can you hear us now?

Can You Hear Us Now?A Report on How the CellPhone Industry has FailedConsumers

Deirdre CummingsKerry SmithMASSPIRGwww. masspirg.org

March 2005

A MASSPIRG Report on theCell Phone Industry

Including a Shoppers’ Guidefor Consumers

AcknowledgmentsWritten by Deirdre Cummings, Consumer Program Director, MASSPIRG and KerrySmith, Senior Consumer Attorney for the State PIRGs. Edited by Alison Cassidy, Re-search Director for MASSPIRG and Tony Dutzik, Policy Analyst for the State PIRGs.

© 2005, MASSPIRG

The authors would like to thank Patricia Hubbard, MASSPIRG law intern from Suf-folk University Law School, for all her work on this report. Additionally, MASSPIRGthanks Matthew Gens, intern from Dartmouth College for his research and editing ofcell phone plans and prices and Janee Briesemeister, Senior Policy Analyst for Con-sumers Union for her assistance with this report.

To receive a copy of this report, visit our website or send a check for $20, made payableto MASSPIRG, to the following address:

MASSPIRG44 Winter StBoston MA [email protected]

Cover design: Cecily Anderson, Public Interest GRFX

Interior design: Kathleen Krushas, To the Point Publications

Table of Contents

Executive Summary 4

Overview 6

Consumer Complaints about Cell Phones 8Confusing Calling Plans 8Marketing Misrepresentations 10Billing Errors 11Dead Zones and Dropped Calls 12Unauthorized, Unilateral Contract Changes 13Difficulty with Disputes 14Carriers Limit Consumers Rights to Court 15Barriers to Competition 16Cell Phone Number Privacy 17

Hear Us Now: Massachusetts Cell Phone Survey Results 18

Who’s Listening: Federal, State and IndustryResponses to Consumers’ Cell Phone Complaints 20

FCC: Fails to Protect Consumers 20The Role for the States 22

Recommendations 24

Tips for Consumers 26

Methodology 28

MASSPIRG’s Shoppers’ Guide to Cell Phone Service 29

Appendix A: Cell Phone Plan Comparison 32

Appendix B: Survey Results 38

End Notes 43

4 Can You Hear Us Now?

Executive Summary

Consumers increasingly rely on cellphone service to meet their basiccommunication needs. The use of

wireless communications has skyrocketedover the past few years, jumping from ap-proximately 24 million subscribers in1994 to an estimated 170 million today.Along with the growth in the industry hascome an increase in consumer com-plaints. In fact, complaints to the Fed-eral Communications Commission(FCC), the agency charged with oversee-ing competition in the wireless industry,increased almost 40 percent between2002 and 2003, significantly outpacingthe 13 percent growth in subscribers dur-ing that time period.

The problems consumers experiencewith wireless service have taken on in-creasing importance as more consumersbegin to use their cell phones as substi-tutes for traditional landline phones.Unlike traditional phone service, wire-less service is largely unregulated. TheFCC has failed to enact even the mostbasic consumer protection regulations,instead relying almost exclusively on

competition and market forces to protectwireless subscribers. Unfortunately, com-petitive pressures alone are inadequatefor ensuring that consumers are treatedfairly in the wireless marketplace.

In survey after survey, cell phone sub-scribers reveal chronic dissatisfactionwith the wireless industry. Consumersreport difficulty comparing cell phoneplans because information on terms, pric-ing and service is not presented in a uni-form manner. Carriers often fail to clearlydisclose the true cost of their plans, add-ing on various surcharges to consumers’bills. Consumers also cannot adequatelyjudge the quality of the cellular servicein their area before choosing a plan.Moreover, consumers who are fed upwith their carriers’ billing errors and poorcoverage are often locked into long-termcontracts with hefty early terminationfees.

In the summer of 2004, MASSPIRGsurveyed 874 of its members to gauge BayState consumers’ satisfaction with theircell phone service. This survey revealsthat cell phone companies are not pro-

Executive Summary 5

viding Massachusetts customers with thelevel of service quality that subscribersexpect. Specifically:

• Only 57 percent of respondents weremostly or very satisfied with theircell phone service, with fewer than15 percent rating themselves as verysatisfied;

• More than 42 percent said they hadexperienced a billing problem withtheir provider during their contract;and

• More than 68 percent of respondentsreported having problems with thequality of cell phone service, includ-ing dropped calls, lack of coverage,and poor sound quality.

