WASHINGTON-The mobile-phone industry proposed a national framework for wireless billing based on its voluntary code of conduct for service, while consumer groups and states are urging the Federal Communications Commission to strengthen billing rules and to refrain from pre-empting state regulation of carrier billing practices.
The billing debate is a spillover from an FCC ruling in March in which the agency extended truth-in-billing rules to mobile-phone carriers, but rejected a consumer group’s request to ban line-item regulatory recovery fees charged by wireless operators. The regulatory recovery fees were passed on to consumers to offset the cost of local number portability, enhanced 911 and universal service fund contributions, and other federal mandates.
In the March decision-which is being challenged in the 11th U.S Circuit Court of Appeals in Atlanta-the FCC also pre-empted state regulation of line-item charges.
In a follow-up proceeding, the FCC tentatively concluded inconsistent state regulation of carrier-specific truth-in-billing rules also should be pre-empted. The agency will review public comment on broadening pre-emption and other issues not resolved in the decision of earlier this year.
“The wireless industry recognizes and supports the commission’s belief that consumers be entitled to clear and non-misleading customer billing information. That is why a year-and-a-half ago, the industry stepped up to the plate and adopted the Consumer Code for Wireless Service, ensuring wireless consumers are the best-informed, most-knowledgeable consumers when it comes to their service and rate plans,” said Steve Largent, president of CTIA, the national cell-phone association. “CTIA formally asks, for the first time, that the commission provide all consumers a single set of billing regulations and a single place where those regulations can be enforced, the FCC.”
Meantime, consumer groups, disability advocates and state attorneys general are pushing federal regulators to beef up telecom billing rules to help reduce confusion and safeguard against abuses. In addition, the groups are fighting to keep state oversight of carrier billing.
“Only stronger billing rules will reduce consumer confusion and provide increased protections against misleading charges,” said John Perkins, president of the National Association of State Utility Consumer Advocates and consumer proponent for the state of Iowa. “Consumer advocates have presented the FCC with constructive recommendations on how to improve and enforce the standards needed to provide customers with accurate and truthful information. We hope the FCC will use our suggestions as an opportunity to make much-needed improvements to increasingly complex telephone bills.”
NASUCA and the Vermont Public Service Board want the 11th Circuit to overturn the FCC’s March truth-in-billing decision. Briefing in the appeal is scheduled to begin in September.
The stakes are huge for mobile-phone operators, which have been tagged with numerous billing lawsuits around the country in recent years, and for the states. The states risk seeing their oversight of wireless carriers further eroded. In 1993, Congress pre-empted state regulation of wireless rates and market entry, but left to states “other terms and conditions.” California and other states are testing the limits of that clause.
“The actions taken by the FCC thus far do not resolve our fundamental concerns over misleading and deceptive charges,” said Patrick Pearlman of the West Virginia Consumer Advocate Division. “On behalf of our nation’s consumers, we hope that the billing rules can be strengthened to eliminate some of customers’ existing confusion. However, stronger rules should not come at the expense of states losing their authority to protect residents from deceptive billing practices.”
State attorneys generals from around the country asked the FCC that it allow only two broad categories of charges on telecom bills: prices and taxes/regulatory fees.
At the same time, state officials want the federal regulators to ban wireless service providers from imposing a third category of fees they call “carrier add-on charges.”
“The practice of adding line items to consumers’ bills for carrier add-on charges is causing widespread confusion in the marketplace and frustrating the goal of fair competition since it is virtually impossible for consumers to compare prices among service providers. Such prohibition will benefit consumers, who will better understand how their bills relate to disclosed prices, taxes and regulatory fees,” the state attorneys general told the FCC.
