Would require that carriers offer options without early-termination fees
A new bill proposed by Congressman Ed Markey (D-Mass.) could force wireless carriers to give customers the option of subscribing to services that are completely free of early-termination fees.
A bill proposed by U.S. Rep. Edward Markey (D-Mass.) could force wireless carriers to give customers the option of subscribing to services that are completely free of early-termination fees.
The proposed legislation — the Wireless Consumer Protection and Community Broadband Empowerment Act of 2008 –tackles a wide range of wireless consumer issues, including early-termination fees, wireless service-plan disclosure and QoS monitoring.
One of the more intriguing sections of the bill proposes changes to how carriers should be allowed to charge early-termination fees. Under the proposal, carriers will be required by the U.S. Federal Communications Commission to provide customers with at least one wireless-service plan without early-termination fees. Additionally, the bill proposes that such fees be prorated over the duration of wireless service plans.
Noting that most service providers charge fees of $175 or more the for early termination of two-year agreements, the bill claims that such fees do not accurately reflect the costs of recovering bundled mobile devices or other incentives offered in many wireless plans. The proposed bill also would require carriers to reduce their early-termination fees by one-half after their customers are more than halfway through a service agreement of at least two years.
In addition to placing restrictions on early-termination fees, the draft bill also would require carriers that offer subsidized wireless handsets and other equipment as part of long-term service deals to offer subsidy-free equipment and service plans without forcing customers to sign long-term contracts. What’s more, carriers would have to offer these subsidy-free plans at prices comparable to those of wireless plans with subsidized wireless equipment.
Anne Broache, a blogger at CNET, notes that this particular provision could force Apple and AT&T to unlock the iPhone, because consumers currently have to sign a two-year service agreement when they buy an iPhone. Under the proposed rules, Broache says, AT&T would be forced to sell the iPhone “at an unsubsidized price and for a contract length of the customer’s choosing.”
Other provisions in the draft bill require carriers to provide more-detailed information to customers about the lengths of wireless plans and trial periods; about charges for monthly service, additional minutes, roaming, and international calls; and about the methods for calculating and assessing customers’ monthly minute totals. Another section of the bill would require carriers to create coverage maps for consumers of outdoor service-coverage areas in local markets, as well as any known gaps in outdoor coverage.
The U.S. House of Representatives Subcommittee on Telecommunications and the Internet held its first debate on the draft legislation on Wednesday this week. The bill mirrors legislation proposed by the Senate last year that would have required mobile phone carriers to give customers more complete information on their coverage, would have prorated early-termination fees and would have prohibited carriers from misidentifying their own fees as government taxes. That particular bill is still in the early stages of legislation and has been referred to the Senate Committee on Commerce, Science, and Transportation.
