The Anti-Bill Shock Rules

There have been recent talks of the FCC's efforts to lessen the occurrences of bill shock. But what is "bill shock" anyway and why should consumers be concerned over it.

Well, here's a good illustration of bill shock from Cnet:

When Kerfye Pierre returned home to Maryland from a visit to Haiti in February after the devastating earthquake, she received yet another shock: a $30,000 phone bill from T-Mobile USA.

Pierre, who had gone to Haiti to visit her sister who was having a baby, was there when the earthquake struck in January. Before her trip, she had suspended her phone service to avoid expensive charges. But after the disaster struck, she was told by a T-Mobile representative that she could use a courtesy plan that allowed her to communicate with people back home.

What she didn't realize was that the plan only included voice minutes. But because the voice network was so unreliable after the quake, Kerfye used texts, e-mails, and Facebook posts from her phone to update loved ones.

Eventually, Pierre was able to get a $25,000 credit to her account, but she still owes T-Mobile $5,000.

Have you ever experienced this? Well, I sure hope not. Fortunately, the FCC has started making a way to counter bill shock. The agency has proposed new regulation that would require wireless operators to alert customers with a text or voice message when they are about to exceed a bundle of voice, text, or data.

The FCC also suggested that wireless operators notify customers when they are about to incur international or other roaming charges that are not covered by their monthly plans, and if they will be charged at higher than normal rates.

The agency proposed that all wireless carriers offer easy to find and use tools that help customers monitor usage and review usage balances.

Hopefully, these efforts will not go to waste and consumers will be able to avoid any incidences of bill shock.

That's it for this post. See you next week for more wireless contract news and related topics.

Terminating a Wireless Contract to get the iPhone 4G

The release of a new iPhone always triggers a consumer migration from other carriers to AT&T. Consumers find all sorts of ways to abandon their contract just to get Apple's prized smartphone. This years iPhone 4 is expected to be no different. Here are some points that you might want to consider before terminating your mobile phone wireless contract to get the iPhone 4.

First you need to think about the ETF or early termination fee of your carrier.

Verizon too has two tiers of ETFs, $350 for smartphones, and $175 for feature phones.

Sprint's ETF starts at $200 and goes down by $10 every month beginning after the first four months.

T-Mobile ETF is $200.

Then you need to consider one you have terminated you contract. What to do with your old phone. Well, there are plenty of options.

First you can get some of your money back by selling it on Craigslist or eBay.

You can also donate your old handset to charity, or one of the many programs that delivers old or unwanted handsets to members of the military, or people in developing countries. You can also donate it as a cell phone for seniors.

That's it for this post and good luck with ditching your old wireless contract for the new iPhone 4. Tune in to this blog for more on wireless contracts news and updates.

The FCC's Advice on On ETFs of Wireless Contracts

The recent increase in early termination fees more mobile phone contracts of AT&T and Verizon Wireless has moved the Federal Communications Commission to issue advice addressed to cell phone consumers. The FCC has released a set of guidelines to help educate consumers on early termination fees.

The FCC hopes that this set of guidelines will ensure that consumers make informed decisions and avoid any extra charges when purchasing a contract mobile phone.

Here are the Federal Communications Commission guidelines on early termination fees:

• When signing up for a new cell-phone service, make sure you are fully aware of any “early termination fees” (ETFs) that may be associated with the contract you are signing. The salesperson may not mention an ETF, so be sure to ask.
• Ask how much the early termination fee will be and how it is prorated. Prorating means that the amount of the ETF you are responsible for decreases month by month. But different carriers prorate different plans in different ways. For example, one $240 ETF might decrease by a steady $10 a month over two years, while another high ETF might drop by only $5 a month until the last four months.
• Ask if it would be possible to buy a handset at full price and avoid an ETF.
• Think before you make any changes in your contract, such as buying a new phone or more minutes that your carrier might offer. This could trigger a new two-year contract with another ETF.
• Ask about the trial period during which you can cancel the service without an ETF penalty. This is typically 14 to 30 days. Also ask whether you will get your first bill before the trial period is up – and if not, whether you can find out about your costs during the trial period in another way.
• If you use your phone sparingly, consider avoiding the whole ETF issue by buying a pre-paid phone. These phones do not involve a contract.

