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FCC bids to curb 'bill shock and mystery fees'

'Wireless subs, we've got your back'

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On Thursday, the US Federal Communications Commission will detail a set of proposed rules that will require wireless carriers to notify users when their monthly voice and data plans are nearing their limit.

"Consumers must know that the FCC's got their back," Commission chairman Julius Genachowski said in a Wednesday speech at the Center for American Progress in Washington, DC.

In addition to the rules designed to prevent unanticipated overages — what Genachowski referred to as "bill shock" — the FCC also plans to tackle "mystery fees" such as those that Verizon recently agreed to refund to the tune of $30m to $90m, and to require "clear and simple disclosure" of early termination fees.

"Bill shock occurs when consumers see their bills jump unexpectedly by tens, hundreds, or thousands of dollars from one month to the next," Genachowski told his audience. "Common cases are when a subscriber is charged for unknowingly exceeding his or her allotments for voice, text or data, or gets hit with roaming charges that are unexpected."

The FCC chairman gave three examples of bill-shock cases that had been brought to his attention:

  • One woman received a $30,000 bill when visiting her sister after the earthquake in Haiti, although her wireless provider had said that those affected by the disaster would receive a "courtesy plan."
  • A man who testified at the Center for American Progress event was hit by a $18,000 bill after his free data downloads expired without warning.
  • A tech exec was socked with $2,000 in extra data charges while overseas, despite buying an "international plan" — an amount the exec said was more than 15 times what he expected to pay.

Genachowski also noted that an FCC survey had determined that 30 million US wireless customers had experienced some degree of bill shock. That's one in six mobile subscribers, according to the FCC boss.

The protections that the FCC will seek simply require service providers to send their customers text or voice alerts when they're approaching their plan limits, or when they're about to incur roaming charges.

"Most people don't know what a megabyte is," Genachowski said. "But they do understand when they get an alert telling them they're about to go over their limit and incur additional fees." These safeguards, he noted, are common in other countries.

Citing the well-known video of one unfortunate iPhone owner and her 300-page AT&T bill, Genachowski also spoke out against mystery fees. "In an era where 300-page bills are within the realm of possibility," he said, "it's hard to keep track of everything you're being charged and too easy to find yourself paying more than you had planned on.

"At the FCC, we've received a growing number of reports of 'mystery fees' popping up on bills that subscribers weren't aware of and that, in a number of cases, were unauthorized."

In Genachowski's opinion, consumers deserve "straight bills and straight answers when they question them." He announced that the FCC would hold a public forum on mystery fees, saying: "I look forward to hearing from consumers and consumer groups, industry representatives, and technology experts."

One of those industry representatives has already weighed in on the FCC's ideas — and, as you might assume, he's not happy about them. Christopher Guttman-McCabe, VP of the wireless trade group CTIA told the Associated Press that he was concerned about "prescriptive and costly rules that limit the creative offerings and competitive nature of the industry."

Guttman-McCabe just missed the trifecta. Although he mentioned two key buzzwords — "creative" and "competitive" — he forgot the most potent incantation of this US election season: "jobs".

Fear not: that magic word will undoubtedly be intoned ad nauseam by wireless reps at the FCC's upcoming hearings. ®

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