To make matters worse, recent merg-ers within the industry threaten to reducecompetitive pressures on carriers to of-fer better deals and service. Fewer carri-ers competing for consumers’ businesswill likely translate into higher prices andlower quality service for cell phone sub-scribers.

The rising swell of customer dissatis-faction with the cell phone industry dem-onstrates a need for additional consumerprotections. While the FCC has taken a“hands-off” approach to wireless regula-tion, states can play an important role inestablishing a set of basic service qualityand customer service standards. Statesshould provide cell phone users with a billof rights that includes the following pro-visions:

• All wireless contracts and marketingmaterials should clearly spell out theterms of the contract in an easy-to-read, standardized format. Thedisclosures should be made available

and accessible to consumers compar-ing prices and services among com-peting carriers.

• Cell phone bills should be clearlyorganized. Consumers should be ableto dispute billing errors through thestate utility commission. Providersshould not treat the disputed portionof the bill as late or terminate thecontract for non-payment if a com-plaint is pending with the state.

• The state utility commission shouldmonitor service quality. Data shouldbe collected and made publiclyavailable so consumers can comparesignal strength, dropped call countsand dead zones across carriers.

• Consumers should have a risk-freetrial period during which they cancancel any new service contractwithout penalty. This trial periodwould give consumers time toevaluate whether the cell phoneservice works where and how it waspromised. Consumers should have30 days to cancel a contract afterreceiving the first bill so that theymay verify representations regardingthe cost of service.

• Contracts should be for no longerthan one year, with an option forrenewal.

• Carriers should obtain customers’express permission prior to makingcell phone numbers public. Theyshould not charge a fee for keepingthe number private.


Overview

The cell phone has truly revolution-ized the way individuals communi-cate. Over the last decade, the

number of cellular or wireless telephonesubscribers in the United States has ex-ploded, increasing from approximately 24million in 1994 to an estimated 170 mil-lion today, producing a national penetra-tion rate around 58 percent.1 Cell phonesincreasingly serve as a substitute for tra-ditional wireline phones. Almost a thirdof today’s telephone users receive morethan half of their calls on cell phones, andan estimated five to six percent of allhouseholds have “cut the cord” on theirtraditional wireline phones and now relyexclusively on wireless service to meettheir basic calling needs.2

As consumers rely more on wirelessphones, the need for quality service hasbecome increasingly important. Unfor-tunately, cell phone complaints are on therise. Complaints to the Federal Commu-nications Commission (FCC), the agencycharged with overseeing competition inthe wireless industry, jumped almost 40percent between 2002 and 2003, signifi-

cantly outpacing the 13 percent growthin subscribers during that time period.3

In 2003, the latest year for which theFCC has released complaint data, theagency received more than 21,000 com-plaints about wireless service.4 Researchreveals that this number significantly un-derstates the number of consumers ex-periencing problems with cell phoneservice. As a general rule, few consumersactually file complaints when they aredissatisfied with a product or service.5 Inaddition, many consumers do not knowwhere to direct complaints about wire-less service providers. A national surveyof adults, commissioned by the AARP,found that nearly half (46 percent) of cellphone users did not know whom to con-tact if their cell phone provider would notresolve a billing or service problem.6

Only four percent of respondents sur-veyed knew that they could file a com-plaint with the FCC. A U.S. GovernmentAccountability Office (GAO) surveyfound similar results. While 19 percentof the survey respondents had com-plained about the quality of their calls to

Overview 7

their provider, only one percent hadbrought their complaint to the attentionof other parties, such as the FCC, a stateagency or the Better Business Bureau.7

Other national studies have made itclear that cell phone companies are notproviding the level of service quality thatconsumers want and expect. The indus-try had the second-lowest customer sat-isfaction ranking, trailing only cablecompanies, in the University ofMichigan’s consumer satisfaction index.8In addition, wireless carriers were thesecond-largest source of complaints tothe Better Business Bureau in 2003, withonly car dealers performing worse.9

Similarly, Consumer Reports magazinefound that customer satisfaction withwireless phone service is lower than mostother services it measures, putting cellphone companies on par with cable tele-vision and HMOs.10 A September 2004survey of 39,000 of its subscribers re-vealed that only 45 percent of respon-dents were completely satisfied or verysatisfied with their cell phone service.11

