Cell phones come with a price - a confusing regulation process
By Deb Kollars
Sacramento [CA] Bee Staff Writer
Published 2:15 am PST Sunday, February 13, 2005
In the space of just a few years, cellular telephones have shifted from
being a luxury to a routine necessity in many people's lives - as vital as
electricity or running water, as much a part of the monthly bill-paying
rhythm as groceries and garbage pickup.
But when there's a problem, good luck trying to appeal to a higher authority.
When it comes to the regulation of cell phones, consumers dwell in a
confusing Neverland, a place where state lawmakers point to the Public
Utilities Commission, and the PUC points to the Federal Communications
Commission in Washington D.C., and the FCC points back to the states.
Darting among the many pass-the-buck layers are the wireless companies,
which aggressively fight any and all government attempts to rein in their
industry. They believe competition and consumer choice in the marketplace
should be the regulator.
"For the consumer, there is no recourse. That's why we call it Cell Hell,"
said Janee Briesemeister, senior policy analyst for Consumers Union, the
nonprofit publisher of Consumer Reports, which is running the national
campaign "Escape Cell Hell."
To those in the business, it is a strange description, given the wireless
industry's phenomenal growth and popularity among people young and old.
Joe Farren, director of public affairs for CTIA, a wireless trade group in
Washington D.C., pointed out that the country now has 175 million wireless
subscribers, up from just 13 million in 1993. Most everywhere you go, he
and other wireless officials noted, you find people chatting on their cell
And now, with phones that can take pictures, deal poker hands and deliver
e-mail, the popularity just keeps rising.
"We don't agree there is massive customer dissatisfaction," Farren said.
"Just look at the number of subscribers."
In one sense, Farren is correct. People do love their cell phones. They are
handy. They can be fun. They let us do good things: conduct business,
report emergencies, reach those who are far away.
Dayna Kimball, who lives in Elk Grove, could be a voice for much of America
on this point: "If I tried to put my cell phone in a drawer and do without
it, I'd freak," she said last week. "I got hooked five years ago and I
could not exist without my cell phone."
And yet, listen to Kimball as she describes her frustration with her
cellular company, with which she has tangled over billing errors, broken
phones and even calls arriving on a stranger's cell phone:
"Oh my gosh! You don't even know!" she said. "I have dropped calls at least
six times a day. Most of the time I cannot talk on my cell phone at my
home. I have to go park up the street."
The litany of wireless complaints is as long as a cellular phone bill:
Dropped calls and bad connections. Unexpected fees. Confusing roaming
charges described in tiny print. Long waits on customer service lines.
Two-year contracts with huge cancellation fees. Phones that buzz, or break,
or in Kimball's experience, start smoking when plugged into a recharger.
In California and across the nation, people are calling for relief.
In recent years, wireless complaints to the California Public Utilities
Commission have risen steadily, according to Karen Dowd, manager of the
consumer affairs branch in San Francisco. Last year, the PUC received 9,017
calls or letters from unhappy cellular customers, up from 6,190 the year
Nationally, the Better Business Bureau announced last year that wireless
companies had generated 18,323 complaints the year before - second only to
In its annual cell phone survey, Consumer Reports in January reported
wireless consumer satisfaction remained lower than for nearly all other
services it rated.
Even the elderly, one of the last groups to embrace cell phone technology,
are fed up: AARP, the powerful lobbying group that represents older
Americans, recently launched a campaign for greater wireless oversight.
For AARP and other consumer groups, seeking cell relief from the government
has been a frustrating experience, not unlike the one many individuals face
when dialing the customer help number on their bills: It's hard to get
someone to answer, much less provide the assistance they need.
Part of the reason is the bifurcated way government has divvied up the
world of wireless.
The FCC has control over the airwaves used by cell companies, and through
Congress has been given jurisdiction over rates and market entry issues.
But the FCC has been hands-off with cellular pricing - preferring a
free-market approach where competition and consumer choice drive prices,
said Israel Balderas, an FCC spokesman.
