FCC Survey: ETFs, Bill Shock Still Baffle Consumers

Wed, 05/26/2010 - 7:55am
Andrew Berg

The FCC today released the findings of an agency survey on the consumer mobile experience that shows one in six mobile users have experienced "bill shock," and nearly half of cell phone users don't know the amount of the Early Termination Fees (ETF) for which they're accountable.

"The FCC's consumer survey provides an important snapshot of the real-world experiences of mobile customers," said FCC Chairman Julius Genachowski, in statement.

Genachowski said that there is still more that can be done. "A simple and easy to understand mobile purchase and billing process will empower consumers to avoid bill shock and other unexpected fees," he stated.

In January 2010, the chiefs of the FCC's Consumer and Governmental Affairs and Wireless Telecommunications Bureaus sent letters to the major wireless carriers to learn more about their early termination fees. And as one of the first initiatives undertaken by the FCC's Consumer Task Force, in early May the Consumer and Governmental Affairs Bureau released a Public Notice asking about possible solutions for bill shock. 

Today's survey found that 83 percent of adults in this country have a cell phone. The survey also found that 58 percent of cell-phone users say they are very satisfied with the number of places they can get a good signal.

The survey found that of the 30 million Americans who have experienced bill shock, 84 percent said their mobile carrier did not contact them when they were about to exceed their allowed minutes, text messages, or data downloads. Fully 88 percent said their carrier did not contact them after their bill suddenly increased.

The amount of bill shock varies widely. In the survey, more than a third of people who experienced bill shock said their bills jumped by at least $50, and 23 percent said the increase was $100 or more.

As for ETFs on cell phone and broadband service, 54 percent of respondents said they would have to pay an ETF should they terminate their contracts before the expiration date, and 18 percent didn't know whether they would have to pay or not. Of those who are subject to an ETF, 43 percent said it was $150 or more, but 47 percent didn't know how much it was.  

President and CEO of CTIA, Steve Largent, released a strong statement expressing his concerns about where the FCC is headed with regards to regulating the wireless industry.

"I am very troubled with the current direction the FCC is taking with respect to the wireless industry – from the messaging sent last week in the Mobile Competition Report to today's survey release," Largent wrote. 

Largent expressed fears that the FCC is "going to attempt to micromanage what is an incredible array of choices for consumers."

"Contrary to the statements in the press release, the industry does provide 'simple and easy to understand' plans for every type of American consumer," Largent contended.

Largent went on to say that the commission's press release "missed an opportunity to educate consumers." 

"Nowhere mentioned in the documents is there any information for consumers about how they can better manage their wireless usage – information that is readily available from every carrier and that has been submitted to the Commission by CTIA and carriers," Largent wrote, noting that the American Consumer Satisfaction Index found that wireless customer satisfaction set an all-time high for the second consecutive year and that the Better Business Bureau found 97.4 percent of complaints are resolved. 

"If the FCC is interested in controlling 'shock' on consumer bills, they should address the most egregious part of consumers' bills, which is the almost 16 percent rate of taxes and fees imposed by federal, state and local governments on wireless consumers," Largent concluded.


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