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  • A Regulatory Shock from the FCC

    The Federal Communications Commission (FCC) has set its regulatory sights on wireless telephone providers for instigating a supposed epidemic of “bill shock” across the land. But a review of complaints to the agency, as well as government survey data, casts considerable doubt on the agency’s claim that consumers are terrorized by their mobile phone charges.

    As illustrated in the accompanying graph, complaints to the FCC related to billing and rates for wireless telephone service accounted for a mere 3 percent of complaints overall in 2009—a significant decline from 17 percent in 2002. (Radio and TV broadcasting drew the largest number of complaints, at 51 percent.) Among complaints related specifically to wireless services, the category of billing and rates comprised only 19.5 percent.

    In fact, the vast majority of mobile phone subscribers are coping just fine. A 2009 survey by the Government Accountability Office found 84 percent of adult wireless users to be “very” or “somewhat” satisfied with their wireless service compared to only 10 percent who were “very” or “somewhat” dissatisfied. Moreover, there was little difference in the proportion of subscribers who stated dissatisfaction with “billing” (12 percent) and the level of dissatisfaction with other elements of service, including call quality, contract terms, explanation of service, and customer handling.

    FCC officials claim that few consumers file complaints because they don’t know whom to complain to. Even if true, there’s no reason to think more informed consumers would change the nature and distribution of complaints.

    Regulatory overreach appears to have set in from the very start, as FCC officials modeled the proposed rules on “mechanisms” adopted by the European Union. No surprise, then, that the proposed requirements treat consumers as utterly incompetent to manage their own mobile phone use.

    To wit, mobile service providers would be forced to:

    • Notify every subscriber whenever their voice, text, or data usage approaches the allotted limit of their plan;
    • Notify every subscriber whenever they actually reach the voice, text, or data usage limits of their plan and additional charges kick in;
    • Notify every subscriber whenever roaming charges go into effect; and
    • Provide subscribers with ongoing notice of any tools available to limit usage or monitor usage history.

    Not all commissioners are following the lead of commission Chairman Julius Genachowski, who launched this regulatory foray. In comments appended to the rulemaking notice, Commissioner Robert McDowell expressed hope that the FCC “will avoid inadvertently interfering with the host of innovative applications and programs that already exist for the purpose of helping consumers manage their wireless usage.”

    Commissioner Meredith Attwell Baker also wisely warned that notification requirements “may be expensive and burdensome for smaller providers and prepaid services and put them at a competitive disadvantage.”

    None of which is to say that “bill shock” doesn’t exist. Undoubtedly there are an appreciable number of mobile phone subscribers who fail to track their usage or misunderstand the terms of their service. But a variety of tracking tools already exist to avoid the hefty charges imposed for exceeding service contract limits.

    For example, several wireless service providers offer applications online and on handsets to review usage and balances. There also are tools for setting limits on voice, text or data use to avoid overage charges. And FCC officials are fully aware that these tools are offered by not only the four largest wireless service providers but smaller ones as well.

    What troubles the agency, apparently, is the sheer variety of tracking methods. As noted in the agency’s notice of rulemaking, “We have found that usage alerts offered by mobile providers vary widely between service providers and by type of service covered.” So innovation and consumer choice is bad? There’s no surer way to kill advancements in service than to force wireless companies to march in lock-step.

    Genachowski and allies apparently aren’t listening to Americans’ real complaint: the unchecked growth of big government and its incessant interference in our lives. To the extent a new Congress does get the message, it would be useful to pass it on to the FCC through legislative limits on its regulatory zeal.

    Posted in Economics [slideshow_deploy]

    9 Responses to A Regulatory Shock from the FCC

    1. Shirley Davila, Okla says:

      This comment has nothing to do with wireless phone service, however, since I came across this site, I will ask a question.

      Can't the FCC do anything about Joy Behear using the "B" word on the "View" Program. This is a shame and disgrace. I don't watch the stupid show, but it is blasted all over the TV. In that time slot, when small children are listening, It is just awful.


      Shirley Davila

    2. Barry S, says:

      My God. That's all we need. My carrier already makes me listen to a message informing me of the time remaining each time I try to make a call. I pay for that message. These governmental idiots. The entire system should be abolished.

    3. Drew Page, IL says:

      What I would like to see the government do, in the name of transparency, is require phone companies to show on their bills phone bills, how much of my bill goes for supplying people on welfare with free cell phones and free minutes each month.

    4. Dr dbiggs.CA says:

      Pres OBOZO: "Tea Bagger-in-Chief"

      You Can LIE but can you READ?

