Whose Job Is It? A Federal Bill Is Pending, but Some State Lawmakers Believe They Should Have a Role in Looking out for Consumers

By Boerner, Robert D. | State Legislatures, February 2009 | Go to article overview

Whose Job Is It? A Federal Bill Is Pending, but Some State Lawmakers Believe They Should Have a Role in Looking out for Consumers


Boerner, Robert D., State Legislatures


Walk into any airport or coffee house and you may find it hard to imagine a world without wireless telephones.

Today, nine out of 10 American adults--more than 262 million subscribers--own a cell phone, a 12 percent increase from 2006.

This enormous growth in the wireless industry poses a key challenge to lawmakers and other officials: Who should do the regulating? Oversight of the cell phone industry has opened a rift among states, the federal government and the cellular industry. Some lawmakers question whether states should be regulating the wireless industry at all and others see it as a straighforward consumer protection issue.

"For global communications, what we do not want is a hodgepodge of state laws," says Wisconsin Representative Phil Montgomery. He believes "the market has addressed many of the consumer issues. In fact, 98 percent of consumers can now choose from three or more carriers."

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But others think states have a role in ensuring a fair shake for consumers. Minnesota Senator Mary Olson introduced legislation in 2008--the Minnesota Wireless Telephone Consumer Protection Act--aimed at addressing consumer concerns with cell phone company practices.

"The wireless industry has become known for adding changes to bills without their customers' prior knowledge or consent," she says. "Appropriate regulations will ensure that customers are not unfairly surprised by charges on their bill. This seems like a no brainer, and certainly is no more than we expect from other industries."

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To date only Kentucky, Louisiana and the U.S. Virgin Islands have enacted wireless consumer protection laws.

The wireless industry, not surprisingly, wants to avoid a thicket of state laws requiring companies to operate differently in different states. Wireless companies want federal legislation that lays out a single set of rules, says Dane Snowden of CTIA, the wireless association.

"One set of consistent standards is good for the consumer," he says. "We also think it's good for the industry."

The industry has developed a 10-point voluntary consumer code that its members think address many of the key concerns: disclosure of exactly what the customer is getting, a trial period, itemized bills, prompt response to complaints and more.

State lawmakers say they've taken action, or at least discussed legislation, in part because the federal government has not. But a bill sponsored by U.S. Representative Edward J. Markey, chairman of the House Subcommittee on Telecommunications and the Internet, would preempt state laws in favor of a federal wireless consumer bill of rights. U.S. senators Mark Pryor of Arkansas and Amy Klobuchar of Minnesota also have introduced a wireless consumer protection bill.

CTIA's Snowden and other groups support national standards with enforcement in the hands of the states. "There is a role for states, and the state role should be through attorneys general."

CONSUMER BENEFITS

Americans are spending a lot on cell phones. According to the Bureau of Labor Statistics' Consumer Expenditure Survey, the yearly cost went from $210 in 2001 to $524 in 2006, an increase of 149 percent. A recent study of Internet leaders, analysts and others anticipate major technology advances as the wireless phone becomes a leading device for online access.

When it comes to regulation, whether at the state or federal level, the focus is on:

Towers: More telecommunications towers will be needed in the coming years to prevent dead zones (areas where there is no telephone signal) and dropped calls (calls that end without notice). But locating the towers can be controversial because of fears they will drive down property values, emit harmful radio waves and obstruct views. Co-location--where a tower company leases space on a cell tower to a wireless carrier--is an effective alternative to building new cell towers. …

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