The bottom line is that consumers arefrustrated with many aspects of the qual-ity of wireless service. Confusing callingplans, billing errors, hidden fees, droppedcalls, spotty signal coverage, inadequatecustomer service and excessive contracttermination fees are among the long listof consumer complaints. Complaintslogged with the FCC, Consumer Reports,and the Better Business Bureau all indi-cate that consumers are calling out forimproved service quality and consumerprotection standards. Consumers’chronic dissatisfaction begs a simple ques-tion to cell phone providers and regula-tors: Can you hear us now?


C onsumers’ problems with cellphone companies often begin themoment they start shopping for

a plan and can end with hefty early con-tract termination fees.

Confusing Calling PlansShopping around for cell phone ser-

vice can be a daunting task. Consumersare confronted with a wide variety ofplans with complex rate structures thatimpose different restrictions on use. Con-sumers may pay different amounts forcalls depending on whom they are call-ing, when they are calling, where they arelocated when calling, and how many callsthey have already made. Further, com-peting carriers make comparison shop-ping difficult because they do not presentkey price and contract terms in a uniformmanner.

A Consumer Reports survey found that83 percent of respondents experienced

problems when shopping around for a cellphone carrier. At least 48 percent re-ported difficulty comparing plans fromcompeting carriers, and 43 percent saidit was hard to determine the true, finalcost of the service.12

Consumers need to carefully read thefine print of providers’ plans to fully un-derstand the rates they will be charged.Some plans, for example, offer “nation-wide” calling, but some carriers define“nationwide” as anywhere in that carrier’sservice network, not anywhere in thecountry. Once outside of that network,subscribers will have to pay roaming feesthat can be as high as 79 cents per minute.Other plans provide consumers with “un-limited” mobile to mobile minutes. Thedetails of the plans, however, reveal that“unlimited” does not actually mean with-out limitation. Generally, both callersmust be in the carrier’s own service net-work, and the Caller ID number cannotbe blocked in order for the call to qualifyas a mobile to mobile call. That means if

Consumer ComplaintsAbout Cell Phones

Consumer Complaints About Cell Phones 9

one caller is roaming, or if the wirelesssystem does not pass through the CallerID number of the caller, regular rates willapply.

To further complicate comparison-shopping, cell phone carriers do not usestandard terminology. Verizon Wireless,for example, defines “daytime minutes”as those made beginning at 6:00 a.m.Daytime minutes for the other major,national cell phone carriers, however,generally start at 7:00 a.m.

Carriers also make it difficult for con-sumers to determine the actual cost of ser-vice plans. Most carriers have been addingextra fees to the basic monthly charges forcalling plans. These fees are not taxes orgovernment-mandated fees; instead, theyare surcharges that carriers use to recoupthe costs of complying with various federaland state legal requirements. In otherwords, these fees simply cover the cost ofdoing business as a cell phone carrier. Theyare the equivalent of having a line item onbills for the cost of renting office space orpaying employees. By separating out theircost of complying with regulations intosurcharges, the companies’ advertisedprices mislead consumers about the truecost of service. For example, the chart be-low demonstrates how these charges wouldincrease the total cost of an averagemonthly cell phone bill of $49.49 for the

five largest carriers providing coverage inMassachusetts:13

This practice has not gone unchal-lenged. Several carriers faced lawsuits al-leging that they were misrepresentingthese surcharges as government fees ortaxes. As a result, Cingular Wireless,Sprint PCS, Verizon Wireless and Nextelagreed to clarify that these surchargeswere not government-imposed or man-datory.14 Other carriers, including T-Mobile, have made a similar pledgethrough an industry-sponsored voluntarycode of conduct.15 But neither the settle-ment nor the voluntary code requires cellphone companies to include these sur-charges in the advertised price of monthlyservices. As such, the advertised prices ofcell phone plans typically do not repre-sent the true cost of service.

By failing to advertise key informationabout their calling plans in a uniformmanner, cell phone providers have madeit unreasonably difficult for consumers toadequately compare plans among carri-ers. As a result, consumers may end up ina long-term contract with cell phone pro-viders that do not meet their expectations.These consumers can end up paying sub-stantial fees and roaming charges for ex-ceeding their plan’s package of minutesor calling areas.