That's it. Hopefully, these guidelines will lessen the number of mobile phone contract disputes. However, I'd prefer to have the FCC impose stricter policies tha would prevent carriers from implementing fees that are unfair towards consumers.

FCC Abolishes Home Wireless Roaming Rules

Way back in 2007, the FCC enforced rules regulating wireless roaming. A couple of years ago, the commission did not require carriers to offer roaming services to other carriers in areas where they owned spectrum but had not built out network coverage.

However, smaller carriers have argued the existing practice harms consumers since they need roaming agreements while they build out their networks. The FCC at that time was undecided on the issue. This time the commission has decided to overturn its decision.

This means that Wireless network operators will now be required to offer voice roaming services to other carriers in areas where those carriers own spectrum but have yet to build network coverage. Carriers will now be forced to forge reasonable agreements about voice roaming.

The commission will also consider if the same rule will apply to data roaming.

I have to say that this is a good decision. It helps smaller carriers because they will be able to roam on the networks of bigger wireless companies.

That's it for this post on roaming. Tune in to this blog to read about issues on other wireless contract policies and topics.

Google Cuts Nexus One ETF!

It appears that the FCC has convinced Google to take a softer stance on the the equipment recovery fee it imposed on the Nexus One.

The FCC has recently expanded its crackdown on excessive and unfair early termination fees or ETF's that was previously focused on Verizon. Google draw the attention of the FCC when it decided to impose a high ETF on the new HTC Nexus One.

The fee has been cut down to $150, down by $200 from the original fee. The original equipment recovery fee for the Nexus One was set at $350.

The company explained its decision to cut the ETF with this statement:

"Google's overall financial philosophy with regard to operator service plans remains unchanged: We make no profit from commissions from operators or from equipment recovery fees, and our recovery fees are based on operator charges to Google for early termination of service,"

However, some consumers still feel that the fee is unnecessary since carriers already charge a termination fee with its service contracts on the Nexus One.

Verizon Wireless also eased back on the devices included in its raised ETF device list.

That's it for this wireless contract post. Tune in to this blog for more news and updates related mobile phone contracts.

AT&T, Sprint and T-Mobile Also Targets of FCC ETF Inquiries

For the past few months, Verizon has been bombarded by questions regarding its raised ETF or early termination fee. However, the FCC appears to have widened its scope and included other major US wireless carrier's in its inquiries.

The commission has broadened it's inquiry into termination fees because "there is no standard framework for structuring and applying ETFs throughout the wireless industry." Letters were sent asking a series of questions probing how each carrier's ETFs are determined and applied. T-Mobile, AT&T and Sprint were among the recipients.

Google was also included among the FCC's targets. The company has caught the attention of the commission due to the equipment recovery fee it imposed on the Nexus One.

The companies were asked to detail how each discloses early termination fee information to consumers in advertisements, in statements on corporate websites, in brochures and sales scripts and in monthly bills.

Well, let's see if this inquiry forces these companies to take a softer stand on their ETF policies. Verizon felt the pressure and took off ten devices from products under its increased ETF rates. It will be interesting to see how the other carriers will respond.

Thta's it for this wireless contract policy update. Tune in to this wireless contract blog for more news and updates.

Verizon Removes 10 Phones from $350 ETF Advanced Devices List

It appears that Verizon Wireless has felt the pressure from consumers, the FCC and other government officials. The carrier has covertly removed ten mobile phones from the list of phones that require its new $350 early termination fee.

The carrier has recently imposed a bold wireless contract policy that required a $350 ETF (early termination fee) for a select group of smartphones and “advanced devices.” Naturally, this action was met by stiff resistance from consumer groups, the FCC and a few senators headed by Amy Klobuchar.

I posted the complete list of "advanced" or multimedia phones several weeks ago. Well, that list has to be updated now that Verizon has chopped off ten devices. The devices taken off the list include the Motorola Krave, Samsung Rogue and five LG devices.

But why did Verizon remove ten devices from its $350 ETF advanced devices list? Well, a Verizon spokesman was unable to answer queries about the change. Some experts say that pressure from the FCC, who criticized Verizon's $350 ETF explanation and from other groups has moved the carrier into removing the devices from the list.