      Invasion by illegal ie "Criminal Aliens"

      Obviously you have never read the United States Constitution or

      else feel that in your ivory tower and wealth that it does not apply to you!!

      I feel you need to read the following and act according to the peoples wish

      not your wishes or special interests wish list!

      There are three references to the words "invasions," "invaded," and

      "invasion" in our U.S. Constitution:

      Article I, Section 8: "The Congress shall have Power To Provide for calling

      forth the Militia to execute Laws of the Union, suppress

      insurrections and repel Invasions."

      Article I, Section 10:"No State shall, without the Consent of Congress, lay any

      Duty of Tonnage, keep Troops, or Ships of War in time

      of Peace, enter into any Agreement or Compact with

      another State, or with a foreign Power, or engage in War,

      unless actually invaded, or in such imminent Danger as

      will not admit of delay."

      Article IV, Section 4:"The United States shall guarantee to every State in the

      Union as Republican Form of Government, and shall

      protect each of them against invasion, and on

      Application of the Legislature, of of the Executive (when

      the Legislative cannot be convened) against domestic


      Your Oath of Office and sworn duties as referenced mean you must Act and

      put a Stop to the Invasion of all the Illegal immigrants we are experiencing.

      Our U.S. Constitution mandates that invasions shall be repelled by Congress.

      and that means the persons in the House of Representatives and the U.S.

      Senate. Our nation's sovereignty must be protected.

      How can you even stand in front of a mirror and even look yourself in the eyes

      knowing you are a "Bought & Paid Ho" for special interests and the

      Democratic Party Hacks? Tell me I am wrong, please because I fear for the

      future of our country as you certainly don't care about the people or our


      You go to the SAME PLACE for LYING as you do for STEALING!!

    5. Larry Welch, Idaho says:

      This article describes an excellent example of:

      – bureaucratic redtape

      – government over reach

      – regulatory interference

      These concerns have been voiced a million times in this campaign year as our nation mobilizes to free itself from the all-knowing liberal straightjacket.

      I hope Heritage will continue to bring these examples to our point of focus in the coming months and years. Give writer Katz a raise!

    6. Leon Lundquist, Dura says:

      Over regulation was the Progressive Strategy, they are nudging the Cell Phone Companies now. The shove will come when they have permitted the nudge, essentially when they are acclimitized to government nudges they will be amenible to control. Gosh! They have been doing this stuff for a hundred years. Put the Progressives under House Investigation and millions of American victims will come forward! This isn't hidden to us victims! There are hundreds of good American Companies who have fallen victim to Progressives (Indeed black ops against private Americans). The victims are legion!

      The roots of the Taxed Enough Already Movement are the united Victims Of American Government (and the Progressives behind massive Abuse Of Power). Our wealth has been confiscated! Our Capital wasted! Even during the Campaign Obama was talking down our Economy, making blunders, shaking confidence. He worked for ACORN (and their abuses of CRA) while his friends counterfeited AAA Bonds for sale (worth zip).

      Obama will now Regulate us to death! You can't stop him! I'm telling you the only way to get him is to Impeach the whole gang of Left Wing Communists, their conspiracy is his conspiracy, and in the language of the Law even the 'legal' things they do can be criminal for Government Infiltrators to do. Heritage is right, House Oversight Committees must reveal what Americans can plainly see! Our Representatives do not Represent! Obama is going to go down in flames to get the Agenda through! Obama is already Impeachable! But you have to get the Coconspirators. Get my point! Go after the Conspiracy or we can never be sure our Government is our own.

    7. George, Fort Wayne, says:

      I have to laugh/cry every time I hear of a Federal Agency trying to protect us from ourselves and I can only conclude based on past interference and over reach, here comes another boondoggle.

      The simple solution for anyone who feels they are not getting good value, service or whatever from their cellular carrier is to cancel the service. Wait; Is that too simple? If I'm really that dissatisfied maybe I could live without a cell phone; you know I did for over 50 years! FCC get out of my life, I don't want or need you to make these mundane decisions for me. Go get a real job and contribute something valuable to our society.

    8. Patrick Manley, Colu says:

      Not only is the FCC attempting to regulate a problem that does not exist, they are proposing regulations that will add costs to everyone's monthly wireless bill.

      Federal agencies that waste taxpayer money pursuing foolish regulations such as this should be at the top of the list for budget cuts and complete elimination.

    9. M. Schreck says:

      I guess it's time to complain about regulation…where do we go.

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