Carrier Carrier Imposed Surcharge Real Cost of a $49.49 Monthly Plan as of January 7, 2005 Before Taxes and Government Fees

Cingular $1.25 regulatory cost recovery fee and $52.223.0 percent universal service charge

Nextel $1.55 federal program cost recovery fee $51.04

Sprint $0.80 regulatory chargeand 2.5 percent universal service charge $51.53

T-Mobile $0.89 regulatory program fee and0.9 percent universal service charge $50.83

Verizon $0.05 regulatory charge and2.45 percent universal service charge $50.75

Table 1.


MarketingMisrepresentations

Cell phone companies’ confusing call-ing plans and poor disclosure of theircontract terms leave consumers more re-liant on the representations made by car-riers in advertising campaigns andthrough their sales agents. Unfortunately,thousands of consumers have complainedabout being misled about the terms andconditions of their contract through un-fair marketing practices.16

One of the most commonly reportedcomplaints involves sales agents who mis-represent the terms of the cell phone con-tract.17 In these complaints, consumersallege that the salesperson promised somefeature, such as free minutes or long dis-tance, that turns out not to be includedin the plan. When these consumers com-plain directly to the carrier, they often aretold that nothing can be done to rectifythe situation and that they will be boundby the written terms of the contract, re-gardless of what they were told by thesalesperson.18 SmartMoney magazine cap-tured one example of this practice:

John Gourley thought he was do-ing right by his family by signing upfor one of Verizon’s America’s Choiceplans. Gourley, his wife and two chil-dren were to share a pool of 1,000mobile-to-mobile minutes. A truefamily value — that is, until theydiscovered that when they called eachother using cell phones, both userswere charged minutes. For instance,in one month son Paul and daugh-ter Mary used 750 more minutesthan the plan allowed, with each ex-tra minute costing 45 cents.

Gourley says he asked the sales-person at the Verizon store where hepurchased the plan “over and over”if the person making the mobile-to-

mobile call would be the only onecharged for airtime. According toGourley, “He said, ‘Yes, sir.’” Obvi-ously, that turned out not to be thecase. A Verizon spokesperson says thatthe mobile-to-mobile charge is stipu-lated in service contracts.19

Mr. Gourley is not alone. The BetterBusiness Bureau reports that complaintsinvolving unfair marketing and misrep-resentations about contract terms makeup the third largest source of complaintsit receives about cell phone carriers.20

Unfair marketing also appears to be agrowing problem. FCC quarterly reportsreveal that complaints regarding adver-tising and marketing practices of carri-ers, including alleged misrepresentations,increased by 66 percent between 2002and 2003, the last year for which com-plaint data is available.21

An analysis of complaints filed withCalifornia’s Utility Consumer ActionNetwork (UCAN) suggests that misrep-resentations made at the point of sale maybe more acute when consumers sign upfor a plan through third-party retail out-lets, such as the companies that sell cellphone service at kiosks in shopping malls.Sixty-five (65) of the 184 sales-relatedcomplaints made to UCAN about cellphone service involved third-partyagents.22 Unfortunately for those con-sumers, terminating a service agreementinvolving a third-party seller can becostly. Many third-party agents requiresubscribers to sign two contracts—onewith the cell phone carrier and one withthe third-party retailer, which often car-ries an additional contract termination feethat can be as high as $400.

Sales agents are not the only source ofconfusion regarding the terms of serviceagreements. National advertising cam-paigns also gloss over contract limitations.Cingular, for example, has widely adver-


tised its “rollover” minutes. With rolloverminutes, consumers do not lose any un-used free minutes at the end of themonthly billing cycle. Instead, these un-used minutes remain available for con-sumers’ use in future months. Theadvertisements, however, do not point outthat this feature is only available onCingular’s more expensive plans. Simi-larly, Sprint PCS runs advertisementspromoting that its plans’ “nighttime”minutes start at 7 p.m. rather than theindustry standard of 9 p.m. Only in thefine print do these advertisements dis-close that this feature is an option forwhich consumers must pay an additional$5 per month and commit to a two-yearcontract.

