FCC Chairman hints at federal regulation of cellphone industry
- June 13th, 2008
- 3 Comments
Stopping short of coming out and saying the FCC would start regulating cellphone company early termination fees, FCC Chairman Kevin Martin did publicize ideas for how such regulations would work. I’ve met Kevin Martin and he’s a very intelligent man, though I normally disagree with his ideas. This one, though, I love.
Right now carriers are free to come up with any fees they want, knowing if the customer wants to sing up badly enough they’ll do it despite the fine print. That means most people face fees of about $200 to cancel their contracts, even if they only have a few months left.
The chairman’s idea would eliminate that problem, calling for pro-rated fees. The longer you’re in-contract, the less you’ll pay to get out. This is fair. Also, more expensive phones would be allowed to have such high fees, but cheaper handsets — like the RAZR, for example — would have lower fees. This also makes sense, as being locked into a two-year contract with a $200 early termination fee doesn’t make sense for users who get basic handsets.
One interesting idea he also put forth calls for companies to have reasonable time frames, maybe a year, for contracts, and not require users to re-up the entire contract for service upgrades.
So there’s a plan for a plan, but no real plan for FCC regulation. That being said, we think it’s only a matter of time before the FCC steps in and keeps the carriers from pillaging your bank account they way they are now.
Shea (Who am I?)
4 months ago
Great~! I think this is just what the industry needs to be moving towards. For many years now mobile carriers have been able to charge what they want and when they want, unfettered.
Rockefeller got set straight, Microsoft got theirs, now it’s the cellular industry’s turn to get dealt with by the US government proper.
Now if only we could do something about these gas prices….
Linda (Who am I?)
4 months ago
On top of making early termination fees proportional to time left in contract and based on phone costs, the MAIN CHANGE consumers need is to have phones UNBUNDLED, and PORTABLE between Telecommunications Service Providers. Imagine having to switch computers because you change ISP’s. Cell-phones are becoming small computers — why should we have to change our phones to change TSP’s, or change TSP’s if we want a specific model of phone?
UNBUNDLING doesn’t prevent TSP’s from continuing to offer subsidized calling contracts. They would still have the freedom to offer the plans they wished — but they should be required to accept device & activate user-owned devices and change only for service — not the phone.
The phone charge is *crap* — I sign up for a 2-year contract that supposedly has an early termination fee so the phone company can cover their phone costs. “Fine”. Then why doesn’t my phone rate go down by the “phone repayment amount” after the contract? If I keep my phone, and don’t contribute to “global waste”, why am I penalized by paying the higher rate associated with a “new device”?
Jim (Who am I?)
4 months ago
I agree. Cancellation charges are crap. Wish I had a business where I could charge you for not wanting to do business with me anymore.
They’re riding the curve.
One of these days, with competition, they’ll be wearing out their collective kneecaps begging for customers.
As much as I hate it, there are 2 industries that require federal regulation: Communications and the Airlines. They’re both running wild right now.
The sooner regulated, the better.