FCC to propose "bill shock" regulations [Telecom]

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FCC to propose 'bill shock' regulations By Sara Jerome - 10/13/10 08:04 AM ET

The Federal Communications Commission (FCC) is expected to launch a proceeding at its Thursday meeting that could force wireless providers to change their billing practices.

The agency wants to prevent consumers from unknowingly racking up oversized bills on their phones when they go over their minutes, a situation the agency calls "bill shock." The agency released a survey earlier this year that showed one in six American consumers had been surprised by a cell phone bill.

The FCC's proposed rules would require carriers to send text or voice alerts before and when minutes are used up. Notifications would also have to accompany out-of-country charges, and carriers would be required to clearly disclose any tools they offer to simplify billing.

In a provision that is perhaps the most frightful to the mobile industry, the FCC plan asks for comment on whether all carriers should be required to offer the option of capping usage so that phone service shuts off when a certain limit is reached. The customer would set the limit, as the FCC sees it.

Sen. Tom Udall (D-N.M.) offered legislation on "bill shock" last month that proposes such a policy. He has written the FCC to support its separate effort.

Below is a Q-and-A with FCC Chairman Julius Genachowski about the agency's bill-shock plans. The remarks are condensed.

Q. The FCC cites some very sad stories about bill shock [such as the story of Kerfye Pierre, a 27-year-old Federal Emergency Management Agency employee in Hyattsville, Md., who received a $30,000 bill for texting and e-mailing in Haiti after the earthquake]. How representative do you think these stories are of the experiences American wireless customers have with their carriers?

A. Our survey showed that 30 million Americans -- one in six Americans -- have experienced "bill shock." According to our complaint data, [many] had additional charges of over $100. There's no question it's widespread.

Q. On the heels of the recently revealed investigation of Verizon's unwarranted overcharges, do you think we can expect to see more FCC investigations into wireless billing practices?

A. I can't talk about ongoing investigations.

Q. Is there still a role for Congress on this if the FCC passes bill-shock regulations?

A. Our job is to be a resource to Congress. ... [We have an] ongoing dialogue with members of Congress, and there is widespread interest in this issue because of the magnitude of the volume of consumer complaints.

Q. How much of a fight are you expecting from carriers?

A. We're focused on doing the right thing for consumers. ... [We're] honestly not focused on that.

Q. What is your sense of whether you have the support of the Republican commissioners?

A. You'd have to ask them.

Q. The FCC recommendations appear to [ask questions about a possible proposal, without calling for] providers to shut services to consumers who reach their limit, as Udall's bill does. Why aren't the FCC regulations as strong as the legislation?

A. We're going to ask for comment on a variety of things. We want to really empower consumers to make choices. ... I can't talk specifically about what's in the item.

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Thad Floryan
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