Mobility, Sprint Nextel Corp. and T-Mobile USA Inc. announced last year they would follow Verizon Wireless’ lead and pro-rate early termination fees in 2008. Not seeing any follow-through to date, Klobuchar recently wrote executives of the three cellular carriers to inquire about their intentions. AT&T Mobility and Sprint Nextel replied they would try to implement pro-rated ETF policies as soon as possible. T-Mobile USA informed Klobuchar’s staff that a reply is forthcoming.
An angry public?
“That all gives me reason to believe we have a cause to keep pushing,” Klobuchar said in an interview with RCR Wireless News. “Yes, this is an election year, but this is one of these issues that the public is really angry about, so sometimes that helps when it’s an election year.”
Klobuchar said she wants to work with another big consumer advocate, House telecom subcommittee Chairman Edward Markey (DMass.), to get a bill through Congress to better safeguard wireless subscribers.
The cellphone industry has not embraced the Markey draft bill or the Klobuchar-Rockefeller legislation in large part because the measures would not eviscerate state regulation of terms and conditions of cellular service. A 1993 law outlawed state regulation of rates and market entry, but allowed states to oversee other areas of wireless service. As such, carriers prefer the national framework in a bill penned by Sen. Mark Pryor (D-Ark.), who wants state regulators completely out of the picture. The push for expanded federal pre-emption has divided state regulators around the country.
“No, I see more of a need [for the bill] because since we’ve introduced it I’ve had so many citizens and consumers come up to me with their own cellphone story, because everyone has a cellphone story,” Klobuchar said. “A lot of them are about fees, but many are about dropped calls.
Mobile-phone operators say they’ve gotten the message and insist heavy-handed federal legislation is not needed. They point out the industry currently adheres to a voluntary code of conduct-a best practices manifesto of sorts.
To this, Klobuchar replies: “Well then I would say, ‘You must not mind that our bill passes’. If you’re doing it [customer protection] anyway, why would you care if it was mandated for other carriers?”
A recent report by the Government Accountability Office on lingering deficiencies in how the Federal Communications Commission processes consumer complaints could bolster Klobuchar’s and Markey’s legislative initiatives, while possibly undercutting industry’s push for broader federal preemption.
FCC enforcement lax?
“I know what they [cellular carriers] want, but the issue there is that the GAO report demonstrates the FCC hasn’t shown they’re up to the job of enforcement,” said Klobuchar. She added that “consumers in many instances are getting ripped off under the current system.” Klobuchar noted that other industries – including those in the telecom sector – have federal consumer-protection rules with state enforcement.
The cellular industry is not apt to get any help from the FCC on the pre-emption front, given the Supreme Court’s decision not to review an 11th U.S. Circuit Court of Appeals ruling that overturned a commission decision pre-empting states from regulating line items on monthly mobile-phone bills.
The Klobuchar-Rockefeller bill would not pre-empt state laws that provide additional protections to wireless subscribers.
“Again I point to that GAO report that found many shortcomings with the FCC’s consumer complaint procedure, and I think that’s going to be a powerful argument for us to use to say that we need some supplementary enforcement at the state level,” she stated.
And just how does Klobuchar feel about going up against the $120 billion cellphone industry? She couches her answer in populist terms, riding the wave of growing alarm among Democrats and Republicans alike about the safety of consumer products across the board.
“There’s no doubt they’re a powerful lobby. You see evidence of it all the time, but I’m always optimistic,” Klobuchar stated. “No one thought we could pass this pool-safety bill that’s been sitting around, and we got it done. Lots of people thought the toy bill wouldn’t get through the United States Senate, and it did. I think we’re living at a time where middle-class people, they’ve been treated unfairly in the marketplace, so there’s a renewed interest in pro-consumer legislation.”
The political scenario for the wireless industry could become even more daunting if the Democratic-controlled Congress puts one of their own in the White House this November.
Klobuchar said her wireless consumer bill is reasonable and less stringent than an earlier version. “While they [carriers] have done many good things to advance new technology in our country, they have to acknowledge that there are some things done to consumers that have simply been unreasonable, and people are sick and tired of it. I’m hoping they will be willing to work with Chairman Markey and me to actually get something done that is pro-consumer,” she said. “They’ can’t keep gambling with people’s early-termination fees.”
