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December 10, 2009 3:24 PM PST

GAO to FCC: Wireless users need more protection

by Marguerite Reardon
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WASHINGTON, D.C.--The Federal Communications Commission got a slap on the wrist Thursday from federal auditors for not doing enough to protect wireless subscribers.

The Government Accountability Office issued a report Thursday that said the FCC needs to improve oversight of the wireless industry to protect consumers. The agency said the FCC needs to do a better job enforcing consumer protection rules and educating the public about how they can submit complaints when they have experienced problems with their carriers.

The report was requested by Rep. Edward Markey (D-Mass.) when he was chairman of the House Subcommittee on Telecommunications and the Internet.

The survey of more than 1,100 cell phone users found that the vast majority of wireless subscribers, 84 percent to be exact, are satisfied with their mobile phone service, which is good news for the industry. But for the millions of wireless consumers who are dissatisfied, the report determined that the FCC is not doing enough to help them resolve their problems or protect their interests.

One of the biggest issues uncovered in the report is the fact that carrier early termination fees are preventing dissatisfied consumers from switching carriers. The report found that among consumers who wanted to switch carriers but did not, about 42 percent said they didn't switch because of the early termination fees that carriers charge customers when they end their contracts early. These fees apply to consumers who sign up for carrier contracts and buy a subsidized device. The fees can cost anywhere between $150 and $350.

The industry argues that the fees are set so that carriers can cover the cost of subsidizing the phones. Congress and the FCC have questioned this practice and now all four major U.S. wireless carriers prorate their early termination fees.

The GAO report also found that the FCC is not providing enough oversight in how carriers resolve complaints. The FCC receives about 20,000 complaints from consumers per year, and it forwards these complaints to carriers. But the GAO said the agency does not provide enough oversight to make sure those issues are resolved.

"FCC also lacks goals and measures that clearly identify the intended outcomes of its complaint processing efforts," the report said. "Consequently, FCC cannot demonstrate the effectiveness of its efforts to process complaints."

Other issues cited in the report include billing problems. According to the report, about 34 percent of mobile-phone customers received unexpected charges on their bills. And roughly 31 percent had difficulty understanding their bill.

CTIA, the trade group that represents the mobile phone industry, pointed to the positive aspects of the report that found that 84 percent of customers were satisfied with their service.

"In this fiercely competitive industry, our members work very hard for each customer to provide them with the best products and services," Steve Largent, CTIA's president and CEO, said in a statement.

The GAO report suggests the FCC develop goals for handling consumer complaints. And it recommends that the agency analyze the complaints to identify trends and to see if carriers are actually complying with existing rules. The report also suggests the FCC come up with better ways to communicate with state officials to address some of these problems.

"The FCC can--and must--do more to make sure consumer concerns are resolved by wireless carriers and oversee the wireless industry with a greater focus on consumer protection," Senate Commerce Committee Chairman John Jay Rockefeller (D-W. Va.), said in a statement. "It is time for the agency to take real action to better protect wireless consumers."

At the telecommunications and policy summit here on Thursday, Ruth Milkman, chief of the wireless telecommunications bureau at the FCC, said the agency is already addressing some of these issues. Last week it opened an inquiry into Verizon's recent early termination fee hike. Verizon Wireless raised the fee for terminating a contract for a smartphone to $350 from $175.

In a formal response to the GAO report, the FCC said it has already launched three proceedings examining mobile-phone practices. And the FCC also noted that it's developing a new system for tracking complaints.

Originally posted at Signal Strength
April 14, 2009 4:36 PM PDT

Calif. mulls criminalizing cell phones in prison

by Marguerite Reardon
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One California state senator is trying to crack down on inmates using cell phones while serving time.

California State Senator John Benoit discusses cracking down on cell phones in prison during a press conference.

(Credit: Senator Benoit's staff)

Prison inmates in California aren't really permitted to have cell phones. They have to forfeit their devices before being locked up. But that hasn't stopped thousands of phones from being smuggled into prisons each year. In fact, officials say that the number of cell phones confiscated in California prisons has doubled in the last year from 1,400 devices in 2007 to about 2,800 in 2008. And the problem appears to be getting worse this year.

