CTIA Opposed To Arizona’s Cellphone Users Bill Of Rights
It seems like I’ve been ragging on the CTIA quite a bit lately, but these guys make it so easy.
In what turns out to be absolutely no surprise to anyone, the fine folks at the CTIA–the
industry association for the mobile operators in the U.S.–are opposing Arizona Senate Bill S-1010: The Cellphone Users Bill Of Rights. Why might they be doing that? Let’s see what the CTIA association president Steve Largent says:
The truth is that when you attempt to regulate a modern, high-tech industry as if it were a 1970’s public utility service, you wind-up hurting the people you’re seeking to protect. Just imagine the cost increases and customer confusion that would ensue if wireless carriers were forced to abandon their national calling and data plans, advertising campaigns, billing and customer care systems in order to set-up and comply with dissimilar regulations in 50 - or even two - different states.
Are they really asking for anything that would affect that? Let’s see what S-1010 is asking for:
- 44-1799.72. talks about a lot of what the carriers already provide voluntarily: provide detailed coverage maps, a detailed list of charges, taxes, fees, included minutes, contract length, etc.
- 44-1799.73. restricts contract length to not more than 12 months, requires written notification of any changes to service with the 30-day out clause, and allows subscribers to get out of contracts when the providers violate a provision of the contract.
- 44-1799.74. requires some billing practice changes: only things that are actual state, federal, and local taxes can be listed under a taxes section of the bill, roaming calls must be billed within 60 days and provide the location the call was made from, itemized bills can be asked for on request for no cost, subscribers aren’t to be held liable for use of wireless service if their handset if lost/stolen and it is promptly reported to the service provider, and subscribers can’t have their services terminated while there is a billing dispute.
- 44-1799.75. requires providers to obtain written consent from subscribers before giving their name/phone number to any sort of directory service and must disclose to customers that they may be charged for unsolicted calls/text messages from telemarketers.
- 44-1799.76. requires providers that provide warranty exchange not to require a contract extension when a handset is replaced, must provide new (not refurbished) phones on a warranty swap, and must provide proof of reason for not honoring a warranty swap.
- 44-1799.77. requires providers to submit detailed reports to the state Attorney General twice a year on:
- Blocked calls
- Dropped calls
- Known dead zones/coverage gaps
- Predicted Street-level Signal Strength
I seem to recall that most of this is already being done by the carriers, or would require very minor chanegs to existing practices. The most likely part of this they object to is the restriction on contract length. At least that’s what folks at the Media Freedom Project are complaining about. To quote their letter:
The cost of a cellphone is subsidized significantly by the service provider because of the length of contract; those costs can be recaptured over time. Without that incentive, attracting customers without a corporate subsidized phone would be difficult and cost consumers significantly more to enter the cellphone market. Or, if a provider still wanted to provide a subsidized phone, the monthly service fee would have to account for that initial outlay, therefore significantly cost consumers more on a monthly basis.
Everyone thinks handsets are too expensive, and thus we have to roll their cost into a 2 year agreement so people can afford them. How about for folks in Indonesia, India, and other places? In these locations, handsets can be purchased starting at under $50 US–without a carrier subsidy. And you know what? Even in these poor places, some people still manage to buy high-end Nokia phones–without a subsidy.
I’m sure a $50 handset could easily be rolled into a 1-year service agreement quite easily–if handset manufacturers sold them in the U.S.. I’m also sure that if people really want a nicer handset, they’ll pay the difference. They do for many other things.
Now if the CTIA wants to amend their “Consumer Code” to limit contract length and require open handset policies–allowing consumers to use any compatible handset on any providers network–then I’m all for it. They will have to change those rules if they don’t want those rules–or worse–written into law for them by local, state, or federal bureaucrats.
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Tags: ctia, lies, lobbying, mobile network operators, ripoff Fnord
Comment by Matthew Stevens
The real issue is the carriers don’t want to be forced to do anything that gives the consumer real rights. They like the power of being able to do whatever they want, how they want leaving little the consumer can do or say about it but complain to deaf ears an blind eyes. Giving consumers a level playing field or even the upper hand is the last thing they what, especially since this kind of legislation spread to other states potentially becoming even stricter. Ever other major industry that does business has had to deal with this inevitablility, they are just the latest one. If anything this sort of legislation is long over due with consumers abandoning landlines at a record pace. In many households it makes more sense to pay for only mobile service when families are increasinely mobile. A higher rate plan is still cheaper than having a home phone that’s rarely used. It makes more economic sense to get more from a service that suits your even if it does cost slightly more.
Case in point: For a while we had to have a landline for DSL service. That phoneline sat there rarely used most of that year. For the cost of the most basic line, no features, not even CID or any service that cost even $.01 more. That $15 basic never line that gives you a mere 25 calls a month. Granted those calls were unlimited local calls that in the end cost $30 with all the fees and taxes. For $30 a month a much higher wireless plan be added or select more services, such as data or messaging via includes all extras that were a la cart with landline provides or bundled at ridiculously high rates. That same $30 can buy unlimited messaging for the family and still save $10 is some cases or add a few hundred minutes. Nearly all the carriers have increased their prices in some regard of their own accord long before this kind of regulation came into play. Take the cable industry since deregulation consumer prices continue to rise year after year despite the promise of lower rates after deregulation. Nulling their main arguement about price increases. I typically frown upon more govermental involvement since most of it rarely helps the people its mean to serve, this case in an exception to the usual.