Billing ErrorsConsumer problems with cell phone

carriers’ billing practices are the largestsource of cell phone complaints filed withfederal and state regulators and consumerassistance organizations. In 2003, half ofthese complaints filed with the FCC con-

cerned billing and rates.23 Similarly, theCalifornia Public Utility Commissionreports that the majority of the cell phonecomplaints it receives involves billing dis-putes.24 They also account for close totwo-thirds of cell phone complaints filedwith the Better Business Bureau.25

Billing disputes include a range of is-sues. Some consumers report double-bill-ing problems. One consumer explainedthat she had arranged to pay her CingularWireless bill every month automaticallywith her credit card. Even though thecompany already had charged her creditcard, Cingular then sent her paper bills.When she didn’t pay the duplicate bill,they disconnected her service.26

Other consumers complain that theyare charged extra fees for features that areincluded in their plan. Consumer Reportsdocumented one consumer who was rou-tinely billed by AT&T Wireless for longdistance and roaming charges that werefree under the terms of his contract.27 InMinnesota, the Attorney General hasfiled a lawsuit against Cellular One, as-serting that the carrier improperlycharged customers 10 cents a minute for

Complaints Filed with the FCC 2003

Billing & Rates50%

Marketing & Advertising

10%

Contract - Early Termination

11%

Number Portability

16%

Equipment3%

Service Quality10%


inbound calls that were within the sub-scribers’ home rate coverage area.28

Roaming fees are another source ofdiscontent. Under many plans, carrierscharge additional fees on calls that aremade on another carrier’s network out-side of the subscriber’s home calling area.Callers typically have notice when theyare roaming in another carrier’s territorythrough a display on their cell phone.Some consumers, however, report beingcharged expensive roaming fees eventhough their phones did not display thatthey were roaming.29

Even consumers in calling plans with-out roaming fees experience billing prob-lems related to calls made while roamingon another carrier’s network. Often, car-riers do not immediately bill consumersfor the minutes used on another carrier’snetwork because they must wait for theoperators of those networks to providethe billing information. Once carriersreceive the information, they often failto allocate those minutes to the monthsin which the calls were made, instead at-tributing them to the current month’sminute usage. This billing practice cancause consumers who are on plans withmonthly minute caps to pay high “over-age” fees. Joseph Fedor, for example, suedCingular Wireless for improperly billinghim for minutes that he used in onemonth to the billing periods in latermonths. 30 Mr. Fedor complained that thedelayed billing caused him to pay hefty,extra fees for exceeding his monthly al-lotment of minutes. Those charges wouldnot have been incurred had the calls beenproperly billed in the month duringwhich he actually placed the call. A classaction lawsuit has been filed againstAT&T Wireless for the same practice.31

Carriers also are making it increasinglydifficult for consumers to detect billingmistakes. Over the past few years, sev-eral carriers have changed their policies

and are no longer automatically issuingitemized bills. Now subscribers to thesecarriers must pay a fee to have the com-pany mail them bills detailing the callsthat were made and received during thebilling cycle. A lawsuit has been filedagainst Nextel for unilaterally changingits billing policy the month after it sentout four text messages to all its custom-ers, charging them 60 cents to receivethem.32 The lawsuit alleges that Nextel’sdecision to stop sending itemized billsmade it virtually impossible for consum-ers to realize that they were being over-charged for those text messages as wellas other billing errors.

Dead Zones andDropped Calls

Problems with call quality are almostas commonplace as the cell phone itself.Consumers most frequently complain ofdropped calls, poor sound quality anddead zones — geographical areas wherethey cannot receive service. The mostrecent Consumer Reports survey found thatnearly 70 percent of respondents who fre-quently use a cell phone had at least onedropped call in the week prior to the sur-vey, and nearly 60 percent had a badconnection.33 A national GAO study con-ducted in November 2002 found signifi-cant call quality problems as well. Morethan 30 percent of respondents said theyhad been unable to get service on 10 per-cent or more of their attempted calls be-cause of the carrier’s coverage area, and over20 percent had their calls dropped morethan 10 percent of the time.34

A cell phone user’s ability to make andreceive calls is not simply a matter of con-venience. Coverage service gaps can alsobe life threatening to the increasing num-ber of consumers who rely on their cellphone to make emergency calls. A 2002


I purchased a cell phone and plan,living in Central Square, Cam-bridge, MA. I was assured that thephone would have excellent coveragethroughout the Boston area. Fiveweeks after the purchase, I movedabout a mile west, to HarvardSquare, and I got no reception in mybuilding or in front of my building.I went back to AT&T, they told meno dice, sorry, you have to pay a $200cancellation charge, despite the factthat the sales rep. made invalidclaims about the quality of coverage.

