Wednesday, April 28, 2010

Mobile Misperceptions: A Research on Wireless Contract Design

Here's an interesting study that delves on how wireless contracts are designed. This research recently attracted the attention of the FCC, which was looking at ways to make the mobile industry more mobile friendly.

Mobile Misperceptions is a study conducted and published by Professor Oren Bar-Gill and Rebecca Stone in 2009. This study looks at consumer confusion regarding cell phone contracts.

According to Mobile Misperceptions, cell phone carriers use knowledge of “systemic mistakes and misperceptions” on the part of subscribers when designing mobile phone and wireless contracts.

The service plans offered by US carriers become burdens because consumers either underestimate their monthly usage, resulting in overage fees, or overestimate the level of service required. These mistakes cost U.S. consumers up to $12 billion a year.

The problem is also fueled by contract lock-ins and the sheer complexity of calling plans.

The significant findings of the Mobile Misperceptions led the Federal Communications Commission to invite Bar-Gill to present the paper’s findings at the FCC on April 9. Bar-Gill also consulted with FCC staff who are drafting new regulations for the cell-phone and other telecommunications service markets.

Well, I have to agree. We have seen numerous wireless contract disputes that originate from consumers failing to grasps all the legalities contained within their service agreements.

I hope that Mobile Misperceptions will contribute to improved and easy to understand wireless contracts.

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