Comment by spg
i say forget about all these little details. there are two monsters that need to be addressed. #1 – all add on fees need to be rolled into the monthly price except for genuine state or federal taxes. #2 – misleading vocabulary needs to be banned in particular use of the word ‘unlimited’ it should be prohibited to use that word in conjunction with any type of ‘fair use policy’ also in the same size print should be clear what is ‘unlimited.’ for example ‘unlimited mobile 2 mobile in your local calling area’ should be all in the same size print. not ‘unlimited calling’ with the rest in microscopic print deep inside the six page contract. let me also add that discretionary fair use policies where the operator has a choice of being nice and letting overages slide or recalculating your bill to charge outrageous fees for the minutes beyond the allow fair use are the worst of the bunch. this should be not only banned but criminal.
while i would prefer not to have subsidized phones and two year contracts i would leave that more to consumers to demand. through out Europe years ago it was consumers(not operators) who came up with the idea of walking into there local cell phone shop, asking to speak to the owner/manager and ask them what kind of cash kickback that could get in place of the free telephone. it was these sort of grey market back room deals that went on for years in nearly every cell phone shop in places like germany, france, and all over europe that eventually led to the current practice of offer highly discounted price plans for those who are not interested in a subsidized phone.
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Comment by PhoneBoy
@kk The main reason we still have a landline is 911. Well that and we can get a landline with all the features AND long distance for about $40/mo.
@spg I wish they offered that kind of deal here, or at least the per-minute plans they offer businesses.
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Comment by Gregory
A user bill of rights? As if a person had a right to extract resources from others or a company. Amazing how the masses wish to use coercion whenever possible–and little do they understand the effects in an economic sense. Sure, even if this passes, the company will make raise other fees to compensate for loss revenue. End of the day? You’ve severely limited the ability of a free person to enter into a voluntary contract and just changed the rules of the game with the same ending.
Comment by PhoneBoy
@Gregory Have you read a mobile phone contract anytime in the past several years? Do you have any idea how one-sided these contracts are? Mobile network operators in North America push really hard on these two (or, in Canada, three) year contracts. They don’t promote their prepaid offerings with the same gusto as a contract. It is often impossible to purchase a phone, particularly through indirect dealers, without a contract attached. Heck even at T-Mobile corporate store, I was unable to purchase one of their contract phones outright and use it on prepaid.
If the mobile network operators and resellers want to change the way they operate without legislation, I’m all for it. While they are making some changes–AT&T seems to be doing the best job at this–it’s not happening quickly enough. Legislation is the only tool the average joe has against these large companies.
Comment by Gregory
The average joe does not need to shop at that store or purchase that service. And, in retort, I read almost everything I voluntary agree to when I enter into a contract. I ask very salient questions whenever I sign my name–ask the salesman at my gym or when I buy things on credit.
And why should a company advertise to your subjective ideals?
The government’s job is not to stand as leverage to sate what a Joe Smchoe wants from a company; it is to protect that Smchoe’s right to freedom and liberty from coercion and fraud. Both force and fraud I’d agree with you on; but when you sign a contract you have the obligation to honor it if it is legally signed.
It just amazes me today how intolerant people are. And before you recoil out of confusion let me explain. Anytime you use force on another (besides self-defense) you are being intolerant. Tolerance is not this ideal that you respect or even understand another. It is allowing it to continue peacefully without intrusion.
Comment by PhoneBoy
@gregory I would argue that you don’t actually sign a mobile phone contract, at least not in the same way I sign a contract to, say, join a gym. There’s usually no pen and paper involved, and they mobile network operators reserve the right to change the terms of service at any time, usually with an out clause when they do. There are arguments as to what constitutes a “material change,” though, as Sprint recently change their pay-per-use SMS rates and specifically said this wasn’t a material change.
I might argue that these legal tactics that are being employed in Arizona are “self-defense.” Try getting around without a mobile phone these days. If you don’t like one mobile carrier, where are you going to go? They all implement the same, basic, consumer-unfriendly policies.
If people want to enter into a two-year contract willingly, it’s their choice. I guess what frustrates me is that people either don’t know, or are unwillingly to believe there is a better way to do mobile phone service. Because of the stranglehold the mobile network operators have over the device manufacturers and the channel, the barriers to changing this paradigm are high.
I will agree with you on the tolerance thing. The lack of tolerance is the cause of so many problems worldwide.
Comment by Gregory
My biggest beef is that when you understand economics in this situation you realize that you can’t legislate to the desired change. AT&T for example is taking the lead in some things, not because of benevolence, but because of competition. The less the government gets involved in distorting the markets and lets markets grow and include viable alternatives, the more the cell phone service providers are competing to win us as customers. That, my friends, is how we win.
Comment by PhoneBoy
@Gregory They may be taking the lead because they fear legislative action also. We can’t rule that out. I would much rather see the market evolve without the congress critters getting involved. Just not happening fast enough for some.
Carterfone took several years before it had any major impact on the way people consumed their landline telephone service. I suspect that the changes that the mobile network operators are going through now will probably take about the same amount of time to trickle down to Joe Public.