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Faster cellphones to bring a wave of new services and charges
The FCC is considering rules that require carriers to text or call users when they approach their voice and data limits. The regulation is aimed at avoiding "bill shock."
FCC Chairman Julius Genachowski said that even though carriers say they let users know how many minutes of talking and megabytes of data they use, mystery fees continue to confound consumers. Verizon Wireless recently agreed to pay $25 million in a settlement with the FCC on false data charges for 15 million subscribers. The federal agency estimates about 30 million cellphone users have experienced bill shock from sudden increases.
And Genachowski doubts that most people know how much data is consumed by watching an episode of "Mad Men," a recipe for even more confusion in the new world of ever-more-powerful smartphones and tablets that act like computers.
"Most people still don't know what a megabyte is," Genachowski said in a speech introducing the regulatory proposal. "So it's hard to expect them to know when they have reached their limits."
In a recent survey, the research arm of investment house Sanford C. Bernstein found that consumers were not happy with the idea of usage-based pricing plans.
"They're generally ill-equipped for any estimation of their usage and they are ill-equipped to judge its implications," Bernstein analyst Craig Moffett wrote. "Given the option, the vast majority of respondents would stay with their unlimited plans."
Sprint Nextel was the first to offer mobile broadband services, known as fourth-generation wireless. It is offered in 62 markets and only in unlimited plans, though chief executive Dan Hesse said he is watching competitors with tiered data plans.
The nation's largest carriers say they need to manage traffic with various offerings to prevent congestion. They tout more options for users and say tiered prices are more fair to those who don't use their phones for Internet access as much as others.
For now, Verizon Wireless and T-Mobile offer tiers of data packages and flat-rate plans. AT&T's customers can maintain their unlimited voice and data packages until the end of their contracts. Those customers will then have to choose from a menu of data plans.
"What we're trying to do is offer choice, and there will always be those that then say choices are too many. So you're darned if you do and darned if you don't," said John Walls, a spokesman for wireless industry trade group CTIA.