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Cell Phone Bills
Date: Mar 11, 2005
Contributor: Benita Gehringer
FCC rule seeks clarity on cell phone bills
Federal regulators took steps Thursday to clarify confusing and misleading charges on cell phone bills, though critics say the move will actually harm consumers by pre-empting tougher state regulations.
Wireless carriers can no longer disguise certain business costs as government fees and must explain line-item charges in plain language, the Federal Communications Commission ruled.
Last year, the National Association of State Utility Consumer Advocates complained to the FCC that wireless companies often tack obscure charges on bills, such as "regulatory cost recovery" fees.
Consumers have no way to know whether such fees combine a variety of government-mandated taxes and charges or cover a carrier's lobbying expenses, corporate taxes or other costs, the association's Patrick Pearlman says.
Under the FCC's "truth-in-billing" ruling, such items must be clearly labeled, and a carrier that imposes a regulatory fee can collect only the amount authorized by the government.
Long-distance companies were already subject to similar rules, but wireless carriers were exempt.
In recent years, cell phone companies have tagged a variety of mandated charges onto bills. Those charges cover, among other things, full-featured wireless 911 service and new technology to let consumers keep a phone number when switching cell phone carriers.
The state utility consumer advocates had asked the FCC to go further. Under its proposal, carriers would not only have to provide clear descriptions of line items, they also would be required to include certain administrative expenses in their base monthly rate rather than listing them separately.
Consumer advocates criticized the FCC's decision to pre-empt potentially tougher billing rules that are being considered by some states, such as California, Connecticut, Georgia and Illinois.
In his final meeting as FCC chairman, Michael Powell, a Republican, said that because wireless is an interstate service, it would not be "sustainable to have a multitude of divergent, and at times, intrusive, state-by-state billing regulations."
cell phone companies say a patchwork of rules across the USA could prevent them from advertising national rates.
"State boundaries don't reflect the way wireless service is provided," says Michael Altschulof wireless industry group CTIA.
The FCC cited federal law that bars states from regulating wireless rates. But Michael Copps, a Democratic commissioner, says Congress specifically allowed states to regulate billing practices.
The state pre-emption led Copps and Democrat Jonathan Adelstein to partly dissent from the ruling.
The FCC hasn't enforced billing rules on long-distance companies despite thousands of complaints, Copps says, adding states are better equipped to police their regions. "We are very likely doing more harm than good here," he says.
The FCC also proposed that carriers be required to disclose the full rate, including separate line items, to consumers when they purchase service.
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