FCC, Wireless Carriers Agree to New Overage Alert System

The Federal Communications Commission and the nation's wireless carriers have hammered out an agreement that will have wireless operators notifying customers when they are nearing their monthly limits on usage for voice, text, or data services. The FCC estimates that tens of millions of wireless phone subscribers are hit with overage charges each year; their data is based on their own studies on the issue, as well as data from the Government Accountability Office and private research firms.

The new agreement covers all the members of the industry’s largest trade group (CTIA — the Wireless Association), which means that it covers more than 300 million wireless accounts, according to the FCC chairman Julius Genachowski.

"I appreciate the mobile phone companies’ willingness to work with my administration and join us in our overall and ongoing efforts to protect American consumers by making sure financial transactions are fair, honest and transparent," said President Obama is a statement.

Steve Largent, president of CTIA said that this new deal fulfilled a government pledge without imposing new regulations.

A 2010 study by the FCC found that approximately one in six mobile users had experienced what they call "bill shock," with 23 percent of users facing unexpected charges of $100 or more for overages. Another FCC report found that around 20 percent of bill shock complaints it received during the first half of 2010 were for $1,000 or more in overage charges.

Even unlimited data plans often have a caps limiting downloads each month to a certain number of megabytes. Last October, the FCC pointed out the case of a 66-year-old retiree from Dover, Mass., who received an $18,000 bill after the promotional period for his unlimited data plan expired without warning.

While companies have the option to deliver alerts by text or voice, they must be free to customers and automatic. Consumers can also opt out of the service if they so choose. At least two of the four types of alerts must be started by carriers within 12 months, and all alerts must begin within 18 months, according to the agreement. The companies also agreed to promote and publicize tools so that consumers can monitor their own usage. The FCC is working with the nonprofit Consumers Union to track wireless carriers’ compliance.

This new agreement hopes to make that sort of event a thing of the past by notifying customers when overages occur. How carriers will implement this plan remains to be seen but the FCC expects them to have some sort of system in place within a year.

Source: New York Times

Tweet about this on TwitterShare on FacebookShare on Google+Share on RedditEmail this to someone

Leave a Reply