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FCC Will Tackle Cell Phone 'Bill Shock' 477

Posted by samzenpus
from the light-in-a-sea-of-darkness dept.
MexiCali59 writes "The 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."
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FCC Will Tackle Cell Phone 'Bill Shock'

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  • All you can eat (Score:5, Insightful)

    by Jonah Hex (651948) <hexdotms@@@gmail...com> on Wednesday October 13, 2010 @02:38PM (#33885572) Homepage Journal

    I was forced to switch from one of Sprint's discontinued "Family Plans" to an everything plan in order to get a modern phone a few years ago, and now that I've got an even nicer phone that sucks down more data, I wouldn't be surprised if they discontinue this plan too. Maybe the FCC can keep things semi reasonable, instead of letting things get even worse.

    HEX

  • Re:Or... (Score:3, Insightful)

    by kobaz (107760) on Wednesday October 13, 2010 @02:39PM (#33885592)

    Or they could get a plan with unlimited texting.

  • Re:Really? (Score:0, Insightful)

    by Anonymous Coward on Wednesday October 13, 2010 @02:40PM (#33885618)

    Shut up.

  • by alen (225700) on Wednesday October 13, 2010 @02:44PM (#33885674)

    because if they were free then spammers would come in and clog up the data channel with constant texting. since you have to pay for incomming texts it's illegal to spam you via cell

  • Re:Really? (Score:3, Insightful)

    by Surt (22457) on Wednesday October 13, 2010 @02:47PM (#33885728) Homepage Journal

    I've had all 3 of the major carriers over the years, and have yet to have easy access to a minutes check feature.

  • by immakiku (777365) on Wednesday October 13, 2010 @02:49PM (#33885752)

    Because the nature of the business (high barriers to entry, mainly) ensures we have a limited selection of carriers. Limited selection means less competition means less competitive practices, like charging for random "services" like text messages even if the "services" should come for free as part of the protocol.

  • by mykos (1627575) on Wednesday October 13, 2010 @02:51PM (#33885798)
    I don't know if the solution to screwing customers out of their money is to force them to spend even more money as "screwing insurance". Why would it be so hard to make going over an "opt-in" instead of the default? Most major carriers won't even give you the option not to go over.
  • by Zero__Kelvin (151819) on Wednesday October 13, 2010 @02:51PM (#33885802) Homepage

    "People could pay attention to the fact that they send 500 text messages in a single day."

    The problem isn't that people sometimes go over, it is that they are charged a ridiculous amount more when they do. I have a USB 3G Modem with a 5 Gig limit which I watched quite carefully. When I knowingly went over just a few hundred megabytes my bill went from $50.00 to $750.00. Now luckily, I was able to convince an upper level rep that I could have rooted my phone and tethered it, but I chose to get the 3G stick to be fair and make sure they received a reasonable amount of compensation for services provided. Until I laid this on them they absolutely were not going to budge at all. I am very much the exception, as obviously the average customer doesn't even understand what I just wrote, so they would have been just straight screwed.

    This is of course ridiculous. Now I admit that I could have perused my contract more fully, but my provider has always been quite reasonable so - having a 7 year relationship with them - I trusted that my contract would also be reasonable. Also, bear in mind that most people don't grok the difference between 5 gigabytes and 300 Megabytes, so the whole "people should pay attention to the contract" argument is flatly absurd.

    The bottom line? There should definately be a law against charging multiple orders of magnitude more for overages. There is absolutely no reason why they cannot pro-rate the overage at a reasonable increase (say 50%) and they absolutely count on peoples ignorance to jerk them around.

  • Re:Really? (Score:4, Insightful)

    by Surt (22457) on Wednesday October 13, 2010 @02:53PM (#33885840) Homepage Journal

    Yeah, a website definitely does not qualify as easy, particularly with my non-web-enabled phone. The #MIN thing is closer, though. I suppose I could remember that, or program it on one of my speed dials, then try to remember to check once a day or something. It sure would be nicer if I didn't have to be proactive on yet one more thing in life, though.

  • by mykos (1627575) on Wednesday October 13, 2010 @02:55PM (#33885872)
    We don't want the government to decide what they can and can't charge. We just want the government to require going over to be something you have to consciously opt in to do.

