U.S. senators are going after cell phone fees and contracts, reports Reuters.
Yesterday, AT&T announced that next year it plans to begin prorating its existing flat rate, $175 early termination fee — a move widely believed to be timed to Wednesday’s hearing, says C/Net. Verizon Wireless already initiated such a practice last year.
But other carriers need to be coerced by law into doing the same, supporters of the wireless bill said. According to Reuters:
Some cell phone companies charge their users $100 to $200 to end a contract no matter what the reason and disguise their own charges as taxes on bills, witnesses told a congressional panel on Wednesday.In a hearing to discuss a bill to end these practices, Verizon Wireless CEO Lowell McAdam stonily pleaded for a “light touch” in regulating the cellular telephone industry.
“We talk to customers every day. We don’t need interference,” he told the U.S. Senate’s Commerce, Science and Transportation Committee. “I don’t believe that this is necessary regulation.”
The bill requires that early termination fees be pro-rated. Companies now sometimes charge $100 to $200 to users who decide to switch to another service, even soldiers who wanted to drop their service because they were being deployed to Iraq.
“We believe it’s time for simple limits on early termination charges,” said Sen. Amy Klobuchar, a Minnesota Democrat who is sponsoring the bill along with fellow Democratic Sen. John Rockefeller of West Virginia.
The bill would also require cell phone companies to identify as “taxes” only charges that were required by federal, state or other regulation.
Sen. Mark Pryor (D-Ark.) today introduced industry-backed legislation that would establish a national regulatory framework and fully pre-empt state oversight of mobile-phone carriers, says RCR News.
The Pryor bill, unveiled during a Senate Commerce Committee hearing today, would effectively compete with the wireless consumer bill championed by Sens. Amy Klobuchar (D-Minn.) and Jay Rockefeller (D-W.Va.).
The Pryor bill would be far less regulatory than the Klobuchar-Rockefeller measure, putting the FCC in the position of policing uniform national customer service and consumer protection rules for wireless subscribers. According to Pryor, “The uniform wireless consumer rules must be comprehensive and they should address, in my view, a broad range of issues including disclosures of contract terms and conditions, service-area maps, trial periods, early termination fees and we could add more to the list if you wanted to.”
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