Wireless Consumer Protection


Good news out of D.C. in regards to creating legislation on many of the mobile industry issues that we so painfully have to deal with on a regular basis. They seem to have this right when you look at what has transpired so far. Here are a few examples:

Why does a customer of the wireless companies who gets no subsidy on a phone still get stuck with a $175 early termination penalty?

We’ll call this the “iPhone problem.” Wireless carriers say consumers are getting huge subsidies, and as a result they’re forced to charge consumers early termination penalties. But we see consumers who get no subsidies still being charged the full penalty, such as iPhone purchasers or customers who bring their own phones—and we don’t see any accounting whatsoever about the real benefits consumers get. We’re concerned that those benefits are lower than companies claim.

But it’s the cost to the consumer that matters, and U.S. consumers pay more—an average of $506 each year, higher than the average of $439, and way above countries such as Sweden ($246), Spain ($293), and Germany ($371).

The bill would require carriers to sell contract-free phones, provide rate plan information in a “clear, plain, and conspicuous manner,” disclose any phone subsidies hidden in the plan’s price, and offer price-comparable plans with no subsidy or early termination fee.

U.S. Commerce Link