Justin, Marshfield MA

Unauthorized, UnilateralContract Changes

Cell phone companies require con-sumers to sign long-term contracts withsubstantial penalties for early termina-tion, but they do not hold themselves tothe same standard. Cell phone carriersroutinely change the length and terms ofcustomers’ contracts without providingadequate notice to consumers and obtain-ing their consent.

A few years ago, for example, VerizonWireless quietly notified its subscribersthat it was unilaterally changing its peakcalling hours from 8 p.m. to 9 p.m., leav-ing thousands of its customers who wereunder long-term contracts with one hourless of free calls each night. Customerswho complained were told that they couldonly cancel the contract if they paid a$175 termination fee. After a Boston re-porter broke the story, hundreds of con-sumers filed complaints with theMassachusetts Office of Consumer Af-fairs and Business Regulation. Faced with

study by the AARP revealed that for cellphone subscribers 65 years and older, themost common reason for purchasing acell phone is for security in case of anemergency.35 In addition, more and morehouseholds are now relying exclusively oncell phones, making their reliability in-creasingly important.

To date, cell phone carriers have beenless than forthright in providing consum-ers with information about their servicecoverage areas. While carriers collectdetailed information about the frequencyof blocked and dropped calls in their net-works, they will not voluntarily share thatinformation with consumers.36 The in-formation they do share is minimal. Thecoverage maps they provide to subscrib-ers typically are only rough estimates oftheir network area and generally includebroad disclaimers indicating that themaps do not guarantee service availabil-ity. Even the information carriers are re-quired to provide to consumers isinsufficient for determining the adequacyof coverage areas. Since November 2004,Cingular, Sprint PCS and Verizon havebeen under a consent agreement with theMassachusetts Attorney General, as partof a settlement with 32 states attorneysgeneral, to provide consumers with de-tailed coverage maps depicting approxi-mate service coverage for each of theirrate plans.37 These maps, however, arelimited in their usefulness, as they typi-cally depict a large, regional area of cov-erage instead of the more detailed,street-level signal strength maps the car-riers often have at their disposal. 38

Without detailed information aboutservice coverage areas, consumers cannoteasily determine which carrier’s networkwill meet their needs. To make mattersworse, consumers who mistakenly choosea carrier with poor coverage will gener-ally be locked into a contract with thatcarrier for one or two years.


negative media attention, Verizon Wire-less eventually abandoned its plan andgrandfathered in existing customers whowere under contract.39

Consumers are not always as fortunatewhen facing cell phone carriers who at-tempt to make unilateral contractchanges. In hearings on the issue, theMinnesota Legislature heard a litany ofcomplaints about such practices. Oneconsumer reported that a company hadchanged his month-to-month agreementto a one-year contract without his con-sent. In fact, he did not even know aboutthe change until he attempted to cancelhis service and was hit with a $150 earlycontract termination fee. Others com-plained of carriers that had extended theircontract terms without their consentwhen they added monthly minutes totheir calling plans.40

Cell phone carriers defend these ac-tions by pointing out that their contractswith consumers allow them to make suchchanges. These “change in terms” con-tract provisions are generally completelyone sided. Nextel’s clause, for example,reads in part, “Subject to applicable law,Nextel may, at any time in its sole discre-tion, modify any of the terms and condi-tions of this agreement, including but notlimited to the rates it charges to cus-tomer.”

Other companies’ contracts are simi-lar in that only the cell phone carrier canmodify the price and terms of the con-tract, despite the fact that both the cus-tomer and the carrier agreed to certainfixed terms when they first entered intothe contract for service. Under these con-tract provisions, a carrier basically canexcuse itself from complying with theterms of the original deal, but a customerwho later wants out of the contract willhave to pay up to $250 as an early con-tract termination penalty.

Difficulty with DisputesCell phone customers aggrieved by

carriers’ practices typically face yet an-other set of obstacles when working toresolve their disputes.

