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bill shock

FCC Aims to Expand Consumer Welfare

in Broadband Updates/Broadband's Impact/FCC/International/National Broadband Plan by

WASHINGTON, October 15, 2010 – The recent Federal Communications Commission recent open meeting looked to progress the chairman’s goal of improving consumer welfare. The issues spanned the range of the FCC’s authority from cable to broadband and mobile telephony.

One of the long-term goals of the FCC has been to increase competition among the set-top box market. The market has inherent problems since most individuals often rent the boxes from their television provider rather than purchasing a third-party box. While the FCC has mandated that cable/satellite providers give users cable cards to insert into their choice of boxes, the companies often charge installation and rental fees on the cards. Today’s order sought to increase the use of cable cards.

Consumers will now be able to install their own cable cards rather than having to pay for installation from the cable company. Additionally. cable companies will have to limit the amount they subsidize their set top boxes. See yesterday’s story on BroadbandBreakfast.com.

One of the more exciting provisions is “streamlining requirements for manufacturers who build CableCARD devices.” This provision will allow manufacturers to more easily integrate cable cards into their set top boxes. Currently there are a number of internet enabled set top boxes which allow users to directly stream content from the web but they all lack a cable card slot.

Public Knowledge responded to the order with this comment: “Now, consumers will be able to install their own CableCard s provided that manufacturers include instructions and, importantly, the commission will limit the ability of cable systems to subsidize their own boxes with service costs, which puts competitive devices at a disadvantage.”

The National Cable & Telecommunications Association also supported the order; “We agree with the Commission that implementing these changes – including increasing options for self-installation, providing more transparency and properly equipping technicians – will assist customers who use retail devices that rely on cable cards. Our industry will work diligently to implement these changes. We also will continue working constructively with TiVo and other providers of retail ‘cable ready’ products to assure that our mutual customers can seamlessly enjoy all of the cable services available to them. “

The FCC also issued a notice of public rulemaking on bill shock that looks to simplify mobile phone billing. The commission is troubled by the fact that often consumers are charged large overage fees. “The FCC’s proposed rules would require customer notification, such as voice or text alerts, when the customer approaches and reaches monthly limits that will result in overage charges.” Customers would also have to be notified when they leave the country if they will be charged a higher fee.

FCC Chairman Julius Genachowski said, “I know that some will argue this is unnecessary or burdensome. But consider what I heard yesterday from a business executive. He said that a couple of months ago he had incurred $2,000 in extra data charges while on a trip overseas. Despite buying an “international plan” – he was billed for “more than 15 times what I had expected to pay.” He said: “It took hiring a lawyer to get the charges waived – cost me almost as much as the charges, but I did it for the principle. Most Americans would not have this luxury.”

The last notice of proposed rulemaking which was adopted was on the mobility fund. This fund was proposed in the National Broadband Plan and would provide Universal Service Fund to help expand 3G wireless services. The cost of installing wireless is much lower than fixed lines. The notice proposes using $100 million to $300 million from the USF.

It also suggests the use of reverse auctions. “To use a reverse auction – in which the potential providers of services in identified areas without 3G service compete for support from the Mobility Fund by proposing the lowest amount of USF support they would require to serve areas that are currently unserved – to determine which providers get support, which specific geographic areas will receive support, and at what levels.”

Reverse auctions for wireless service have been successfully applied in other nations such as India and Peru but they have faced serious problems. The main difference between success and failure is if an existing provider is in the area. When there is already, an incumbent they are able to decrease costs much lower than any new entrant.

