BILL SHOCK AND OTHER CELL PHONE WOES—Cell phone use continues to increase and consumer complaints have skyrocketed. Because few federal regulations exist for cell phones, California and other states must enact policies that protect consumers.

Complaints On The Rise From Cell Phone Customers

The California Public Utilities Commission is currently considering whether to reinstate its protections for cell phone users. The best case for doing so may be the wireless industry’s own television commercials.

Sprint, Cingular and others recruit customers by panning their competitors’ services. Their 30-second spots highlight their competitors’ dropped calls, poor reception, and unfair billing practices. These ads work because, as government statistics show, so many consumers have experienced cell phone problems.

The Federal Communications Commission (FCC), the agency charged with overseeing the wireless industry, reports a nearly 40-percent rise in complaints between 2003 and 2004, a rate that significantly outpaces the increase in subscribers. Although the FCC tracks complaints, it has done little to regulate the industry, instead looking to competition and market forces to protect wireless subscribers.

”Competitive pressures alone fail to ensure that cell phone customers are treated fairly,” said CALPIRG Legislative Director Steve Blackledge. “To make matters worse, mergers within the industry are reducing competitive pressures on carriers to offer better deals and service.”

In survey after survey, cell phone subscribers reveal chronic dissatisfaction with the wireless industry. When problems arise, consumers are often locked into long-term contracts with hefty early termination fees.

While the FCC has taken a hands-off approach, California and other states can play an important role in establishing basic consumer protections:

• Wireless contracts and marketing materials should clearly spell out the terms of the contract in a standardized format. The contracts should be available in the same language in which the companies market their service.

• Cell phone bills should be clearly organized. Consumers should be able to dispute billing errors through the Public Utility Commission, and providers should not treat the disputed portion of the bill as late or terminate the contract for non-payment if a complaint is pending.

• The state utility commission should monitor service quality. Data should be collected and made publicly available so consumers can compare signal strength, dropped call counts and dead zones across carriers.

• Consumers should have a risk-free trial period during which they can cancel any new service contract without penalty. This trial period would give consumers time to evaluate whether the cell phone service works where and how it was promised.

• Carriers should be prohibited from changing the terms of a contract without the consent of their customers.

CALPIRG is urging the California Public Utilities Commission to stand up to the wireless industry and reinstate its Telecommunications Bill of Rights. CALPIRG is also opposing federal efforts to preempt state action on cell phone protections.