WASHINGTON-Rep. Anthony Weiner (D-N.Y.) and leading consumer groups said settlements reached by 32 state attorneys general with three national mobile-phone carriers on advertising and contracts are not sufficient to force the wireless industry to change business practices and called on federal and state regulators to do more.
“It takes a special kind of arrogance to refuse to change dreadful service until you are facing down the barrel of 32 state lawsuits. It shows how little the wireless companies care for their consumers,” said Weiner. “Dropped calls, fast busy signals and static is the norm for millions of cell-phone users. If the FCC did its job by compiling data on complaints and dead spots these kinds of suits would never be necessary. Disclosure is the one thing that will let consumers make smart choices before they are locked into bad contracts.”
Weiner backs a bill that would require the Federal Communications Commission to collect and report on cell-phone service complaints such as dropped calls, fast busy signals, dead spots and improper billing. The legislation has not moved in recent years.
The FCC, which collects complaints and publishes totals quarterly, was not available for comment.
“It’s important for Michigan consumers to be able to comparison shop for good deals and make informed decisions when purchasing services,” Michigan Attorney General Mike Cox said. “Under this settlement, these companies have taken steps that will give new cell phone customers easy to understand information about cellular plans and allow them to cancel their contract without paying hefty early termination fees.”
Under the settlements with the 32 states, the three carriers are required to provide coverage maps to consumers, give consumers at least two weeks to terminate service contracts without incurring any penalties and change the way they advertise and sell their services and coverage.
In addition, Verizon Wireless, Sprint PCS and Cingular Wireless L.L.C. agreed to provide a new return policy whereby new customers will be permitted to terminate their service contacts for any reason within three days without paying an early termination fees. Carriers will also return any activation fees consumers may have paid when they signed up for service.
The states began their investigation of wireless carriers in 2001.
“While this is an important step forward in giving cell-phone customers certain rights, we encourage states to approve consumer protections as the only real way to ensure against deceptive and harmful practices,” said Janee Briesemeister, director of EscapeCellHell.org, a project of Consumers Union, publisher of Consumer Reports. “The California Telecommunications Consumer Bill of Rights, for example, gives consumers a longer test-drive period and addresses other problems relating to contracts and billing.”
“Pretty darn unimpressive,” said Michael Shames, executive director of San Diego-based Utility Consumers’ Action Network. “The best that could be said about it was that it was an acknowledgement by the industry that it could no longer hide behind the shield of the friendly FCC-that it had to accede to state demands that it be more consumer-responsible.”
Shames noted some of the more pro-consumer states such as New York, Ohio, Pennsylvania, California, Minnesota and Washington were not parties to settlements with the three mobile-phone operators.
The three mobile-phone operators said they took steps to improve disclosure and business practices before settling with the states. One reason for that is, in recent years, some states on their own have taken action against mobile-phone operators outside the state attorneys general task force on the cellular industry. In addition, the cell-phone industry has adopted a voluntary code of conduct in response to suits by individual states and plaintiffs’ lawyers.
As such, Wednesday’s announcement of settlements between the 32 state attorneys general and the three wireless carriers was somewhat anti-climactic.
“Cingular recognizes the importance of consumer education and has been working voluntarily with the attorneys-general group for more than three years to promote this important industry issue,” said spokesman Clay Owen. “This announcement formalizes what Cingular has been doing for some time now to improve customer information. This year alone we are implementing a number of new services designed to help consumers make informed choices and more effectively manage their wireless service-including easy-to-understand information about rate plans, fees and network coverage.”
Verizon Wireless, whose service is regarded as the most reliable among the six national carriers, sought to put the settlement in a positive light. “Verizon Wireless either meets or exceeds these requirements,” said spokeswoman Nancy Stark. “We view these as minimum requirements that we hope raise the bar for the entire industry.”
Sprint Corp., parent firm of Sprint PCS, said it “does not agree that it has violated the law in any way, nor is this settlement an admission of wrongdoing.”
Cellular Telecommunications & Internet Association President and Chief Executive Officer Steve Largent questioned the necessity of the agreement.
“Today’s agreement is nearly a mirror to proactive practices the carriers are already following,” he said, adding that the three carriers and many others in industry are committed to the CTIA-sponsored Voluntary Consumer Code and must go through yearly compliance reviews.