That's it fro this post on Verizon's controversial wireless contract policy. Tune in to this blog form more news and updates on wireless contracts and related topics.

iPhone Reponsible for Two-Year Wireless Contract Surge?

It appears that the number of consumers that are signing two-year mobile phone contracts are on the rise. A study conducted by the folks at Ofcom.org indicated that more than two in five mobile phone users have signed up to a two-year wireless contract. This number has reportedly increased significantly in the last few months due to the popularity of the Apple iPhone.

The iPhone 3GS has recently become widely available to mobile phone consumers throughout the globe. Apple's hit mobile phone was released in the U.S., Canada and six European countries on June 19, 2009, in Australia and Japan on June 26, and in other international markets in July and August, 2009.

The subsidized price that come with a two-year cell phone contract has made the iPhone more accessible to consumers. Customers also recognize that they can reduce their monthly bills since phone companies reserve the best rates for customers willing be tied in for a long time.

However, signing a two-year agreement also comes with some disadvantages.

For instance, the contract may restrict a consumer's choice for two years. This means that a user may not be able to keep track of the latest technologies to hit the market while being committed to a two-year agreement.

There are also some stiff penalties for consumers who decide to terminate an agreement. Verizon Wireless has recently taken heat for imposing a $350 early termination fee or ETF on its advanced devices.

Consumers should weigh the advantages and disadvantages of signing- a long term contract before they sign on the dotted line.

That's it for this post. Tune in to this blog for more news and updates on the wireless contracts industry.

FCC Demands Improved Increased ETF Explanation from Verizon

In my last post for this wireless contract blog, I posted about FCC member, Mignon Clyburn's comments on Verizon Wireless explanation for raising the ETF on advanced devices.

Clyburn expressed that Verizon's 77 page statement in defense of its new wireless contract policy is "unsatisfying" and "troubling." This time Federal Communications Commissioner Julius Genachowski has spoken out against the carrier's ETF increase explanation.

The commissioner was clearly unsatisfied with the carrier's explanation. Genachowski said, "I thought that response raised more questions than it answered. The bureau is looking into that... There's a very real level of consumer confusion around these areas"

However, Genachowski declined to say what the FCC's next move to mend this problem.

I guess we'll have to wait and see if the government exerts pressure to turn back the Verizon's ETF from $350 to $175.

Tune in to this wireless contract blog to keep tracks of developments in this story.

FCC on Verizon ETF Explanation: "Unsatisfying" and "Troubling"

A few weeks ago, Verizon Wireless released a 77 page statement in defense of its decision to increase the early termination fee or ETF for its "advanced devices" at the request of the FCC. This time, the commission has released its response to the carrier's defense of its increased ETF.

Well,. it appears that the 77 page statement did not impress the FCC. Mignon Clyburn, a Federal Communications Commission of the, described Verizon's official response to the FCC's query as "unsatisfying" and "troubling."

Here's more from Clyburn:

"Consumers already pay high monthly fees for voice and data designed to cover the costs of doing business. It is hard for me to believe that the public interest is being well served."

Those are some pretty scalding words for the Verizon Wireless. Let's see if they respond to these comments.

The FCC plans to investigate the matter further when it reconvenes in 2010 so tune in to this mobile phone contract blog to get the updates to this wireless contract news.

Verizon Wireless Defends Increased ETF for Advanced Devices

Verizon's decision to increase the ETF for it's advanced devices have attracted a lot of attention including US senators like Amy Klobuchar. Recently, the FCC has requested the carrier to explain the reasoning behind the increase in early termination fees from $175 to $350 for "advanced devices" (Click here to see the list of Verizon's Advanced Devices).

Well, Verizon Wireless has released a statement in defense of its decision to increase the controversial fees for some of its products. Unfortunately, the carrier released a 77 page response which would be impossible to post here in its entirety.

So let me just give a brief summary of the highlight points of Verizon's defense of the $350 early termination fee for advanced devices.

