Wireless Communications

Background

Wireless phones have assumed a central role in modern life. For many consumers, including older adults, they have become indispensable. With a cell phone, each consumer has more freedom and flexibility, including communication by voice and text message. Increasingly customers are turning to web-connected smartphones. This allows them to stay connected with family and friends, conduct business, stream audio and video, navigate, and coordinate schedules. Cell phones also empower people with a sense of security and confidence that help is always nearby in the event of an emergency.

The wireless industry’s growth has at times been accompanied by unfair, abusive, and deceptive business practices. Many consumers have become frustrated with wireless service and pricing. In addition, in 2018, the Federal Communications Commission adopted a policy that will give cell phone companies more control over text messages. Critics say the new rule allows companies to block text messages and affects privacy. More consumer protections are needed.

Under federal law, states are largely barred from regulating wireless phone companies, except under certain conditions. States are allowed to regulate “other terms and conditions” of wireless services that do not pertain directly to rates, including placement of wireless facilities, billing and marketing practices, and other consumer protection matters. The line between rate regulation and “other” oversight is an ongoing subject of contention between the wireless industry and state and federal regulators.

WIRELESS COMMUNICATIONS: Policy

Consumer protection

In this policy: FederalState

Policymakers should ensure consumer protections in wireless communications services, including text messages. This should include fair pricing with limits on fees and the right to cancel.

Policymakers should require providers to comply with the following consumer protection principles:

  • price and quality comparisons—to facilitate and encourage comparison shopping, regulators should require that consumers have access to information that is low cost or free, comprehensive, and easy to read. Regulators should sponsor and disseminate price and quality comparisons of wireless goods and services.
  • disclosure—prices for wireless goods and services should be disclosed up front. Contract terms should be clear, concise, and in plain language so that consumers can understand the terms to which they are agreeing.
  • choice—consumers should have a choice of vendors, all of whom should have a fair chance to compete for customers.
  • service area coverage information—consumers should receive maps or other information from vendors that identify network holes or high-traffic areas that disrupt service.
  • oversight and enforcement—state and federal regulators should conduct robust oversight and enforcement of consumer protections.
  • public participation—consumers should be adequately represented in public policy decision-making related to wireless communications.
  • redress—timely and effective means of redress should be available to consumers when they encounter problems. Vendors must clearly explain how and where consumers can lodge complaints. Mandatory binding arbitration should be prohibited.
  • usability—consumers should have easy access both to customer service agents—rather than just an automated call system—and to user-friendly instructions for wireless goods and services.

In addition, policymakers should ensure the following.

  • All consumers should be able to cancel, without penalty, any contract for wireless telephone service within at least 20 days after the date of the first bill for monthly service following service activation. Within that period, consumers should be able to return, for a full refund, any equipment acquired from the provider or its agents or authorized dealers.
  • Service providers should substantially reduce or eliminate fees that they charge customers for terminating a service contract before it expires.
  • Wireless carriers should be prevented from using handset-locking software or other techniques that disable otherwise functional cell phones when consumers switch providers.
  • Text messages should be classified as telecommunications services, like phone calls, consistent with policy on net neutrality (see also this chapter’s Net Neutrality section).