To counter declining competition and convoluted contract rules in the wireless communication industry, Sen. Jarrett Barrios (D-Cambridge) and consumer rights advocates pushed lawmakers at the State House to adopt a measure that would establish a bill of rights for cell phone users.
The purpose of the bill, according to Barrios, is to promote competition by providing consumers with basic information regarding contracts, service and billing. The additional information will give consumers more freedom to choose providers, Barrios said at the Tuesday hearing.
“The easier and clearer the information is made for consumers, the better the companies will respond with service delivery,” he said. The bill’s advocates said early termination fees for ending contracts harshly penalize customers.
Deidre Cummings, consumer program director for the nonpartisan and nonprofit Massachusetts Public Interest Group, said 47 percent of consumers recently polled by MASSPIRG said they would have considered switching companies if not for the early termination fee.
The bill proposes to limit service contracts to one year and offer a risk-free trial period, which would give consumers a limited time to cancel their contracts without paying a termination fee. It would also make sure cell phone bills list all charges clearly.
According to Cummings, complaints to the Federal Communications Commission have increased 92 percent over the last two years.
“Past attempts by the FCC to impose regulations had been postponed until the business got up on its feet — and it has,” Cummings said. “The industry is up and going and doing well. Now it is time to look at the consumer.”
Recent consolidations in the cell phone industry — for example, the merger between Sprint and Nextel — have left four companies representing 80 percent of the wireless market. Consequently, the industry has seen an increase in prices and a decline in competition, Cummings said.
Many consumers have also been complaining about company billing errors.
According to a survey conducted in March, only 57 percent of consumers in the Commonwealth were completely satisfied, Cummings said.
“However, 42 percent of the consumers reported having a billing error with their provider, and 68 percent reported dropped calls and other quality problems,” she added.
Cummings pushed for the creation of a standardized process of dealing with costumer disputes.
“The only option customers have when dealing with claims is to return to the company that mis-billed them,” Cummings said. “Then, their only option is to pay $200 to get out of their contracts.”
Representatives from different wireless services, including Cingular Wireless, Sprint, T-Mobile and Verizon Wireless, defended themselves against claims that the companies provided poor customer service.
“The lifeblood of the wireless industry is a satisfied costumer,” said Jamie Hastings, director of government affairs for T-Mobile. “The last thing we want is to trap the customer and not service them properly.”
Hastings explained that the wireless industry was experiencing a decrease in the number of new customers, making old customers that much more important. Today, the wireless industry services 190 million customers in the United States, including more than 4 million in Massachusetts.
Hastings further explained that customers are not required to sign contracts for wireless service, offering an alternative that avoids early termination fees.
“We offer pay-as-you-go phones with no contract plans,” Hastings said. “The customer purchases the amount of minutes they wish — no contracts — and we provide them with service.”
