FCC Takes Aim at Wireless Industry Billing

May 27, 2010

Kenneth Corbin

The Federal Communications Commission is continuing its scrutiny of the wireless industry, offering a fresh batch of data points to make the case that carriers need to do more to clarify their billing practices and rein in fees and overage charges.

The survey highlighted two issues that have recently found themselves in the crosshairs of the FCC. It found that a large portion of mobile subscribers were in the dark about the early termination fees (ETF) carriers charge for canceling service before a contract before it expires, and that a significant number had experienced what the agency terms "bill shock," the unpleasant experience of opening the monthly bill to find steep overage fees for exceeding voice, text or data allotments.

"The wireless industry has achieved remarkable innovation -- and mobile is increasingly essential to the daily lives of Americans," FCC Chairman Julius Genachowski said in a statement. "But there is still more that can be done to help customers navigate what is sometimes a confusing marketplace."

According to the survey, one in six mobile subscribers, or 30 million, said they had experienced bill shock. Of those, 84 percent said their carriers had not notified them when they were approaching the limits of their plan.

As to the termination fees, of the 54 percent of subscribers who knew they would be subject to an ETF, 43 percent said the penalty would be at least $150, while 47 percent didn't know what the charge would be.

For the industry, the inquiry could lead the commission down a dark path, potentially resulting in regulation of the contractual terms they offer consumer and even enterprise wireless subscribers.

The survey is the latest indication of increasing scrutiny of the wireless sector at the FCC. Earlier this month, the