Commissioner Michael Copps supported the NPRM and relayed the following story: “The new Mobility Fund will provide a much-needed down payment on closing America’s digital divide. We’ve got a ways to go. That was brought home to me over the past couple of weeks as my wife and I vacationed in China. Even as we toured the treasures of Chinese antiquity, like the Great Wall, the Terra Cotta warriors and the Forbidden City, we also were able to take advantage of some pretty impressive telecommunications technology. We sailed down the Yangtze River, surrounded on both sides by mountains, and as we floated down those long and beautiful river valleys, I was almost never without 3G service. The sight of that 3G signal along the top of my BlackBerry screen almost everywhere we went on our trip made quite an impression on me. I dare say there are many places in the United States—and they’re not just river valleys, either—where I wouldn’t find that kind of service. That’s one example of why moving ahead with a Mobility Fund and comprehensive USF reform is so important”

Most Consumers Report ‘Bill Shock,’ FCC Plans Action

in FCC/Mobile Broadband/Wireless by

WASHINGTON, October 14, 2010 – It’s not a surprise that “bill shock” is a problem. The Federal Communications Commission on Wednesday released a white paper on complaints it has received on the issue, which addresses a sudden, unexpected increase in a monthly mobile phone bill, even when a customer had not changed service plans.

Bill shock may come from unexpected international roaming charges, exceeding data plan limits, taxes and other fees that a consumer unwittingly accrues.

The FCC found that:

*764 people complained to the FCC about bill shock in the first half of 2010;
*67 percent of those complained about amounts of $100 or more; and
*20 percent had complaints of $1,000 or more.

The largest complaint received during this time was for $68,505.

The new data and white paper follows an FCC survey that was released in May showing an estimated 30 million Americans had experienced some kind of bill shock.

FCC Chairman Julius Genachowski said the agency would hold a public forum on unexpected phone charges and related issues, which will include consumers and consumer groups, industry representatives, and technology experts.

“It is a very difficult time in our economy. Millions of Americans are struggling to get by — and even a small, unexpected fee can make a big difference,” said Genachowski. “Now, more than ever, we need to make sure consumers aren’t being charged for more than what they signed up for, and that they have the information they need to make the best decisions for their families.”

Wireless association CTIA weighed in on the news, saying: “We agree with the FCC that the goal is to keep all customers happy, but we are concerned that prescriptive and costly rules that limit the creative offerings and competitive nature of the industry may threaten to offset these positive trends. We look forward to continuing to innovate and meet the needs and demands of our 292.8 million customers.”

More information on the FCC’s work on bill shock is available at http://www.fcc.gov/cgb/billshock/.

FCC Consumer Advisory Group Discusses Spectrum, Bill Shock and More

in Broadband Updates/Broadband's Impact/FCC/National Broadband Plan by

WASHINGTON, July 1, 2010 – The Consumer Advisory Committee meeting at the Federal Communications Commission Wednesday covered a range of issues, including white space spectrum usage, National Broadband Plan implementation concerns, and broadband accessibility to tribal lands and people with disabilities.

Karen Peltz Strauss, deputy bureau chief in the Consumer and Governmental Affairs Bureau (CGB), led the accessibility and innovation forum. She focused upon relay services that would make the internet, particularly online videos, accessible to people with disabilities. Strauss also reported on problems that people with disabilities experience with mobile phones, and overviewed some discussion groups working to provide solutions.

Both Strauss and Elizabeth Lyle, who works with the Wireless Telecommunications Bureau, advocated a national registry that would allow consumers to learn who are the internet and mobile broadband distributors. Lyle focused on outreach and communication with consumers with complaints through online and in-person forums. She said, “We’re going to need a lot of help from those in the private sector” to identify and provide solutions for broadband accessibility issues.

Yul Kwon, deputy bureau chief in CGB, provided an update on several of the bureau’s recent activities. He said they were in the process of testing broadband speeds, and that they are preparing to begin specifically testing mobile broadband speeds.

He also spoke about CGB’s education efforts for Americans traveling overseas. Many consumers do not research the extra mobile phone costs before traveling and incur expensive and unexpected phone bills. Kwon said the bureau distributed tip sheets about mobile use overseas at Dulles Airport. During the distribution, he said it was clear that most travelers had not even considered a possible extra expense.

Kwon also updated the committee on the developing FCC Native Nations outreach office, and lauded Geoffrey Blackwell’s appointment to head the program. He said “We’re excited to move forward on broadband access to tribal lands. With a dedicated staff and an office, we will be able to work out solutions for broadband access for Native Americans.”