    My carrier won't do it. I asked them if I could block data if I have no data plan, seeing as how they made the default internet button right in the center of my phone (and it sticks out the most). They said no. I suspect most other peoples' carriers won't, either.
  • by Surt (22457) on Wednesday October 13, 2010 @02:55PM (#33885882) Homepage Journal

    So that would be an unlimited plan, priced at $500, right?

    Overpriced. Every carrier will sell you an unlimited plan for less.

  • Re:Why stop there? (Score:3, Insightful)

    by sjames (1099) on Wednesday October 13, 2010 @02:56PM (#33885902) Homepage

    When it becomes possible for you to accidentally eat and drink without even knowing you are doing it, they might consider that. If restaurants start making fake carrot sticks indistinguishable from the natural vegetable except that they have 9000 calories each, there WILL be a law about it.

  • by Da_Biz (267075) on Wednesday October 13, 2010 @02:59PM (#33885940)

    The first comment is, to me, the most interesting response:
    Sounds like we're once again legislating to save irresponsible people from their own self-destructive actions.

    This response is a dramatic oversimplification of what's going on (sadly, a common occurance). What I believe the FCC is proposing is ensuring that _reasonable_ and _prudent_ laypeople can clearly understand the cost consequences of their actions. And, allowing a customer to set a reasonable price cap on their cell phone spending _increases_ accountability--for costs that match their spending ability.

    For example, the cost of your garden variety LOL or ROFL missive sent via text message while roaming in Cancun (phone from Sprint [USA]) was about $1. For some, this can become frighteningly expensive. Given that European pay-as-you-go service carefully tracks (and easily reports to the user via a simple text message) their remaining credits, I fail to see why this reasonable ability isn't available to everyone.

    And, as someone who has done disaster relief, I have been surprised by a few increases of $40-50 for roaming charges. I am willing to pay this--but I also desire the ability to know up front. I don't think the end user should have to carry their carrier's Terms and Conditions and rate sheet in their back pocket.

    Also, some of these cell phone contracts are ludicrous: even the better ones (I like AT&T) don't do a great job clearly delineating between different types of service (for example, my unlimited SMS messaging plan doesn't include picture messaging). If I, as a person who reads contracts as a part of their job, can accidentally miss this, this circumstance doesn't bode well for an average person who doesn't do this.

    Accountability requires reasonable rules and transparency--US cell contracts and bills need some help on this front.

  • by scrib (1277042) on Wednesday October 13, 2010 @03:02PM (#33886008)

    I was looking for this post because I wanted to make it. :)

    I was thinking that a mandatory user-definable bill-cap would a good way to go with this. The default would be set at, oh, 50% more than your no-extra-charges bill. You would have the option of raising your cap permanently or temporarily.

    Your phone would just say "You have reached your pre-set spending limit. You must raise this limit before any further additional fee services will be available from this phone."

    How hard is that?

  • Re:Why stop there? (Score:5, Insightful)

    by BJ_Covert_Action (1499847) on Wednesday October 13, 2010 @03:08PM (#33886096) Homepage Journal
    I'd rather see the government mandate a fee against people that make stupid, nonequivalent analogies.
  • Re:All you can eat (Score:3, Insightful)

    by Da_Biz (267075) on Wednesday October 13, 2010 @03:08PM (#33886100)

    Intelligent markets driven by reasonable regulations IS the freest market we can muster.

    For example, the Enron debacle in California was caused, in part, because of a lack of transparency pertaining to how their operated their generators. This produced congestion on transmission network paths needed to deliver power to California from the Pacific NW. IIRC, this caused prices to spike up to $1,000 per MW/hour (maybe more), when typical prices are more in the $40-80 range.

    Enron accomplished this because they were able to succesfully hide from market participants their actions--and tossed out decades of generally accepted operational practice (aka "Good Utility Practice"). Ostensibly, this is NOT the Free Market that someone like Adam Smith would envision. Yes, we can't legislate every single aspect of behavior (hence, "Good Utility Practice"), but this should not diminish the supreme importance of creating sensible regulation.

  • Re:just say no (Score:3, Insightful)

    by Da_Biz (267075) on Wednesday October 13, 2010 @03:12PM (#33886146)

    This ABSOLUTELY does not work with Sprint (and precipitated my departure). After hours of being on the phone with their so-called customer service (and three defective "warranty replacement" phones in the mail), I pleaded with folks at a retail location to help. Sadly, they were absolutely powerless to help--and felt horrible. Everything had to go to a completely worthless call center...

