In an attempt to thwart more-intrusive government regulation, the cellular phone industry recently adopted a series of voluntary measures to protect its customers.
Under the Consumer Code (PDF) released by industry trade group Cellular Telecommunications & Internet Association, 22 carriers, including all major wireless operators and a handful of rural companies, have pledged to be more forthcoming with customers about the service they offer and how much it costs.
The code, which is purely voluntary, asks carriers to "clearly" disclose rates and services, and provide accurate maps of where they offer service. The code also calls for confirmation of services that customers receive, and for any changes made to services and rates. The code also includes a 14-day waiting period for customers to test and return services if they choose.
There are 150 million wireless subscribers in the United States, and all would benefit from the proposed rules, CTIA said.
"Now that 98 percent of Americans can choose among three or more wireless providers, there is clearly no competitive void to fill," said CTIA president Tom Wheeler. "With fierce competition comes new responsibility. That responsibility is to ensure consumers have information that allows them to make the appropriate competitive decision and that that information is clear and readily available."
The guidelines, which the industry crafted over the past year, is a response to a similar, but more stringent proposal made by the California Public Utilities Commission. On Sept. 18, the California PUC will vote on a so-called telecommunications bill of rights that would force telephone companies in the state to provide timely and consistent service, even to customers who are late paying their bills.
The proposed law, the first of its kind in the country, would require all phone companies, including wireless, local and long distance, to disclose key rates, contract terms, conditions and prices clearly on all printed material, advertising and websites "in the equivalent of 10-point type or larger." Companies also would have to provide 24-hour, 7-day-a-week support hotlines with live operators.
In addition, customers would be given 45 days to cancel contracts without penalty. And, in the part of the bill that the industry may dispute most, companies would not be able to tack on late fees to bills in dispute. And those offering basic telephone service would have to continue providing it even when customers don't pay their bills in full.
The PUC originally drafted the bill in response to the volume of customer complaints it received regarding phone companies. Two years ago, 31,345 California residents filed grievances with the state. Most of the complaints -- 57 percent of them -- stemmed from billing disputes; the rest concerned services and customer support.
PUC Commissioner Carl Wood, who has pushed heavily for the rules, but was not immediately available for comment, has told Wired News in the past that he expects the bill to pass. Arizona and New Mexico lawmakers are considering similar proposals, according to San Francisco public policy think tank Pacific Research Institute, which is against the bills.
"Self-regulatory regimes and regimes that can change to quickly fit the marketplace is better than rules that come with bureaucracies that are difficult to change in the marketplace," said Pacific Research Institute director Sonia Arrison. "We have so much competition right now there is no way that government can make better choices in this market area."
CTIA pointed out that most California complaints were between customers and wired-line carriers. "This is not to take a shot at our wired-line friends, but rather to state that a highly regulated industry has a higher level of complaints than an unregulated wireless industry," Wheeler said.
Moreover, the California proposal would add $6 to $12 a month to the average consumer bill because of additional paperwork and workers that carriers would need to hire to comply with the legislation, Wheeler said.
Still, consumer advocates are not moved. They pointed out that there's no one to enforce CTIA's new rules since they are purely voluntary. They also questioned the ambiguous tone of the Consumer Code -- what exactly does the industry consider "clear" disclosure of rate plans and services?
The California Small Business Association complained that CTIA did not invite the group to help draft the rules even though it was one of the more vocal groups for the California telecom bill of rights. Association president Betty Jo Toccoli said some of the group's members were charged for services they did not request and were unable to dispute the charges because of almost nonexistent customer service.
"There are places where regulation is needed and telecom is one of them," Toccoli said. "Residential and small commercial firms cannot represent themselves. It is a very technical industry and it's hard to know the ins and outs. We need someone with expertise to regulate these companies."