Currently, being in possession of a cell phone or smuggling it in for someone else is only a rules violation. But California State Sen. John Benoit wants to make it a misdemeanor crime with a maximum penalty of a $5,000 fine for a prisoner to possess a cell phone in any state prison.

Benoit and representatives from the California Department of Corrections and Rehabilitation held a press conference Tuesday to discuss the new bill he is introducing called SB 434.

Allowing prisoners to access cell phones is a huge problem, because many inmates use them to plan escapes, plot violent crimes both inside and outside of the facility, and to conduct drug deals, officials said.

"Cell phone smuggling into California's prisons is a very serious and growing problem," Matthew Cate, secretary of the California Department of Corrections and Rehabilitation, said during the press conference. "Public safety officials in prisons and prosecutors on the outside need additional tools to combat cell phone smuggling to inmates."

Part of the problem seems to stem from prison guards who are often part of the smuggling ring. According to the Sacramento Bee, sworn and civilian correctional employees are suspected of smuggling in more than half of the cell phones that end up in prisons. And it's not difficult to understand why, when some inmates are willing to pay up to $1,000 per phone. One prison employee admitted to the newspaper that he made up to $100,000 in one year smuggling phones into the prison where he worked.

Originally posted at Wireless
January 20, 2009 8:46 AM PST

Spectators crowd the Mall and wireless networks

by Stephanie Condon
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WASHINGTON--Cell phone traffic near Capitol Hill was three to five times its normal levels late Tuesday morning, just as Barack Obama was set to be sworn in as president.

Even with high traffic, most calls continued to go through, wireless carriers said--a good thing for the many spectators on the National Mall who were depending on cell phone service to get through the day, despite carriers' warnings of dropped calls.

Gridlocked crowds of people swarmed the perimeter of the Mall early Tuesday morning in an attempt to watch Barack Obama's presidential inauguration. Some inauguration-goers near the west end of the Capitol even began to trample over a perimeter fence, Capitol Police said. As the crowds stood shoulder-to-shoulder, just about every other person grasped a cell phone, trying to contact others nearby.

Carol Moore, center, tries to reach her husband and children via cell phone before walking farther to the National Mall on Tuesday.

(Credit: Stephanie Condon/ CNET News)

Eileen Lewis, here from Atlanta, received scattered service on her prepaid Motorola TracFone during Sunday's "We Are One" concert at the Lincoln Memorial but still found herself trying to keep track of her son with it on Tuesday morning.

Crowds were barely able to move on D St. NW, near the Capitol Building, and Lewis' son had gotten ahead of her. She wasn't concerned, as she tried to inch closer to him, that she may not be able to reach him.

"We're just trying to get to the Mall," she said.

There were scattered reports of others, like Lewis, who lost service on the Mall during Sunday's concert.

Sprint's traffic more than doubled that day, according to John Taylor, a Sprint spokesman, with more than a million extra calls.

By 11:30 a.m. local time Tuesday, Sprint was handling three times its normal traffic for voice calls and roughly five times its normal traffic levels for data usage. On top of that, many of the calls going through tied up the network for significant periods.

"People are not making quick calls," said Sprint spokeswoman Stephanie Vinge-Walsh. "They'll call people and share the experience with them for many minutes."

Verizon Wireless also reported three to five times the normal traffic level around 11:30 a.m., with most calls going through on the first attempt.

AT&T was experiencing heavy volumes of traffic as early as 9 a.m., but the networks were running smoothly in the morning, said AT&T spokesman Mark Siegel.

Carol Moore, however, found her daughter's iPhone unreachable by 8:30 a.m. Moore and her husband, who were visiting from England, had to separate from their children because they had tickets for different areas of the Mall.

Moore also had to separate from her husband because a bad knee kept her from trekking to the back of the line to pass through the security gate. She was able to use her Sprint service to let her husband know where exactly she was waiting for him. If she cannot reach her daughter during the ceremony, Moore said she suspected she would not reach her until the day is done.

"We are borrowing a house three blocks away, so that is the contingency plan," she said.

Patty Brink's family, also attending the inauguration, planned to separate during the swearing-in and reunite during the inaugural parade in the afternoon. She and her son parted ways with her husband, equipped with T-Mobile service on Brink's BlackBerry and Verizon service on her cell phone.

