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Consumer Groups: Tell the Truth on Cell Phone, Internet Bills

What angers a cell phone or home Internet user more than just about anything else? Being lied to.

But that's just how many consumers feel about the billing practices of their cell phone and home Internet service providers, according to consumer and public interest groups in comments filed Wednesday to the Federal Communications Commission. Among other things, the groups have called for the agency to create a format across industries for service providers to clearly explain pricing schemes.They say the disclosures should prohibit wireless, cable television and Internet service providers from advertising base rates that don't include surcharges and fees that ultimately show up in the bill.

The comments were part of an FCC review of truth-in-billing practices. The problem of inaccurate advertising was highlighted during a recent report on the FCC's national broadband planning process, in which agency officials said more than half of the time, consumers were getting slower speeds than they paid for.

Joel Kelsey, a policy analyst at Consumers Union, a non-profit group associated with Consumer Reports magazine, said the biling frustrations for telecom customers begin at the point of sale and mushroom when the first bill arrives. Customers are offered a dizzying array of plans that are confusing for users. They may be sold a $99 plan for Internet, cable television and phone service but when the bill comes it may be around $115 after fees and surcharges are attached.

Kelsey complains that those fees and charges appear to be a company's way of recovering business expenses, such as number portability costs. These costs shouldn't be passed down to consumers, he says, but the practice is currently permitted by the FCC.

"It's very difficult for a consumer to make a wise decision in the marketplace because advertising is extremely misleading and there is so much noise with all the bundling packages and confusing options," Kelsey said.

By Cecilia Kang  |  October 15, 2009; 9:30 AM ET
 
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Comments

Comcast's so profitable, operating in their bubble, that they tried to buy Dsney, IN CASH.

Posted by: Max231 | October 15, 2009 11:08 AM | Report abuse

We're an ISP. We don't impose surcharges or hidden charges and don't hike bills after the customer is 6 months into a 1 year contract. And unlike any other provider we know of, we give even residential users a guaranteed minimum capacity. If they ever cannot get that much, we tell them, the should call us to fix it because something is broken.

Unfortunately, we've suffered for this. The cable and telephone companies offer "teaser" rates that go up after 6 months. Or they claim "up to" speeds that you might get during non-busy periods but will never get during rush hours. Customers compare those inflated numbers with our guaranteed ones, and many of them pick the inflated ones.

Consumers should know what they're getting, but the rules imposed upon providers shouldn't be Draconian. And providers should have the flexibility to innovate when it comes to pricing plans and to offer economical plans that carry certain reasonable restrictions (e.g. no servers on residential accounts). See http://www.brettglass.com/principles.pdf for a summary of what is reasonable.

Brett Glass
Owner and Founder, LARIAT
The world's first wireless ISP (WISP).

Posted by: squirma | October 15, 2009 11:09 AM | Report abuse

Not only we are not getting up the speed advertised, their list of charges and credits and date changes and billing cycle is SOOO complicated and confusing, that not only I know I am being lied to, but also I can't even figure out what the customer service is talking about to try and aruge that they have overcharged me. Verizon by far is horrible. I have the FIOS Triple Freedom bundle package, one CC told me that one of the services (I don't remember which one, phone, internet or TV) that its billing is 6 days behind the other 2 services. Try explaining that. This is toally ridiculous. And each CC will have a different explanation!!

Posted by: LYang39204 | October 15, 2009 3:04 PM | Report abuse

Brett, why don't you charge for usage? Normally it's 10% of users using 80% of bandwidth.

Charge more for heavier usage, and either you get more money to build more capacity, or they self-limit.

Demand is controlled by price. Give a flat price, you're likely to see infinite demand - and 90% of the users have to pay a lot more because 10% are not charged for what they use.

Posted by: VirginiaGal2 | October 16, 2009 7:56 AM | Report abuse

What a novel idea! It is a shame that the government has to get involved in order to make major companies stop lying to their customers.

Sooner or later someone will provide these services, deliver what they promise and charge what they advertise and the game will change.

Don

Posted by: dontsendnofarkingspam | October 16, 2009 10:53 AM | Report abuse

Comcast lied to my wife and me. They sold us 'unlimited internet' - but then later on cut us off for too much downloading. Specifically they told us to decrease the amount of data we were downloading - but they would not give us any quanitative amount of downloading that was allowed, or a way for us to meter the amount that we were downloading. To add insult to injury, when my wife inquired from Comcast about a 'professional' plan that we could sign up for, they gave her a phone number for a porn site. I hope the FCC really puts the screws to these crooks.

Posted by: boboran | October 16, 2009 4:35 PM | Report abuse

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