Who Should Regulate Cellphone Carriers?
There's a new Mr. Smith in the Metro station ads around town; this time he's a lobbyist for cellphone companies. (Check out the ad at http:\\www.mywireless.org.)
MyWireless.org is a non-profit bankrolled by the wireless industry and the ads try to persuade consumers they would be better off with a "national wireless policy." Why now? Because there's a Senate bill that is pending on the Hill that would switch wireless regulatory authority from the states to the federal government.
"The freedom, choice and value wireless consumers enjoy today are threatened," the group's Web site says, because "a confusing tangle of costly wireless regulations and taxes."
"If wireless is ruled by 50 different sets of state laws and regulations, consumers can expect less innovation, fewer choices among services and providers, and higher prices," the Web site continue.
Just like your wireless bill, though, the rest of the story is in the fine print.
Today, the Federal Communications Commission regulates cellphone carrier rates. The terms and conditions of cellphone contracts, however, fall under state jurisdiction.
States such as Minnesota have used that authority to try and stop carriers from unilaterally changing rates without affirmative consent from their customer. Other states have prohibited wireless companies from listing misleading charges on cellphone bills.
Consumers Union, Consumer Federation of America, AARP and U.S. PIRG object to the bill, saying the wireless industry is just trying to end run consumers by superseding tougher state and local regulators with weaker oversight by the FCC. The Senate bill is not likely to pass before the election recess, but it may have a better shot during a lame duck session.
The Hill is not the only front in the wireless industry's fight against state regulation. The industry is fighting class-action lawsuits filed on behalf of consumers in several states that challenge early termination fees. The wireless industry claims early termination fees are really rates, and thus, none of the states' business. It also has asked the Federal Communications Commission to rule that early termination fees are rates. If the FCC goes along with the industry, those lawsuits will be moot and consumers will not be able to challenge wireless carriers under state laws.
This movie isn't over yet. Perhaps in this version, as in the original, Mr. Smith ends up "lookin' out for the other fella." Stay tuned.
Do you think states should be allowed to regulate terms and conditions of cellphone contracts? Or do they just muck it up for everyone? Share your thoughts, please.
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