Consumer groups, states question telecom bill

An overlooked piece of a far-reaching broadband bill scheduled to be debated in a U.S. Senate committee this week would end state regulators’ power to mediate in consumer complaints about wireless phone service.

Several consumer groups and state attorneys general have protested the removal of state consumer protection powers in a recent draft of the Consumers’ Choice and Broadband Deployment Act, scheduled for amendment hearings in the Senate Commerce, Science and Transportation Committee Tuesday and Wednesday.

Net neutrality provisions remain a huge focus of debate surrounding the bill, which would also streamline franchising requirements for telecom carriers offering broadband television service in competition with cable TV. But the switch to a national consumer protection model for wireless services could hurt consumers, said representatives of the National Association of Regulatory Commissioners (NARUC).

The U.S. Federal Communications Commission (FCC) doesn’t have the resources to investigate and mediate thousands of complaints about wireless telephone service each year, said Tony Clark, a member of the North Dakota Public Service Commission and chairman of the NARUC telecom committee. States have long had the power to investigate consumer complaints about wireless service, NARUC notes.

The new provision “really takes states completely out of the playing field,” said Clark, a Republican. “This is way out of line to take an eraser to the chalkboard of any state consumer protection laws out there.”

But the Cellular Telecommunications and Internet Association (CTIA), a trade group representing wireless carriers, says a regime of dozens of slightly different state regulations hurts consumers by limiting the services and pricing plans carriers can offer.

States already have general consumer protection laws in place, and with one national consumer protection framework, carriers could spend less time making sure they comply with dozens of state laws, said John Walls, CTIA’s vice president for public affairs.

“We don’t think there should be no rules,” Walls said. “We think there should be consistent national rules.”

The FCC has the expertise to deal with consumer complaints, Walls added.

But groups such as the AARP, Consumers Union, and Consumer Federation of America, have called on the Senate committee to reject the recent change to the bill. The wireless industry has grown from 13 million subscribers in 1993 to nearly 200 million today, suggesting the current state regulations have not hindered its growth, said consumer groups in a letter to Congress.

Unfortunately, widespread unfair, misleading and deceptive business practices that adversely affect consumers have accompanied that growth,” said the June 20 letter, from Consumers Union, the Consumer Federation of America and two other groups. “The wireless industry leads the Better Business Bureau’s list of most complained-about industries, surpassing even car dealers in customer dissatisfaction.”

But the FCC reports that consumer complaints to it about wireless service declined from 6,873 in the third quarter of 2005 to 4,616 in the first quarter of this year. Drops in complaints show the wireless industry is listening to customers, Walls said. Customers “have been tremendous watchdogs — they speak very loudly with their dollars,” he said.