Lawmakers debate mobile consumer rights bill

A proposed consumer rights bill for mobile telephone service drew mixed reviews during a hearing in Congress Wednesday with detractors saying the legislation would place too much regulation on a competitive industry.

The draft legislation, floated by Representative Ed Markey, a Massachusetts Democrat, calls for the U.S. Federal Communications Commission (FCC) to make rules requiring mobile carriers to offer unsubsidized handsets to customers, to offer service with no early termination fees and to detail charges like termination fees.

The draft bill would also require the FCC to make rules for mobile carriers to provide detailed coverage maps and would prohibit carriers from tacking on additional charges not approved by the FCC. It would require carriers to offer 30-day, penalty-free trial periods for service, and it would prohibit state or local governments from outlawing municipal broadband projects.

Some lawmakers complained about early termination fees and the inability of customers to take their phones from carrier to carrier. Two major carriers, Verizon Wireless and AT&T, announced mobile-phone portability plans in recent months.

Four witnesses at the hearing, including the head of the CTIA, said that they like parts of the bill. The bill moves toward pre-empting state regulation of mobile carriers, said Steve Largent, president and CEO of CTIA, the trade group representing wireless carriers.

But several mobile carriers are already moving toward many of the changes required in the bill, Largent said.

The draft bill also would basically require mobile carriers to develop cost schedules for service and devices, Largent added. This would “result in protracted legal wrangling over the appropriate methodology for determining the cost of a device or subsidy,” he said. “When prices for both service and devices … are characterized by rapidly falling prices, [this requirement] would surely bring the pace of innovation in billing and service places to a grinding halt.”

Several Republicans on the House Subcommittee on Telecommunications and the Internet suggested that the bill imposed too many regulations on mobile carriers. “Competition in the marketplace is what we should be constantly striving for,” said Representative George Radanovich, a California Republican. “It is always far superior to meeting consumer needs than government regulation.”

But Markey, chairman of the subcommittee, questioned why providing customers with more information would be a bad thing. “I believe we should establish a national policy for wireless consumer protection,” he said.

Markey asked Largent whether customers who brought their own mobile phones to a service should be charged early termination fees.

Largent said early termination fees were still appropriate because they include more than the cost of a mobile-phone subsidy, but also include the costs of providing customer service and signing up customers.

Chris Murray, senior counsel for the Consumers Union, questioned why customer service and marketing costs were part of the early termination fees. “Isn’t that the cost of doing business?” he asked.