"We're going to the swearing-in, and he's going to go save us parade seats, and he'll let us know if we can actually get into the parade area," she said. "I don't know what we're going to do if we can't text or BlackBerry."

"If we can't get in," Brink said turning to her husband, "we'll see you at home."


November 24, 2008 4:18 PM PST

Senator probes privacy law after Obama phone record breach

by Stephanie Condon
  • 10 comments

In light of the recent breach of President-elect Barack Obama's cell phone records, a senator on Monday sent a letter (PDF) to the Justice Department asking how many investigations or prosecutions the department has undertaken for violations of the Telephone Records and Privacy Protection Act.

Senate Judiciary Committee Chair Patrick Leahy (D-Vt.) sent the letter to Matthew Friedrich, acting assistant attorney general, noting that "data privacy breaches involving the sensitive phone records of ordinary Americans are occurring with greater frequency."

The Telephone Records and Privacy Protection Act, which Leahy sponsored and Congress passed in 2007, prohibits telecommunications carriers from obtaining confidential phone records by accessing customer accounts through the Internet without permission. Along with information about prosecutions and investigations, the letter asks whether the department has found the law effective in protecting Americans' privacy.

Obama's cell phone records were improperly accessed earlier this month by Verizon Wireless employees who were subsequently fired.


November 3, 2008 1:15 PM PST

More evidence cell phone users affect polls

by Stephanie Condon
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The latest political polling numbers suggest that poll results sway in favor of one candidate or another depending on whether a pollster calls likely voters on cell phones, Nate Silver pointed out on FiveThirtyEight.com on Sunday.

Silver's analysis shows that out of 14 polling organizations, the five that call likely voters' cell phones (shown in gold in the accompanying chart) put Democrat Barack Obama ahead of Republican John McCain by an average of 9.4 points. By contrast, the eight pollsters that do not call cell phones have Obama ahead by 5.1 points.

The data mirrors studies that suggest likely voters who only use cell phones are more likely to vote for Obama. The Pew Research Center last month released a study showing that cell phone users favor Obama more than landline users by at least 10 points.

Cell phone users have presented a challenge to pollsters because they may no longer live in the state to which their phone number corresponds, and the cost of using cell phone minutes could affect their participation in polls.

October 17, 2008 10:31 AM PDT

Cell phones make life tough for pollsters

by Ina Fried
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While I normally leave the politics writing to others, this Wall Street Journal story caught my eye.

Sure, I was sucked in by the main story about how some polls show the presidential race as much closer than others. But what really captured my attention was the technology issue that was behind some of that variance.

Historically, pollsters have dialed random house phones to get their selection of voters. The problem is that more and more people, particularly young adults, don't have a landline.

The difference can be significant, as pointed out by a Pew research study last month. The organization conducted three separate polls--in June, August, and September. Each time, the difference between cell phone users and landline voters represented at least a 10-point swing (in Barack Obama's favor among cell phone respondents). The blended result was obviously more muted, but still showed a meaningful bump for Obama as compared with landline-only polling.

To be sure, the cell phone issue is just one of many complicating factors for pollsters this year, including how to weight party affiliation and other decidedly non-tech issues. Anyway, I thought the cell phone issue was one worth some attention.

Originally posted at Beyond Binary
September 19, 2008 4:00 AM PDT

New taxes on your monthly cell phone bill?

by Stephanie Condon
  • 9 comments

In an economy gone sour, local governments seeking new sources of tax revenue have begun hungrily eyeing their residents' monthly cell phone bills. But some members of Congress would like to block that, which has sparked a debate in Washington about federalism, tax policy, and fairness.

Introduced in April by Rep. Zoe Lofgren, D-Calif., the Cell Tax Fairness Act would impose a five-year moratorium on what the bill describes as any "new discriminatory tax" on wireless services and providers. Foes and supporters of the measure showed up Thursday in front of the House Judiciary Committee's subcommittee on commercial and administrative law.

"Wireless services and mobile devices play a growing role in affordable broadband access in this country," Lofgren said at the hearing. "Especially for low-income people, this is going to be the way to the Internet superhighway."