• the increased ETF allows the carrier to provide more capable handsets at lower upfront costs, and to reduce its losses if/when a customer chooses to leave their contract early.
• Verizon claims that the new rules causes the company to lose money when customers who choose to cancel their contracts during the 23rd month, during which time they would still owe $120 ETF.
• Advertising and marketing collateral are sufficient to make sure customers are informed of these new wireless contract policies.
• In 2003, the FCC stated that it doesn't support the concept of customers breaking contracts and that carriers have a right to recoup those fees.
• the additional cost it incurs to procure the devices on its advanced list is greater than the difference between the two ETFs ($175) on average.
• Advanced devices strains the broadband network up and extra guaranteed revenue is needed to keep the network at optimum performance.

Well, this has certainly turned interesting. I didn't expect the change in wireless contract policy would trigger such reaction from the government. Perhaps the tough economic atmosphere is making the government more aware of possible consumer abuse.

That's it for this wireless contract update. Tune in to this blog for more developments on this important mobile phone contract issue.

Roaming in Rural Areas may be Enforced by Legislation

Here's an interesting update for mobile phone users residing in rural areas. A US Representative has introduced legislation that aims to require telecom recipients of rural universal-service funds to provide automatic roaming to wireless service carriers. But before we discuss this bill let us us first discuss mobile phone roaming.

Now I have discussed roaming in my previous blog posts but it wouldn't hurt to give another little introduction to this wireless contract term. Roaming as used in wireless telecommunications refers to the extending of connectivity service in a location that is different from the home location where the service was registered.

Roaming is significant because it allows users to communicate beyond their wireless networks. It is an important service to those who live in rural areas are because the reach of wireless networks is usually limited. Roaming is also significant to customers because it's an important part of their monthly mobile phone service bills. If you "roam" a lot when you use your mobile phone, then you might be looking at a huge bill. Now let's proceed to the legislation that might force roaming in rural areas.

The bill is officially named the Universal Roaming Act of 2008 and was introduced by Rep. Henry Waxman of California. This legislation aims to attach the automatic roaming obligation to any affiliate of a telecom carrier that receives high-cost USF subsidies. Some experts feel that this bill will affect the current debates on on roaming rights by some auction winners that cannot yet access their spectrum. However, the current economic crisis will keep congress busy so further action on the bill is expected to be done next year.

This legislation has been met with some opposition from large carriers because they feel that they not be forced to provide access to licensees that own spectrum but have yet to established networks. If they provide roaming access to these licenses, then a delay in build out of wireless systems is a good possibility.

However, the Universal Roaming Act of 2008 also have its share of supporters. The Rural Cellular Association feels that the legislation introduced by Waxman is far-reaching and beneficial to smaller wireless carriers. The Rural Cellular Association would also want to abolish the cap on USF subsidies given to wireless carriers desiring to build systems in rural areas.

Well, I guess we have to wait until the economic crisis has subsided to gauge whether this bill will pass. This legislation has significant impacts on the current roaming scene so it will be interesting to see further action on it.

FCC Undecided on Changing Mobile Phone Roaming Rules

Here's some interesting wireless contract scoop for those who make a lot of roaming calls. According to a Reuters article, the Federal Communications Commission or FCC has not yet made a decision on chaining certain cellular roaming issues that have caused some problems for some mobile phone carriers.

This delay on changing the mobile phone roaming rules was seen as significant since smaller carriers have been expecting a decidion on this issue. Let's look at the heart of this conflict since roaming is one of the many aspects of mobile phone contracts.

The problem lies on whether carriers should be allowed to roam in areas where they own airwaves, but have not built networks, are affecting smaller carriers. Smaller carriers own spectrum in certain markets but lack the means to build the wireless networks and so they have to rely on o roam on the existing networks of larger rivals. The FCC has decided to look at this issue after the commission reaffirmed the rights of smaller carriers to roam on the networks of bigger wireless companies about a year ago.

Minor wireless network providers wanted to gain access to areas where they had acquired spectrum. unfortunately, they lack the means to build networks top exploit those areas. Neverthe less, thses small carriers wanted to preserve their right to roam in those areas.

Earlier, the FCC made a proposal that allowed smaller carriers who owned unused spectrum could continue roaming for four years before they lost roaming rights. The FCC wanted to give smaller carriers time to build out their own networks or to give the spectrum back to the government and continue roaming.

