The Cell Phone Consumer Empowerment Act of 2007

Last September, Senators Amy Klobuchar and Jay Rockefeller unveiled a legislation that was driven towards empowering the 200 million cell phone customers nationwide. The bill would allow consumers to be able to make informed choices about a wireless service that best fits their needs and their budget.

The bill named the Cell Phone Consumer Empowerment Act of 2007" will put pressure ton wireless service providers. It will encourage them to share simple, clear information on their services and charges with customers before they enter into long-term contracts. Customers will have a thirty-day window in which to exit a contract without early termination fees. The service providers will also grant customers greater flexibility to exit contracts with services that don’t meet their needs if this bill will be implemented.

Sen. Klobuchar explains her views by saying that “Early termination fees are a family budget-buster; families should be able to terminate service without outrageous fees; know if their cell phone will work on their drives and in their home and office; and understand what to expect in their monthly bills once you pile on charges and fees. It’s a simple matter of fairness.

These are some of the key points of the Cell Phone Consumer Empowerment Act of 2007 :

EARLY TERMINATION FEES (ETF)

The FCC shall set forth regulations to pro-rate ETFs. At a minimum, the ETF for a 2-year contract shall be reduced by ½ after 1 year.

DISCLOSURE REQUIREMENTS FOR PLANS AND CONTRACTS

Publication of the terms of a wireless plan shall include information on: contract terms; charges; minutes; information on taxes and surcharges; wireless E-911 service; and other information that the FCC considers appropriate.

This information shall be given to a consumer prior to entering into any contract.

CONTRACT EXTENSION, MODIFICATION, OR RESCISSION

Extension: An extension of a contract shall not be valid unless the wireless provider provides point-of-sale notice of the extension to the customer and allows the customer to cancel the extension within 30 days after such notice.

Modification: Wireless carriers must provide subscribers with written notices of changes in rates and terms at least 30 days before such changes are to take effect.

Rescission: A contract for wireless service may be canceled upon the request of a subscriber for any reason up to 30 days after entering into the contract.

ENFORCEMENT

The FCC shall enforce the legislation’s provisions and the attorney general of a State, or the public utility commission of a State may bring a civil action in federal district court or establish or use existing administrative procedures to enforce the Act’s provisions.
-The Act preempts state law, except that the Act does not preempt state laws that provide additional protections to wireless subscribers.


This billed coupled with the Congressional hearings on the issue of wireless contracts have pushed wireless service providers to have a softer stance on their contracts. Some of them have preempted the bill by pro-rating their early termination fees and have allowed their consumers to alter their contracts.

It also seems that this bill has encouraged wireless service providers to pay attention to customer satisfaction. They have began to make plans to implement consumer friendly programs in an effort to provide better service and to attract more customers.