Senators take on cell phone contract fees
Early terminations have long annoyed cell phone subscribers, but now they're beginning to annoy Congress as well. On Friday, Sens. Amy Klobuchar (D-Minn.) and Jay Rockefeller (D-W.Va.) introduced a bill that would give subscribers greater freedom to leave cell phone carrier contracts before the agreements expire.
The Cell Phone Consumer Empowerment Act of 2007 would allow subscribers to cancel a contract for any reason up to 30 days after a new agreement is signed or an existing contract is extended. Klobuchar said the bill is all about fairness. "Early termination fees are a family budget buster," she said. "Families should be able to terminate service without outrageous fees and know if their cell phone will work on their drives and in their home and office."
While most carriers already give subscribers a set period for leaving a new contract, they are not required to do so by law. What's more, the bill would require carriers to prorate ETFs the closer a subscriber is to the contract's ending date. Here again, many carriers already offer that option, but it is not required.
Not surprisingly, the wireless industry's lobbying arm in Washington isn't greeting the bill with cheers. In a statement, Steve Largent, the president and CEO of the Cellular Telecommunications Industry Association (and a former Republican member of Congress), disputed the need for any regulation.
"Wireless consumers in America enjoy the most affordable service in the free world," Largent said. "The [bill] is unnecessary and, if enacted, threatens to increase the cost of wireless service and reduce the number of choices available to American consumers." He also cited FCC statistics that state that between 2003 and 2006, the number of contract related complaints fell from 15 for every 1 million customers to nine for every 1 million.
The CTIA has long defended ETFs as a way for them to offer free and discounted cell phones and plans at a lower monthly price. "ETFs are a means of holding customers to the 'bargain' they made with their carrier," said a CTIA position paper from earlier this year. "They allow carriers to offer their most attractive rate plans to their customers who commit to a specific term."
But Klobuchar and Rockefeller aren't buying that argument and are calling for additional mandates in their legislation.
Most interestingly, it directs the FCC to submit a report to Congress that studies the practice of handset locking and its effect on consumer behavior and competition. Though phone locking has been a long-standing practice in the industry, AT&T's much-publicized exclusive on the Apple iPhone has brought the issue under Congress' radar.
Additionally, the bill mandates that carriers do the following: produce coverage maps that are detailed enough to identify whether a person could get service in their home; make public-specific details on coverage gaps and dropped calls; and inform customers of rate changes at least 30 days before they take effect. Fees not expressly authorized by federal, state, or local governments would be illegal, and carriers would be required to clearly explain all fees and break out roaming charges in a separate section of a subscriber's monthly billing statement.
Kent German is a senior editor for cell phone reviews at CNET. When he's not testing the newest handsets on the market, he's blogging about cell phone news for Crave. In his On Call column, he answers reader questions and gives his take on the rapidly changing mobile industry. E-mail Kent. 
I also like the fact they are going to look into cell phone locking. I have long thought this was an unfair practice but I also understand that some carriers don't support all the features a phone is capable of.
In the end it really won't make much difference, since many carriers already do most of that. It will just make the rest of them more fair in their practices.
"Wireless consumers in America enjoy the most affordable service in the free world".
Only in America wireless customers have to pay for incoming calls. So in reality US customers pay 2x a minute that they think they are paying (compare to europe for example).
Only in America you have to pay ridiculous roaming fees (compare to europe).
Only in America you have to sign 2 year contract.
So where is this "affordable" in US wireless service?
I would like to know where in the Constitution it says the Congress is supposed to monitor cell phone contract fees, oil company profits, mortgage company bailouts, airline bailouts, and all the rest of it? The Constitution says anything about ANY of those things! It's not the job of Congress to muddle in the business of these corporations.
Speaking of which, how in the world can Congress think they can manage the world's largest enterprise -- healthcare -- when EVERYBODY knows the government can't manage anything correctly?! These people can't even keep our borders closed; what makes people think they can manage something far more complex as the healthcare system in our country.
The role of Congress is limited, and they need to be put in their places instead of ever-increasingly encroaching in our business. I say to Congress, get out and stay out!
with the Indian Tribes;
Cell phones clearly fit into Interstate Commerce.
To borrow money on the credit of the United States;
To regulate commerce with foreign nations, and among the several states, and with the Indian tribes;
The Congress has the power "to regulate commerce." The fact that cell phone contract fees are not explicitly mentioned in the constitution does not negate their power to enact legislation affecting how companies may apply contract fees.
Hahahahaha...
I love it how the pols use this homey language. "Family, budget busting, the kitchen table, etc." All that crap. Never mind that entire states like Ohio are basket cases because we lost most of our manufacturing jobs. I don't think Mr. and Ms. Jane and John Doe are sweating over cell phone termination fees. They are sweating over the fact that John lost his job of 20 years at the manufacturing plant to the Chinese. John can't even get a job at the local meat packing plant because the illegals are working there. John doesn't speak Spanish, so the shift supervisor at the burger joint won't hire him either. Now John can't even get a job as a long haul trucker because the Mexican truckers are doing that too. John is hoping that maybe he can get a job as a gardener tending to the well manicured lawns of the wealthy Mexican industrialists living in the gated community on the other side of town. He's not very hopeful though.
Lobbyists are filth, a true blot on democracy and freedom. They pervert democracy and twist it for the economic interests of their employers.
"By the people, for the people"...yeah right...fry all of Washington regard;less of which party they belong to. Not a single one of them cares about you or me.
There is nothing like putting the power of the dollar in the customers' hands. The ability to switch providers without the axe of the contract over one's neck would do much to improve overall cell service and equipment.
Have you reviewed any of the cell phone carriers plans? Doesn't look like it? Roaming doesn't exist with any major carrier, unless your talking 8 years ago...Most Europeans I've met, actually enjoy owning a cell phone in the States.
Her contract ended on Sept 13. Then in Nov she gets another bill for #82.47 almost $20.00 more then she paid under her contract.
When we called we were told that the when the contract ends you're switched (with no notice) to a month to month contract.
This is wrong and legislators need to address this issue. The provider should be required to send you a notice asking if you wish to continue service with them, terminate the service or get a new contract. They shouldn't be able to just continue to bill you.
Her contract ended on Sept 13. Then in Nov she gets another bill for #82.47 almost $20.00 more then she paid under her contract.
When we called we were told that the when the contract ends you're switched (with no notice) to a month to month contract.
This is wrong and legislators need to address this issue. The provider should be required to send you a notice asking if you wish to continue service with them, terminate the service or get a new contract. They shouldn't be able to just continue to bill you.
- by jonandydavis May 28, 2009 7:14 PM PDT
- There is now a service that will actually cancel you cell phone contract completely! This is not a trading service where you might wait 6-12 months before you are ever out from under your cellular service. These guys actually get you out completely. I thought you might be interested since it relates to your article. Here's how dissatisfied cellular customers can get out of their current plans. http://www.CellBreaker.com
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