However, the FCC's five commissioners were unable to agree on the proposal so it was withdrawn. Some commissioners were concerned that they need more time to study the issue while some wanted to grant a longer phase-in period to smaller carriers.

The FCC did not indicate a specific time frame for making a decision in this issue. Well, this looks like an issue that won't go away soon. This issue affects regional customers who might lose their ability to make roaming calls if the FCC did not grant smaller carriers to roam on major net works.

Tune in to this blog for more news and updates regarding issues related to mobile phone contracts.

Sprint's ETF Lawsuit Loss Could Shake the Industry!

It been a few weeks since I've made a post here. The wireless contract scene has been quite so There wasn't anything to write about. But that's not the case right now. I've just found out that Sprint lost a lawsuit on its ETF wireless contract policy. Let's explore the details of this story.

Apparently, Sprint's early termination fees has violated a state law according to a California state judge when he ruled against the company. The members of the class who sued Sprint for it's ETF were awarded a total of $73 million in reparation for the fees.

The judge's tentative ruling says that Sprint will have to pay $18.3 million to customers who sued over the fees. Sprint should also credit $54.8 million to those who were charged but did not pay the fee. Well, Sprint seems to be in a bind now but the company does have two weeks to contest the ruling.

Not on to the bigger picture. The judge is also considering other lawsuits against telecommunications companies over mobile phone contract policies covering early termination fees. And recently, Verizon Wireless agreed to pay $21 million to settle an identical lawsuit. Overall, things are not looking well for mobile phone carriers.

FCC representatives refused to release any comment on this pivotal court decision however they did indicate that it will not affect the agency's plans on ETF. Currently, the FCC is dealing with lobbying over how best to handle the ETF policies in the wireless contracts of carriers.

The FCC has been asked by various Telecommunications companies to regulate the fees. They want the agency to protect them from class action lawsuits in state courts. The FCC has released information on a plan in which the cancellation fees would be reduced over the life of the contract.

Customers and consumer groups have continually assailed the ETF policies in the mobile phone contracts of cell phone carriers. Perhaps this important decision will fuel the efforts to regulate this troubl;e some fee. Tune in to this blog for more wireless contracts info, news and updates.

Lawmakers Argue Over Roaming

Here's some more wireless contracts news. Apparently, lawmakers have been debating about over roaming. Some experts say that the controversy over this wireless contract policy may grow into a major fault line in the mobile-phone industry. Let me discuss roaming before we proceed to the meat of this news.

The term "Roaming" is used in wireless telecommunications to describe the extending of connectivity service in a location that is different from the home location where the service was registered. Now every carrier has it's own wireless contract policies on roaming and the charges that come with it.

Here's a statement from the wireless contract of on roaming:

Roaming charges for wireless data or voice service may be charged with some plans when outside AT&T's wireless network. Display on your device will not indicate whether you will incur roaming charges. Services originated or received while outside your plan's included coverage area are subject to roaming charges. Use of Services when roaming is dependent upon roaming carrier's support of applicable network technology and functionality. Check with roaming carriers individually for support and coverage details. Billing for domestic and international roaming usage may be delayed up to three billing cycles due to reporting between carriers. If your usage of the Services on other carriers' wireless networks ("offnet usage") during any two consecutive months exceeds your offnet usage allowance, AT&T may at its option terminate your wireless service or access to data Services, deny your continued use of other carriers' coverage, or change your plan to one imposing usage charges for offnet usage. Your offnet usage allowance is equal to the lesser of 6 megabytes or 20% of the kilobytes included with your plan and for messaging plans the lesser of 3000 messages or 50% of the messages included with your plan. AT&T will provide notice that it intends to take any of the above actions and you may terminate your agreement.

Now that we have discussed the concept of roaming, it's time to get back to the news. The trend to consolidate roaming policies and fees among mobile phone carriers is making an already rough-and-tumble roaming dispute even more volatile. Small carriers have remained dissatisfied with last year’s FCC ruling that declared automatic roaming a common-carrier obligation for cellular operators.

Unfortunately, the FCC ruling has fan the flames over an in-market exemption, the applicability of the mandate to push-to-talk service and the possibility of extending the new rule to high speed wireless Internet services.

