The wireless industry announced Monday plans to alert customers who are about to go over limits for voice, text and data services or incur international roaming fees, a move that will for now stave off regulation of their billing practices.
Under the plan, which will go into full effect April 17, 2013, nearly all cellphone customers will automatically begin to receive alerts for free, trade group CTIA announced at a news conference on Monday.
The industry-led plan comes amid rising consumer anger about cellphone billing surprises — a problem that has hit one in six users, according to the Federal Communications Commission.
A year ago, the chairman of the FCC proposed a mandatory rule for carriers to warn users of overage and roaming charges. Julius Genachowski said Monday he would put his proposal on hold because of the industry’s effort.
Genachowski’s decision was seen as a victory for the wireless industry, which has railed against the proposed rules. But it also raised fresh questions about how the agency would better protect consumers and enforce violations under the voluntary plan.
“This means very little in terms of real change for consumers,” said Joel Kelsey, a policy analyst at Free Press, a public interest group. He said some carriers are already offering alerts, and consumers won’t see much difference in how their billing complaints are handled at the FCC.
“Since competition is weak in this industry, there aren’t natural incentives for companies to be on their best behavior,” he said. “What they need is rules.”
Some consumers agree.
Nilofer Merchant, an author and business consultant from Los Gatos, Calif., said she racked up more than $10,000 in international roaming and overage fees when she used her data card on a business trip to Canada. She received two notifications from her carrier— but only after the session was over and her bill was on the way.
After she complained, her carrier waived all but $2,000 of the fees. She said wireless companies have little motivation to reform “broken” complaints systems because there is no government oversight.
When asked during the news conference how the FCC would monitor and enforce the industry’s efforts, Genachowski declined to give details, but said the agency has confidence in the wireless industry.
“We expect compliance. If not, we’ll take appropriate action . . . but neither of us think that will happen,” Genachowski said.
The industry plan comes amid greater confusion over billing. One in four Internet users access the Web through mobile devices. Most carriers have ended unlimited data plans, making it difficult for consumers to know when they are tripping monthly limits. And even though carriers offer data calculators on their Web sites and some send warnings, the way they implement their programs differ and can be confusing, some users say.
Genachowski gave several examples of how bad the problem can be. He said he met a woman who was charged $34,000 for international data and texting charges when visiting her sister in Haiti after the 2009 earthquake. Her service provider, T-Mobile, eventually scrapped the charges. He also said he met a man who was charged $18,000 when his free data downloads expired without warning.
“Today’s initiative is a perfect example of how government agencies and industries they regulate can work together under President Obama’s recent executive order directing federal agencies to consider whether new rules are necessary or would unnecessarily burden businesses and the economy,” CTIA president Steve Largent said.
Staff writer Hayley Tsukayama contributed to this report.