Democrats Rip into Wireless Carrier Practices

Dropped calls, censorship and deceptive bills top the list of lawmakers' complaints.

WASHINGTON-Lawmakers split sharply upon party lines Oct. 17 in their approach to improving U.S. wireless communications. The new majority of Democrats called for a host of regulations on wireless carriers while Republicans held steadfast to the concept of a light government touch.

Democrats at the Senate Commerce Committee hearing on consumer wireless issues praised the industry for its explosive growth, but complained of deceptive billing practices, cancellation fees, misleading coverage maps and dropped calls. Others questioned Verizons actions in rejecting text messages from a pro-abortion rights group in Sept., a decision it later reversed under public pressure.

Sen. Byron Dorgan (D-N.D.) even used the hearing to call for network neutrality laws, saying wireless carriers insistence on "locked" phones and limited software availability begged for congressional action.

Republicans contended that the problems were minor and that competition between the carriers would resolve the issues. GOP members of the panel even found a rare reason to praise former President Bill Clinton, lauding his administrations decision to limit government regulation of the wireless industry.

"One practice of deep concern to me is the explosion of deceptive charges that now appear on wireless bills," said Sen. Jay Rockefeller (D-W. Va.). "In the last few years, traditional and wireless carriers have concocted a number of line item charges, fees and surcharges."

Rockefeller added that the wireless industry is "literally passing the buck for ordinary operating costs and tax liabilities on to the consumer. Thats not right."

Sen. Amy Klobuchar (D-Minn.) said the rules written for wireless carriers almost two decades ago are outdated and "consumers often feel like their wireless providers have the upper hand and consumers enter into restrictive contracts without full information."

Rockefeller and Klobuchar are pushing the Cell Phone Consumer Empowerment Act of 2007, which targets early termination fees that are imposed on consumers who cancel their cell phone contracts. The legislation would require wireless carriers to provide clear information on their services and charges with customers before they enter into long-term contracts.

"This legislation is narrowly tailored to allow consumers to make true market-based decisions, based on the best price and quality of service-which is what the cell phone industry says it wants," Klobuchar said. "To do this, you need to be able to change carriers to get better service."


Click here to read about why House Democrats want telecommunications companies to disclose details of any access they have given to the National Security Agency.

Republicans, however, said Democrats were overreacting and overreaching. Sen. Jim DeMint (R-S.C.) called Rockefellers and Klobuchars legislation well-intended, but na???ve.

"[The bill] is likely to set back the wireless industry by many years," DeMint said. "We need to take a step back and let the wireless industry fix whatever problems there are."

Sen. John Sununu (R-N.H.) said he had not seen anything in the cellular carriers practices that would "warrant significant intervention in the marketplace."

The only industry executive asked to testify at the hearing, Lowell C. McAdam, CEO of Verizon Wireless, based in Basking Ridge, N.J., was quick to agree with the Republicans. "This legislation is not necessary," he said. "It could be harmful to consumers and slow down the industry."

McAdam pointed to Verizons decision to revoke its ill-fated text messaging decision and its prorated termination fees as examples of the carrier responding to the market. On Oct. 16, AT&T announced a similar fee plan. "We have put ultimate authority and power in the consumers hand," he said.

Klobuchar noted, "AT&T and Verizon comprise only about 55 percent of the market, meaning the other 45 percent or so of subscribers-or over 100 million Americans-may still be subject to these fees."

Minnesota Attorney General Lori Swanson said her constituents would say "Its about time" to efforts to increase regulations on wireless carriers.


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