To make matters worse the FCC has yet to rule regulatory challenges to its roaming order. Some lawmakers have made inquiries ion to the FCC's plans to proceed on challenges to the automatic roaming ruling.

The legislators are also concerned that the in-market exception will affect districts with large concentrations of low-income and minority citizens. This market is largely served by small and regional wireless providers.

Leap Wireless International Inc., SouthernLINC Wireless, U.S. Cellular Corp., MetroPCS Communications Inc., Sprint Nextel Corp., T-Mobile USA Inc. and several rural telecom associations are questioning the FCC roaming rule.

Well, I hope that the legislators and the FCC can figure out the best solution to this roaming controversy. Tune in to this blog for more wireless contract info and news.

FCC Plans for Wireless Contract and ETF

In my last post I discussed the struggles that are centered on the controversial ETF or early termination fees that are charged for canceling a wireless contract.

Mobile phone companies usually charge early termination fees that can range from $150 to $225. These fees help them to recover the cost of devices, which they subsidize under long-term wireless contracts. These ETF's also lessens the burden signing up new customers. However, these fees have been assailed because they have curtailed the freedom of customers to shift to another carrier. The imposition of these fees have resulted in class-action lawsuits in several states and legislative proposals.

Now it seems that the FCC has decided to act and laid out some proposals on ETFs. Hopefully, these proposals will solve some of the problems concerning this policy but let us first take a look at the FCC proposals.

Kevin Marti, the current FCC Chairman, expressed that the proposal is similar to an industry plan that was offered by mobile phone carriers headed by Verizon Wireless. He also expressed that the proposal was drafted because ongoing class-action lawsuits would probably not provide an answer to the ongoing issues about the unpopular fees.

Here are the main elements of the proposal:

• the ETF would be related to the actual retail price of the device being purchased so that a $100 handset would have a cheaper ETF than a $300 phone

• ETFs should be prorated and reduced over the length of a cell phone contract

• wireless contracts should only last for a reasonable length of time

• Extended wireless contracts should not necessarily have their ETFs reinstated

• allow class action lawsuits regarding ETFs against certain carriers to move forward

These proposals seems to provide some answers to the problems that are plaguing the mobile phone industry, However, some experts think that the proposal lacks many vital elements. For instance, the proposal did not offer specific information on the government body that would be in charge of monitoring ETFs. The proposal also did not propose any federal program that would preempt state governmental rights.

I guess we have to wait for more updates on this development. Let's hope that the FCC and the mobile phone companies can come up with plans to provide the best service to customers. Tune in to this blog for more wireless contracts news and information.

Proposal to Ease ETF's of Wireless Contracts

Here's some more interesting wireless Contract news. CNN.com reported that the government is quietly negotiating to help cell phone customers avoid expensive early termination fees when they decided to cancel their wireless contracts.

Verizon Wireless has submitted a proposal to the FCC after the carrier consulted with other leading mobile phone service providers. The wireless contract proposal to the Federal Communications Commission states that the wireless industry would give consumers the opportunity to cancel service without any penalty. This would only apply up to 30 days after customers sign a cell phone contract or until 10 days after they receive their first mobile phone service bill. The proposal ton the FCC also suggests that the fees should be capped and and be reduce month by month over the course of a contract based on how long customers have left.

The article posted on CNN.Com reports that cell phone companies will be freed from suits filed in state courts by angry customers, in exchange for the government's approval. The proposal ,made by Verizon also request that the authority of states to regulate the charges, known as early termination fees should be taken away. Interestingly, the Federal Communication Commission declined to release any comment on this issue.

However, there have also been reports that the proposal is doomed even before it was filed to the FCC. Those who are close to the issue have suggested that the negotiations are on the verge of collapsing. Key stakeholders are continuing to negotiate on an ETF compromise but there are indications a deal remains an uphill battle. Two consumer groups approached by Verizon Wireless appears not to believe that the concessions offered by industry are adequate when consumers could surrender the ability to take legal action against mobile-phone operators.

I have blogged several times about wireless contract complains arising from ETF's or early termination fees. The wireless industry is currently facing a series of long-running, class-action lawsuits in state courts. If this proposal is unsuccessful, then I don't see the class action suits beign filed against carriers decreasing any time soon.