Customer service in the cell phoneindustry is on the decline. According to aJ. D. Power and Associates study, overallsatisfaction with customer care decreased7 percent between 2003 and 2004. Morethan half (56 percent) of cell phone userssurveyed had to contact their carrier’scustomer service department within the lastyear, and many said they had difficulty navi-gating through companies’ automatedresponse systems and reaching a live ser-vice representative. Consumers alsoreported being on hold for an average of6.4 minutes, up a full minute from the pre-vious year.41

Once consumers get through to cus-tomer service, they often do not get theirissue resolved to their satisfaction. Only 31percent of respondents to a 2004 ConsumerReports survey said that a company’s re-sponse to their service inquiry was veryhelpful, and only 40 percent rated responsesto billing inquiries as very helpful.42

Indifferent, ineffective customer servicecan be costly as well as frustrating. Cur-rently, most cell phone carriers’ disputeresolution procedures require customers topay disputed charges up front to avoid ser-vice disconnection. Subscribers who haveincurred erroneous charges often pay thedisputed bills because they fear that theircredit ratings will be harmed if they with-hold payment.43 Others may pay them justto avoid the inconvenience of having thecarrier terminate their service for non-pay-ment. Those consumers who choose towithhold payment often begin accruing latefees and receiving debt collection calls. Alocal Worcester consumer who submittedher story to MASSPIRG was frustrated byCingular’s inability to resolve simple bill-ing errors. She wrote;


Carriers Limit Consumers’Rights to File Claims inCourt

For those consumers who do not giveup, their avenues for redress are limited.Generally, it is not cost-efficient for in-dividual subscribers to spend the time andmoney necessary to dispute erroneouscharges or unfair practices through thelegal system. Furthermore, for many sub-scribers court may not be an option. Vir-tually all cell phone carriers includemandatory arbitration clauses in theircontracts: provisions requiring any futuredisputes to be heard through a privatedispute resolution program rather thancourt.44 Some carriers’ contracts also spe-

I have automatic bill paying through Cingular, and had no problems until my creditcard expired. About 2 months prior to the card expiring, I received a letter fromCingular stating that I needed to update the card number. I called within a week fromreceiving the letter and got the number and expiration date updated. About a monthafter my credit card expired my cell phone was shut off. I called Cingular and thecustomer service rep told me that my new card info had never been changed. So I gavethem all the new credit card numbers and my phone was turned back on later that day.

Another month after this happened, now two months from my credit card expiring,my phone was turned off again. I called Cingular once more and was told that mycredit card information was never updated in the two calls that I had already placed. Igave them my information and hoped this would be the last time I would have to dothis. It took another phone shut off and another very long call to Cingular the nextmonth to get the entire problem finally resolved.

At this point I tried to get out of my contract as I was completely fed up with theircustomer service and the automatic phone shut-offs I had been getting without warn-ing. A customer service manager told me there was nothing that I could do, that I waslocked into the contract for another year. And unless I paid over $300, I could notcancel my contract. I asked him to send me a service agreement stating the things thatCingular is responsible for in our contract. He promised to get it out to me within theweek. Almost a year later, I still have not received any letter or agreement from them.I continue to call and no one will send me the information that I want.

I now feel like I am being held hostage by Cingular.

cifically prohibit subscribers from partici-pating in class action cases.

These arbitration and anti-class actionclauses are problematic for several rea-sons. First, the clauses are typically bur-ied in the fine print of a carrier’s formcontract that few consumers, if any, readand fully understand. Most subscribers,therefore, have not knowingly waivedtheir rights to pursue their carrier in courtshould a dispute arise.

Second, class action lawsuits often arethe only fair and efficient way to pursueunfair and deceptive business practices.Frequently, an individual consumer’sclaim may be so small that it would beimpractical to pursue because the legalcosts will exceed the dollar amount of any


potential recovery. By prohibiting classactions in those cases, arbitration clausescan provide legal immunity to companiesthat engage in unfair practices that causea relatively small injury to a large num-ber of people.

Finally, the procedural rules of manyarbitration programs are unfair to con-sumers. Typically, the rules limit therights of consumers to obtain documentsfrom the other party that they may needto prove their case, and also eliminatetheir rights to appeal decisions should thearbitrator make a legal error.

Given the difficulty consumers havewith resolving disputes with their carri-ers, it is no surprise that approximately35 percent of cell phone subscribers areseriously thinking about switching to an-other provider.45 Unfortunately for theseconsumers, carriers have made that op-tion not so simple.