"We really believe in a market-oriented approach," he said, pointing to the
FCC's decision to allow number portability - which took effect last year
despite industry objections - as a classic example of the philosophy.
"We said once the consumers owned their own numbers, they could walk with
their feet," Balderas said.
Congress has left all other "terms and conditions" issues, such as the
quality of customer service or cancellation fees, to the states. This,
Balderas noted, fits with the states' traditional role in regulating
In California, lawmakers have left wireless oversight to the Public
Utilities Commission, which regulates utilities such as phone and natural
"The PUC has the technical expertise, and it is easier to pass a regulation
than a law," explained Sen. Debra Bowen, D-Marina del Rey and former
chairwoman of the Senate committee on energy, utilities and communications.
It also may be easier to sideline a regulation at the PUC, consumers
Last May, the PUC passed the nation's first "Consumer Bill of Rights"
regulating the wireless industry. It would have required, among other
things, that consumers be given 30 days to cancel a cell plan from the date
of signing up. This was viewed as a victory for consumers, who often had
only two weeks.
Wireless firms complied with some of the new requirements, but complained
that others were untenable. One of their central arguments: That they are
nationwide companies, with national plans and billing systems, and should
not be held to varying standards in various states.
Last month, the PUC, which had a turnover in appointed members, put the
Consumer Bill of Rights on indefinite hold.
Wireless companies, politicians and individuals who favor the market-based
approach were pleased. Consumer advocates were furious. Bowen said she and
other elected leaders now are considering legislation to regulate wireless
firms in California.
In the meantime, if you are a consumer with a cellular complaint, you can
file it with the PUC and a staffer will try to mediate on your behalf with
the company in question. The process brings many positive resolutions, Dowd
said, but only for the complaints that get attention; the PUC has a backlog
of 17,000 complaints among all the utilities it oversees.
Generally, the PUC directs consumers to the FCC, she said.
"We let consumers know we don't have the teeth," Dowd said. "The FCC is
really the regulatory body for wireless complaints."
Yet filing with the FCC is mostly a futile exercise. The FCC logs
complaints and compiles periodic reports, reviewing them for egregious
cases that may, in rare instances, merit federal intervention. But the
agency does not help consumers resolve problems, nor forward the complaints
to the companies, Balderas said.
According to wireless representatives, the fuss over regulation is
unnecessary. Companies are working hard to fill dead zones with service,
create rate plans that offer more minutes and options, and strengthen
customer service, Farren said.
In 2004 alone, he said, wireless carriers invested $20 billion to improve
their networks nationwide. Verizon Wireless and Sprint Corp., the nation's
second-and third-largest carriers, respectively, recently reduced their
fees related to portability, charges that had irked many consumers.
Farren also pointed out that a recent J.D. Power and Associates study found
overall satisfaction with wireless providers improved 5 percent in 2003,
the first time a notable increase had turned up in three years.
Representatives from major carriers were eager to describe the network and
service improvements they are making.
Cingular, the nation's largest carrier since merging with AT&T Wireless,
switched to a 30-day trial period in November, and also began providing
customers detailed "sample bills" at the time they contract for service,
said Anne Marshall, Cingular's director of public relations.
"We want customers to be happy," Marshall said.
Likewise, Verizon began a 30-day cancellation option in California in
December, among other recent consumer improvements, Verizon spokeswoman
Barbara Curl said.
According to Paul Levinson, professor and chair of the Department of
Communication and Media Studies at Fordham University in New York, the
collective love-hate experience surrounding cell phones is part of a
profound pattern of change in our lives.
"We have a very powerful relationship with new technologies," said
Levinson, who last year published "Cell Phone: The Story of the World's
Most Mobile Medium and How It Has Transformed Everything."
"First, we are amazed by the miracle of it all," he said. "Then we find the
delivery less than perfect and grow frustrated. The issues are so deep, I
don't think any government agency can fix it."
If the issues seem tough now, people should hold tight to their flip
phones. The FCC soon will be wrestling with a new wireless war: whether to
allow cell phone use on airplanes now that new technologies have left in
question the necessity of the in-air ban for safety reasons.