A continuation of
earlier sessions on the subject, Senators Amy Klobuchar and Jay Rockefeller have introduced legislation this month that could throw a rather hefty monkey wrench at the contracts and early termination fees wireless subscribers have come to know and
love loathe. Known as the "Cellphone Consumer Empowerment Act of 2007," the proposed bill takes swings at virtually every aspect of carriers' billing practices, limiting what fees can be listed on statements, capping contract termination charges, and giving the FCC more direct control over handset locking practices. Naturally, the CTIA and its members are less than thrilled with the proposed law, arguing that it'll lead to higher bills (quite the opposite effect the legislation's sponsors had in mind) and that consumer complaints levied against carriers on the already decline without government intervention anyway. Grab some popcorn and have a seat, folks; this won't all get resolved for a hot minute or two.
posted Sep 19th 2007 at 3:03AM
Reader Comments (Page 1 of 1)
foner @ Sep 19th 2007 4:53AM
I don't know if it is within the scope of engadgetmobile, but I would love to see a cost-comparison of a (common) monthly plan in the US vs. the UK or EU to illustrate how and if consumers are being hosed by carriers here and elsewhere. (key points: handset subsidies and incoming communications free - or not)
brescoach @ Sep 19th 2007 8:29AM
This is a bunch of crap. You do away with termination fees (or cap them) and you'll be paying close to full price for a new handset when you decide to re-up or go with a different company.
Phones cost money. Towers cost money. Running a business day to day costs money. Carriers actually don't make much money during the first year of having you as a customer. Sometimes they lose money on you. They make the bulk during the last 3-6 months of your contract during a 24 month period.
Effectively, this would hurt the smaller service providers more than the bigger ones. Smaller companies pay more for handsets (because they aren't buying 500,000 of them at a time), and typically have to charge more up front than nationwide carriers. That cost gap will now grow larger.
Just a bad idea from start to finish. This will hurt customers more than help them in the long run.
Mehool @ Sep 20th 2007 1:42AM
I agree 100%. I actually have no problem signing a 2 year with Verizon, and thats just what I did a month ago after nearing the end of my first contract. Any issues I have had with them have been resolved, I don't feel a need for the govt to put the pinch on the cell carriers.
I see the reasoning behind the Early Termination Fees -- if you don't like the ETF's then don't expect to get your phone subsidized, and don't sign a contract. Go prepaid.
I hope this legislation falls through.
Lurking @ Sep 19th 2007 8:47AM
If carriers arent able to lock phones to their network anymore we are going to be looking at full retail for phones. Thats not helping anyone. You want to make people happy? Lower the taxes and regulatory fees on the bill.
PakieMak @ Sep 19th 2007 9:21AM
If this covers locking features of a cellular device, then I'm for it. I'm sick of carriers locking out features because they don't want to support it.
(cough)Verizon Wireless(cough)
About paying full price for the phone... it may not be as bad as some thinks. Manufacturers could sell through other channels without carrier approval. Instead of buying a "crippled" phone through a carrier, you can buy a "healthy" phone off a BestBuy (not the VW BestBuy kiosk) shelf and you won't have to be "under-contract".
I'm just saying there is more positives then negatives. More channels for selling means deals.
John from Chicago @ Sep 19th 2007 9:46AM
If you don't have to subsidize the phone through the contractual payments then the rates and charges will go down. You will know exactly how much it cost to buy the phone and how much it costs for service. Right now they can charge whatever they want and get away with. They make you feel better by giving you (or discounting) a phone. This needs to be put in place immediately.
apeguero @ Sep 19th 2007 10:43AM
What would this do to the iPhone/AT&T scenario then? I mean, AT&T is charging full price for that phone yet it's locking it to it's network only and will also charge you an early termination fee if you walk out before the 2 year contract. I think that may be one of the many reasons why we need a bill like this. It doesn't sound like good ethics for AT&T to do such things.
Also, isn't there a law already that was passed earlier this year which empowers the consumer to have their carrier locked phone be unlocked upon request? No special reason needed but just to simply and politely ask the carrier to unlock their phone? If so, would this law also apply to the iPhone and AT&T? Talk back please. I'd like your opinion.
Glen @ Sep 19th 2007 12:44PM
I like the part limiting what can be listed as additional "fees and taxes" on statements. If a carrier advertises a plan for $39.99 / month, it ought to cost $39.99 / month excluding any taxes that vary by the region the phone is sold in. Basically state, county, and local sales taxes are the only fess that should be allowed on top of the advertised price.