  • Re:Why stop there? (Score:5, Insightful)

    by Rob the Bold (788862) on Wednesday October 13, 2010 @03:14PM (#33886188)

    So You the customer signed a contract with the cell phone company. You agree to a certain amount of minutes at a certain rate plus additional fees should you go over those minutes. You use your phone. You go over the minutes. But when the cell phone company sends you a bill it's stealing? Don't you have the ability to track the amount of minutes as the month goes by? Even if you don't that's not exactly the cell phone companies fault as you signed up to do business with them.

    The customer is also probably the citizen of a democracy of some sort. In such a system, the people can participate in making laws when they feel that some actor -- corporate or natural -- is harming them. The cell phone company knew this when deciding to do business in the country. If enough citizens can demand redress for this grievance through their government, it is their right to. Can the phone company complain about this? Well, sure, but as you pointed out, they voluntarily decided to do business in the country.

  • by rolfwind (528248) on Wednesday October 13, 2010 @03:16PM (#33886228)

    I'd also like the government to adopt (for everyone) a law that states that the advertised price is the price. Not tack on a million different taxes and surcharges (most of many are optional for the phone companies to charge) to it where it goes from the advertised $79.99 a month to 105.49 or whatever. Don't tell me the companies can't achieve it - all the gas pumps here can and it's pretty much standard in Europe.

    Now, I don't care if the companies itemize the taxes to explain why the price is where it's at. But this crap happens too often (occupancy tax in hotels) that it's all a scam on an unsuspecting consumer and an educated one can't tell exactly what he'll pay, they just pad the advertised amount in their head with an extra 20%, maybe more.

    And if you're all about the free market, having reliable price points is one of the keys for real competition.

  • by Lunix Nutcase (1092239) on Wednesday October 13, 2010 @03:19PM (#33886278)

    Imagine if they had to pay a penny per spam sent. Spam would be largely gone tomorrow at that price.

    No, they'd just use stolen credit cards to pay for the spam.

  • by TermV (49182) on Wednesday October 13, 2010 @03:25PM (#33886356)

    You are being charged for text messages because it's a service that you opt to use. The cell phone companies are under no obligation to offer text messaging, much less free text messaging. They've found a product they can produce for next to nothing that people buy like hotcakes at a premium price. Nothing wrong with that.

  • Re:Why stop there? (Score:3, Insightful)

    by PitaBred (632671) <[gro.sndnyd.derbatip] [ta] [todhsals]> on Wednesday October 13, 2010 @03:25PM (#33886366) Homepage

    An unfair contract with an oligopoly fucks everyone. If your choices are "get a cell phone" or "don't", you have very limited options for not getting screwed. Free markets don't work when there isn't free competition. That's where the government has to step in to protect the consumer.

    Or would you rather have the old days where AT&T owned everyone's phones, which we aren't far from in the mobile space?

  • by Late Adopter (1492849) on Wednesday October 13, 2010 @03:26PM (#33886370)
    Why are the cell phone companies extending customers a near-infinite line of credit on the phone? What exactly makes them think that people are going to PAY a thousand dollar phone bill. It's sheer stupidity, they're sending out ludicrous bills and hoping to make it up on the suckers.

    When I signed up for my Sprint plan, they did a credit check and capped my spending at $250. How hard is that? And how hard would it be to ask to have your plan capped to a certain multiple of your usual bill (say, 2x)?
  • by ShooterNeo (555040) on Wednesday October 13, 2010 @03:29PM (#33886412)

    Cell phone companies do NOT operate in a free market. The spectrum rights they are granted amount to legally authorized monopolies. Also, the vast array of towers a company needs in order to have reasonably broad coverage means that not only do cell phone companies have a legal monopoly, their market niche is also a natural monopoly.

    Monopolies are one of the common reasons for capitalism/the market failing. The only way we know to patch this hole in our economic system is to have the government make rules and enforce them.

    Anyhow, for this reason, in order to stop the cell phone companies legally scamming us by charging us ridiculous rates for overages and not telling us until the end of the month, they need to mandate notifications when our bill goes over.

