FCC proceeding placed on hold as wireless industry adopts voluntary measures to reduce bill shock

As we reported a little less than a year ago, the FCC released a Notice of Proposed Rulemaking proposing that wireless carriers be required to take steps to avoid “bill shock”.  Readers with good memories will recall that in the summer of 2010, Congress, the Administration and the FCC were highly exercised about the heartbreak of bill shock. Numerous complaints were rolling in from parents of teenagers and international travelers, among others, who were shocked to discover that they had somehow exceeded their plan limits or incurred international roaming charges which they had not expected. Horror stories of phone bills of $34,000 and $18,000 prompted our trusty regulators to leap into action with a plan to make carriers warn consumers of impending danger before it strikes.

That was then; this is now.

The furor over bill shock died down in 2011, with the FCC turning its attention to other matters, and what had seemed to be a major consumer crisis in 2010 faded from the spotlight entirely.   Some carriers, chastened by the bad publicity and customer relations resulting from the horror stories, started voluntarily warning their customers about impending surcharges. Now that voluntary movement has crystallized into an industry standard.   CTIA (official name: “CTIA – The Wireless Association®” – don’t forget the ®, please), which is comprised of companies serving the vast majority of American wireless customers, announced that it has adopted new guidelines as part of its Consumer Code for Wireless Service. Dubbed the “Wireless Consumer Usage Notification Guidelines” (and appended to the Consumer Code as the eleventh provision), the CTIA’s standards appear largely to track the proposals put forth by the Commission last year. The plan calls for notification to consumers that they are about to exceed and/or have exceeded the minutes of use included in their plans, and notification when international roaming charges will be assessed. All notifications will be cost-free to the consumer, and they will be provided on an “opt-out” basis – i.e., unless Joe or Loretta Cell-User expressly chooses not to receive the notices, he/she can expect to be getting them.   

The guidelines are, of course, voluntary. No carrier has to abide by them, unless it voluntarily subscribes to the CTIA’s Consumer Code.  The notifications are to be phased in over the next couple of years. By October, 2012, participating wireless providers will be providing required alerts relative to at least two of the four service categories (i.e., voice, text, data and international use); full compliance is not due until April, 2013. The fine print on the guidelines has yet to be revealed – for example, how and when is the consumer supposed to receive these warnings?   Nevertheless, the FCC breathed a sigh of relief at not having to impose new regulations on an already highly regulated industry. If the industry is willing to police itself, all the better. So the FCC put its proposed anti-bill shock regulations back in the freezer in the hope and expectation that the industry guidelines will eliminate the problem.

This observer can attest that he has already gotten a timely warning from AT&T that his daughter was fast approaching the data limit on her smart phone plan. That warning resulted in a rather more forceful and dire warning being delivered to the daughter in question. Disaster safely averted. And possibly proof that common sense, bad publicity and the mere threat of regulatory intervention can sometimes work as well as actual governmental regulation in addressing social ills.