If the advertised price isn't the actual price, how are consumers supposed to comparison shop? Without the easy ability to comparison shop for consumers, the wireless service providers are not operating in a competitive environment.
Jake Geiser @ Sep 19th 2007 2:10PM
I think, in all honesty, we should ditch all CDMA technology, go pure 3G in the states, and then make the unlocked phone market much larger.
See, this major misconception with ALL carriers is that people think that when they get a free phone and it breaks, they can come in and get a new one for free because thats what they got theirs for when they signed up. Where as, the person getting the new MotoRAZR2, or BlackBerry 8830 knows that there is a fairly large subsidy on the phone. Its that much large percentafe of people that dont really look at how much their subsidy is for their "free phone" that this bill is aimed towards because they feel that this service that were providing them should be at a contractual level, but they would never say that if they bought a car and signed a lease contract for 5 years, or their house gets a leak in the roof and the signed a mortgage for 30 years, they understand that it is an agreement to pay the bank x amount of dollars a month, so why can't they do the same for a two year agreement where they got a substantial discount on a phone?
Jake Geiser @ Sep 19th 2007 2:13PM
I forgot to add that ignorance is the reason for this bill.
I think a bill like this would be detrimental to the wireless industry.
charlie @ Sep 19th 2007 5:16PM
in terms of US/EU pricing, I did some basic comparsion shopping online:
findings:
1. US consumers don't get much of a subsidy. Low end phone may be free, we pay top dollar for high end phones. I saw numerous offers for 50 euros for a 2year contract on a n95. I can't find a smartphone out there for less than $100 in the US.
2. US consumers get a hell of lot more minutes, and also better data plans. (yes, Euro incoming calls are free, but we're talking 40 pounds for 50 minutes as opposed to the 2000+ minutes you could get for 80 dollars).
3. EU carriers have to give you unlock codes after a period of time. Good luck having that here. As I said, I don't think we are getting much of a subsidy to buy handsets -- maybe $100 or so.
PakieMak @ Sep 19th 2007 4:22PM
Jake,
I agree with you on the CDMA thing... but so far VW is #1 in all 10 major markets. If GSM was just as good, people would go to TMO.
But you have the ignorance thing wrong. It's the sales people who don't educate their customers. Some people don't care to learn the tricks the companies play on them. It is a hassle to them.
Also why should I pay the same amount per month as a subsidize person when I buy my phones out right? I don't like contracts, never have, and never will. I hate the thought of signing my name to a piece of paper when I own the item.
Sell cellular items through retail locations, like landline phones, and you'll see prices drop across the board. No more "termination" fees, no more "special" discounts that rape you in the end and no more stupid contracts.
pds @ Sep 19th 2007 6:57PM
Wow some real industry shills in here. Did you even look at what this bill is about? How is a pro-rated early termination fee going destroy the very fabric of the wireless industry? Yes, it's pro-rated, not capped, not doing away with it. And not allowing the industry to put hidden fees in your bill.. yes, I can totally see where that would be a bad thing. I mean really, who doesn't like to see these "regulation surcharges" which are nothing more than them passing off operating costs disguised as fees and taxes. You know what? If it's an operating cost then the damn fee should be in the stated cost of the plan, not hidden and disguised as something it's not.
Winston @ Sep 19th 2007 10:19PM
Finally the Gov does something that helps people. Unlocking phones so we can take them to carriers of our choice will create competitive i.e. lower service plans and not being able to hide extra charges, yeah those are bad ideas. Contrary to what some are saying, most people do not know a CDMA/GSM from an STD. Only we know because we have an interest in this shit. Most people only want phones & service that do not drop calls and get a signal when they need it most.
trooth @ Sep 22nd 2007 4:23PM
Yeah cause having customers get their own cell phone will lower the cost of providing service to the customer. Just like owning your own TV lowers the cost of your cable/satellite service. *sigh* It wont lower your bills. Honestly I would like to be able to buy my own cell phone from whoever and bring it to the network I want. Now and for the forseeable future that isnt going to happen.
But yeah, Cell phone companies are service providers just like land line, satellite, cable, electric etc. Taking away contracts wont lower the prices of service, bringing your own equipment wont lower the prices of service either. At least there is competition in the cell phone service market. You dont really have too many choices for who sells your tv or phone or power services. In any decent market you have your choice of at least 4 national carriers and dozens of smaller carriers. I would love to have a choice between dozens of television providers.