    I think notifications aren't enough : I think a user should be able to set a maximum dollar cap for a month of service, and if the bill goes over that the cell phone company must either get the user to agree to lift the cap or to cut off service until the end of the month. (except for emergency calls or calls on night/weekend minutes, etc)

  • by yeremein (678037) on Wednesday October 13, 2010 @03:31PM (#33886454)

    I could understand advertising $39.95/mo exclusive of taxes, but the phone companies themselves tack on a bunch of other surcharges that are _not_ taxes. They make them sound like taxes by calling them "regulatory recovery fees", but they're really unadvertised price hikes that they can spring on you at will, even when you have a contractual price.

    Make phone companies advertise their ACTUAL rate first. Then go after these warnings...

    (It's for this reason I use a prepaid Tracfone; no surprises.)

  • Re:Really? (Score:3, Insightful)

    by apparently (756613) on Wednesday October 13, 2010 @03:36PM (#33886540)
    Yes, because it's going to take up sooooooooooooooooooooo much time, and soooooooooooooooo much effort, and sooooooooooooooooooooooooo much equipment to send a single fucking text message when a condition within an If statement is reached.
    How does my bank ever manage to text me when my accounts reach certain thresholds without bankrupting themselves? It's goddamned fucking miracle, I tells you.
  • by VGPowerlord (621254) on Wednesday October 13, 2010 @03:45PM (#33886650)

    Having to pay to NOT receive a service that you DON'T want to receive should be banned.

    I agree. When I talked to my parents earlier this week, they mentioned that they couldn't cancel long distance service on their land-line phone because AT&T would charge them an additional fee not to have it... that was the same price as having long distance service.

    Since they use their cellphones for long distance, and only keep their landline because they've had the same phone number for 21 years...

    Bottom line: My parents are looking into canceling their AT&T phone service, despite meaning they'll lose their old number.

  • Re:Why stop there? (Score:3, Insightful)

    by Achromatic1978 (916097) <robert AT chromablue DOT net> on Wednesday October 13, 2010 @04:00PM (#33886806)
    I know - it's fucking horrible. Like AT&T for example, their interface to do this is a disaster. I have to go to "www.att.com/myWireless", off a button on the front page of AT&T's site, no less, then, get this, they ask for my cell number and a password. Once I enter that in, it's this onerous, convoluted situation where I am forced to let my eyes wander roughly four inches from the top of the page to this tiny graphic that occupies, hmmm, no more than a third of the page width, and has all this legalistic jargon like:

    As of October 13, 2010, you have 3 days left in your billing cycle.

    And then, under the graphic that purports to show the same data, it tries to bamboozle you with phrases like:

    Anytime Minutes: 253 of 550 used.

    and

    Rollover Minutes: 0 of 2325 used.

    This is the kind of shit we shouldn't stand for.

  • Re:All you can eat (Score:3, Insightful)

    by Da_Biz (267075) on Wednesday October 13, 2010 @04:05PM (#33886876)

    I agree: the FCC can't just toss out a price cap and call it good--some good regulatory policy is needed...

  • Re:Really? (Score:5, Insightful)

    by sonicmerlin (1505111) on Wednesday October 13, 2010 @04:09PM (#33886948)
    And you sum up what's wrong with this nation. Retards who think anyone with compassion is lazy and nonsensical, and that democracy fails when their preferred leaders aren't in charge.
  • by gmacd (181857) on Wednesday October 13, 2010 @04:12PM (#33886990) Homepage

    The question I ask myself when considering the root of the problem - who writes/approves a billing algorithm that can generate a monthly bill for a residential customer that can go into the thousands of dollars? If the costliest package from a vendor is say 150.00 per month, billing algorithms should max out at a reasonable multiplier of this amount, say 2 or 3. That should provide enough incentive for customers to educate themselves about the various packages and select the right one without getting "Bill Shock".

  • by roc97007 (608802) on Wednesday October 13, 2010 @04:14PM (#33887012) Journal

    This is not a "protect people from themselves" issue. Things are purposely set up to maximize the possibility of you unintentionally racking up charges. A "Web" button that can't be disabled right next to the "Call" button. Smartphones that "phone home" over the data line even when data is disabled while traveling internationally. Huge, punishing charges if you go over your limit even by a tiny bit. (I mean seriously, if $40 a month will cover several gigabytes of downloads, why charge over $80 for 2.2 Megabytes of downloads without a data plan? Answer: Because they can.) Phone bills that lag 45 days or more behind your actual usage. "Services" that have a per-usage charge that isn't spelled out when you use them. (Teens typically fall for this.) The carrier not clearly communicating that you can turn a lot (but not all) of these "services" off by a simple request.