FCC Commissioner Robert McDowell urged the committee to continue to do what is best for the consumers. He said “our mission is to provide consumers with choices for competition, which is the best way to protect their interests.” He advocated rekindling action in regards to white spaces action.

He said the FCC took a “large step and a baby step” in ruling that unlicensed devices may use empty white spaces in the frequency spectrum. McDowell said they had approved the concept of a prototype, but left a lot of questions as well. He said it was his vision that in a year-and-a-half, during the holiday season, there would be devices outfitted to use white spaces on store shelves.

Karen Johnson, with CGB, provided data about bill shock, the experience a consumer has upon receiving an expensive and unexpected bill, usually due to exceeding preset calling minutes or text message limits. The European Union requires default notifications from providers that tell consumers, via text message, how close they are to exceeding limits. She proposed looking at providers in the United States to see if any have similar policies.

Johnson also presented the results of an FCC mobile survey that looked at customer experience. Twenty-three percent of those who reported experiencing bill shock said their bill for a month had been over $100. Consumers also reported issues with early termination fees, with 48 percent saying their providers charge a fee exceeding $150.

The same survey found that 91 percent of home internet subscribers were satisfied with their broadband speeds. However, 71 percent of men and 90 percent of women had no idea what their actual connection speed was, which Johnson called “a peculiar disconnect.”

Irene Flannery, with the Telecommunications Access Policy Division, Wireline Competition Bureau, talked about shifting the Universal Service Fund to support the Lifeline and Link-up programs helping underserved households afford the installation and bills for phone service. The National Broadband Plan recommends expanding the service to broadband applications, especially for people who could depend upon broadband as a primary means of communication.

Lawrence Daniels presented the Consumer Protection Working Group’s recommendations. He spoke of a potential product or service that will provide consumers with the information they need before they purchase a broadband subscription, computer, phone, or other device that is internet-connected. He sought input from the committee on the best way to balance giving basic information to consumers and inundating them with too much data.

The Broadband Working Group presented recommendations as well. Group member Lew Craig said their group has focused on shifting Lifeline and Link-up programs from wireline to wireless service. They advocated having discounts that apply to wireless the same way that it applies to wired service. The committee discussed the costs of making the transition, and agreed to seek out possible cost solutions. They also recommended that basic calling service should never be cut off from a consumer, even if the consumer is unable to pay for other mobile applications.

Phoebe Yang gave an overview of the National Broadband Plan and its current implementation status. Yang, the senior advisor to the chairman on broadband in the Office of Strategic Planning and Policy Analysis, showed the specific parts of the plan that would apply to adoption and other issues of interest to the committee.

FCC Looks To Temper Consumer ‘Bill Shock’

in Broadband Updates/Broadband's Impact/FCC/Wireless by

WASHINGTON, May 25, 2010 – The Federal Communications Commission’s Consumer and Governmental Affairs Bureau launched an initiative this month aiming to prevent the unpleasant experience of getting an unexpectedly high wireless phone bill.

This experience, referred to as bill shock, is something the agency wants to help Americans avoid, and is seeking input on ways to alert consumers about potential high charges before they add up.

This is one of the first initiatives undertaken by the bureau’s Consumer Task Force, which launched in January.

Joel Gurin, chief of that FCC bureau, said:“We’ve gotten hundreds of complaints about bill shock, but this is an avoidable problem. Avoiding bill shock is good for consumers and ultimately good business for wireless carriers as well.”

The idea is to compile ideas from consumers on how to avoid bill shock, and compare it to the current European model.

The European Union adopted regulations in June 2009 to govern the transparency of retail roaming charges. The provisions ensure that the customer is made aware of the charges for roaming and other services through automatic notification provided free of charge by the carrier.

Gurin cited some examples of bill shock contained in the FCC call center’s files. Disgruntled customers complained of overage charges, changing contracts and misleading advertising. All of these are common complaints of U.S. mobile users.

Besides seeking input, there were tips given to avoid bill shock in lieu of legislation. The tips included reviewing cell-phone usage, understanding the plan and other ways to identify costs in a consumer’s mobile plan.

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