The average tax rate on wireless services is double the average sales tax rate--it stands at 15.19 percent, according to one study. That high tax rate "disproportionately impacts low-income consumers," said James Clayborne, an Illinois state senator. "For millions of Americans, these services are crucial to their everyday lives."

However, some local government officials say the legislation would unfairly constrain state and local governments' abilities to collect much-needed taxes.

Most state and local governments are required to balance their budgets, argued Gail Mahoney, the commissioner of Jackson County, Mich. The rough economy has made that increasingly difficult, though. At least 29 states face a combined budget shortfall of $48 billion for fiscal year 2009, according to the Center on Budget and Policy Priorities.

"It is so important officials have every revenue opportunity they can," Mahoney said. "The last thing Congress needs to do is enact legislation that would preempt the taxing authority of state and local governments."

Scott Mackey, an economist with Kimbell Sherman, said there would be no fiscal impact on state or local governments because it would not affect taxes already in place. Additionally, he said, "It would allow new taxes provided those taxes were not singling out wireless services."

Clayborne said the bill would help stimulate telecommunications tax reform because "you'd force the state and local and county governments to come together to address this issue."

Others disagreed. Attorney Tillman Lay, testifying on behalf of the National League of Cities, the National Association of Telecommunications Officers and Advisors, and other associations, said the Cell Tax Fairness Act would only stagnate tax reform by giving preferential treatment to the wireless industry.

Moreover, he said the preferential treatment would "open the door to other industries asking Congress for similar special exemptions," putting state and local tax revenues at dire risk.

The bill would not set a precedent, though; Lofgren pointed out the legislation is similar to the Internet tax moratorium implemented four years ago.

As with the Internet tax moratorium, Lofgren said a cell tax moratorium is important because of the industry's important role in increasing national productivity. She noted that providing affordable broadband access for all Americans is part of the Innovation Agenda she developed with Rep. Anna Eshoo, D-Calif., and House Speaker Nancy Pelosi, D-Calif.

Sen. John McCain, the Republican presidential candidate, introduced a similar bill, the Cell Phone Tax Moratorium Act, into the Senate in 2007. Rep. Ric Keller, R-Fla., asked Clayborne if he would be able to convince Barack Obama, Clayborne's former colleague on the Illinois state senate, to vote for McCain's bill. Clayborne did not answer, but Mahoney declared, "I would say you would not be able to convince the senator on this issue."

August 7, 2008 12:13 PM PDT

Feds seek comments today on cell phone security guidelines

by Stephanie Condon
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Mobile devices today are far more capable, and capacious, than the analog bricks of decades past. That also creates new security risks, which the feds are asking the public to address in comments due Friday.

"Mobile devices are expected to continue to become more powerful and communicate at higher speeds, eventually giving people the power and functionality of a full desktop," the National Institute of Standards and Technology says in its draft of Guidelines on Cell Phone and PDA Security. "Besides increasing productivity, such improvements are rapidly turning cell phones into extensive data reservoirs capable of holding a broad range of personal and organizational information."

The increasing capabilities of handheld devices create risks that regular consumers--not just corporate customers or government employees--should be watching out for. Prepared for federal agencies but available for anyone to use, the draft guidelines from NIST are open for public comment through Friday.

The draft includes guidelines for both organizations and individuals using cell phones and PDAs. It suggests organizations deploying cell phones address security issues in advance, disable unnecessary services and providing central management and oversight of the devices. Individual users are encouraged to take steps such as using pin numbers or passwords and installing malware prevention software.

The document cites the range of technology now available for handheld devices, including Global Positioning System (GPS) receivers, reduced-sized removable-media card slots, and wireless interfaces. The ubiquitous gadgets that most people are literally attached to the hip to are vulnerable to theft, spam, and eavesdropping, among other problems listed in the guidelines.

"An increasing amount of mobile malware has been reported over the past several years, which raises concerns for the future, particularly when coupled with the recent trend towards establishing a more open system environment for cellular handheld devices," the draft says. It also cites a study that estimated that 85,619 cell phones and 21,460 PDAs were left behind in one Chicago taxi firm's vehicles during a six-month period.

Comments on the draft document can be submitted via email to 800-124comments@nist.gov with "Comments SP 800-124" in the subject line.

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