Cell-phone racket

Consumers and government regulators fight for fair play from the telecom giants

Frustrated with your wireless provider? More and more cell-phone users are starting to feel scammed by one of America’s Big Four—AT&T, Verizon, T-Mobile or Sprint.

Frustrated with your wireless provider? More and more cell-phone users are starting to feel scammed by one of America’s Big Four—AT&T, Verizon, T-Mobile or Sprint.

For more information on the early-termination fee issue, go to www.fcc.gov and search for cell-phone ETFs.

If you’re not angry with AT&T, Verizon, T-Mobile and Sprint—America’s four national wireless providers that reportedly control 90 percent of the market—then here’s some news that will raise your righteous ire.

Perhaps you’d be interested to know about one of the most outrageous cell-phone scams? It’s simple: Charge customers for being forced to listen to 15 seconds of unnecessary voicemail instructions reminding them how to leave a message after the beep. According to The New York Times technology writer David Pogue, if Verizon customers leave voicemails or check their messages twice a day, the mammoth telecommunications firm takes in around $620 million. In return, you lose wasted hours of your life and have to pay for it.

Speaking of Verizon, have you heard about the representative who refused to shut down a dead man’s service, even though his daughter produced a death certificate and needed the account closed so settlement of his estate could proceed? Or the rep who tried to collect an overdue $308 bill from a customer by threatening to “blow your muthafucking house up”?

The telecom giants’ latest disgrace, according to a recent Federal Communications Commission report, has been given the egregious name of “bill shock.” Which is a misnomer, actually: It’s certainly not shocking to find, as the FCC explained, that “30 million Americans—or one in six mobile users—have experienced … a sudden increase in their monthly bill that is not caused by a change in service plan.” It’s even less alarming to discover that “nearly half of cell phone users who have plans with early termination fees (ETFs)—and almost two-thirds of home broadband users with ETFs—don’t know the amount of the fees they’re accountable for.”

Bringing transparency and purpose to that random pricing is a primary objective of the FCC, which seems to have finally come to its senses under the leadership of Chairman Julius Genachowski, who was nominated by President Barack Obama and confirmed by Congress in 2009.

“In January, we sent letters to the major wireless providers asking the rationale for their ETFs,” said FCC spokesperson Rosemary Kimball. “While the business model of subsidizing phones by the ETFs is the carriers’ choice, our position is that the ETF charge must be made clear to the consumer when he is signing the contract. And this does not seem to be the case in many instances.”

It’s the kind of obscure legalese the industry is known for. Its contracts are dense with clauses that no self-respecting human should have to wade through, just to place a call or send a text. ETFs are a particularly blatant insult to wireless customers, who can’t leave an underperforming carrier (and that’s really all of them) without forking over hundreds of hard-earned dollars. In fact, AT&T just nearly doubled its $175 early termination fee to $325 in May. That cold, capitalist logic is built specifically for bottom lines and earnings reports, not for flawless customer service. ETFs are financial shackles to mediocrity, and they’re just the start.

Between 2006 and 2008, the cost of sending and receiving a text message rose 100 percent. The average American consumer pays $500 to $600 a year for wireless service, which is more than any other developed nation. Of course, iPhone addicts—who are chained to Apple’s exclusive contract with AT&T—pay around twice that annually in various subscription fees.

“We want consumers to know that they can avoid the ETF by using prepaid phones,” Kimball added. “And we have recently released a public notice asking for comments from consumers and the industry on how customers can be made aware they are about to incur unexpected charges. We asked whether a model like that used in the European Union, where customers must be alerted when they are about to incur roaming charges, would work in the United States.”

Mandating that the wireless industry warns its customers before it variously fleeces them is a great start. But bridging the price gaps between the carriers and their carrion is going to take a while.