    It's not just a matter of reading and understanding the TOS. We're all professionals here, we can really dig into a TOS and find the line buried on page 3 in the middle of paragraph six dealing with FCC regulations where they've buried the over usage fees. That doesn't cover everything -- there's ways to overinflate your bill that aren't covered by the TOS.

    Mind you, my nephew was a fine counterexample. He was told that local calls on the weekends were free, and he thought he heard that all local calls were free. His first bill was the size of a paperback and well over a grand. To my knowledge the carrier is still looking for him. No matter how foolproof one makes a system, fools will find a way to crash land. But besides that, the system as it currently stands is designed to blow your hand off if you turn the knob to the left instead of the right, and that's the part that really needs to stop.

  • Re:Yes, really. (Score:3, Insightful)

    by CyprusBlue113 (1294000) on Wednesday October 13, 2010 @04:53PM (#33887546)

    It has nothing to do with charity. Medical Insurance isn't really about insurance as it is currently treated by *all* parties. Insurance would be against something catastrophic not regular. You don't turn in oil changes, new tires, and gasoline on your car insurance.

    Medical insurance as it currently stands is effectively a price negotiation pool, along with group acclamation of costs. Trying to pretend it is anything else is disingenuous at best.

    And trying to go without insurance under the current system is just foolish, not just due to the potential of huge costs due to risk, but also simply the issue of price offloading to those that don't have the negotiating power to fight it.

  • by AK Marc (707885) on Wednesday October 13, 2010 @04:54PM (#33887556)
    They are "allowed" to advertise them. They are also not required, in any way, to charge them separately. That is, there's nothing that stops a company from advertising a $39.99 plan and when you get your bill, it's for $39.99. However, it's more profitable to list a phone plan at $39.99 and charge $45 for it, than to list it at $39.99 and charge $39.99 for it. They make the service stations advertise the after-tax price for gasoline. Why not the same with telecom? There's no reason we can't do it that way, other than the phone companies like to be able to advertise plans for below what the bill will be.
  • Re:Why stop there? (Score:3, Insightful)

    by ktappe (747125) on Wednesday October 13, 2010 @05:24PM (#33887890)

    I know - it's fucking horrible. Like AT&T for example, their interface to do this is a disaster. I have to go to "www.att.com/myWireless", off a button on the front page of AT&T's site, no less, then, get this, they ask for my cell number and a password. Once I enter that in, it's this onerous, convoluted situation where I am forced to let my eyes wander roughly four inches from the top of the page to this tiny graphic that occupies, hmmm, no more than a third of the page width

    Again, if you read about this subject you'll see examples of people who HAD NO INTERNET ACCESS because they were volunteering to rebuild Haiti. So they couldn't check your precious website. And they were told their cell service would be comped because they were volunteering. But Verizon didn't comp texts and data so the cell user received a $45,000 bill.

    So go ahead, get snarky again about that example of "bill shock".

  • by Shadow of Eternity (795165) on Wednesday October 13, 2010 @06:21PM (#33888484)

    Google voice, problem solved.

  • Re:All you can eat (Score:3, Insightful)

    by geminidomino (614729) on Wednesday October 13, 2010 @06:47PM (#33888638) Journal

    As opposed to leaving the corporate demon offspring of Ma Bell in control of anything...

    I can only guess that most of the people who think this is a bad idea have neither any idea what "free market" actually means, nor memory of the old AT&T...

    I wonder if Lily Tomlin's relevant bit is on youtube...

  • by cyberidian (1917584) on Wednesday October 13, 2010 @07:41PM (#33888992)
    This is a silly comment. First of all many families have several phones and may have normal phone bills of $300 or more. Second of all, these problems can happen to people with good credit. Finally, many people need their phones for their livelihood and do not have a landline alternative. These people, like myself, are in no position to shut off a phone if the bill is $1000 - they just pay it and that is what the phone company is counting on.

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