Barriers to Competition: CellPhone Service Lock Down

Cell phone companies engage in arange of business practices that limit con-sumer choice and undermine competitionamong carriers. As a result, consumerswho are dissatisfied with their cell phoneservice often have difficulty “voting withtheir feet” and switching carriers.

For years, cell phone companiesworked to defeat wireless “local numberportability,” an initiative to allow con-sumers to keep their phone numberswhen they switch cell phone providers.In 1996, Congress charged the FCC withimplementing number portability as partof an effort to encourage competitionamong telecommunication providers.Denying number portability served as abarrier to competition. Consumers whowould otherwise want to change carriersfor better service or prices were staying

with their provider simply because theydid not want to change their phone num-ber.46 The FCC originally established acompliance deadline of June 30, 1999, butthe cell phone industry pushed hard todelay implementation. They filed numer-ous legal challenges to the rules, but onNovember 24, 2003, number portabilitybegan in most areas in of the country.During the first year of implementation,more than 8.5 million consumersswitched carriers and kept their cellphone numbers.47

Despite number portability, cell phonecompanies still successfully employ tac-tics to prevent subscribers from switch-ing carriers. Most carriers locksubscribers into long-term contracts,ranging from one to two years. Some car-riers also require consumers to extendthese contracts whenever they upgrade toa better plan or phone. These long-termcontracts also include high fees for earlytermination, typically between $175 and$250. These fees undermine competitionamong carriers by restricting the abilityof consumers to take advantage of otheroptions in the marketplace. A GAO study

We had a family plan and whenone of the phones broke, I had topay to replace it and, unknowingly,the salesperson also had me extendmy service for 2 years. I thoughtthat it just said that I had a 2-yearplan. I did not realize that it wasan extension. When I went tochange providers, I then had to payan early termination fee. I don’t seewhy getting a new phone, especiallyone that I paid for, should requirean extension of the contract. I feelthat I was conned.

Barbara, Bridgewater MAAT&T/Cingular


found that, for two-thirds of cell phoneusers who wanted to change carriers butdid not, the early termination fee was animportant factor in their decision not toswitch providers. 48

Cell phone companies also are pre-venting customers from keeping their cellphone when they switch providers. Sev-eral providers have installed software ontheir phones that prevents the handsetsfrom being used on their competitors’networks. As a result, consumers areforced to buy a new phone when theyswitch carriers. A lawsuit has been filedchallenging this practice as an anti-com-petitive measure designed to thwart thenew number portability rules.49

Hefty termination fees and handsetlockdowns stop the cell phone marketfrom working efficiently. When cellphone companies erect artificial barriersto competition, consumers suffer becausecarriers have less incentive to offer bet-ter service at lower prices.

Cell Phone NumberPrivacy at Risk

While consumers may now take theircell phone numbers with them when theyswitch carriers, they soon may be losingcontrol over who has access to that num-ber.

Currently, several cell phone compa-nies are working together to create aWireless 411 Service that would allow cellphone numbers to be available for a feeto individuals who use the existing 411directory assistance system.50 The indus-try expects to launch the 411 directoryby the spring of 2005. While carriers donot have plans to make subscribers’ cellphone numbers available in a public di-rectory or database, the 411 directorywould still leave consumers at risk of in-curring charges for unwanted incoming

phone calls and text messages. Becausemost cell phone subscribers pay for all theincoming calls to their phones, it is criti-cal that they retain control over who hasaccess to their number.

The wireless industry claims that onlycell phone subscribers who choose to par-ticipate or “opt in” to the system will havetheir numbers available to those who dial411. But buried in the fine print of manycell phone contracts is a clause allowingthe cell phone company to include thecustomer’s cell phone number in the di-rectory. Even Verizon Wireless, one ofthe few wireless companies to oppose the411 directory, has this clause in its con-tract with subscribers.51 Unlike theseclauses, a meaningful “opt-in” programwould involve carriers obtaining consum-ers’ permission for inclusion in the direc-tory through a signed document that isseparate from carriers’ standard formcontracts for service.

Last year, the U.S. Senate CommerceCommittee passed legislation that wouldhave required carriers to get subscribers’express, written permission before in-cluding their numbers in the directory.But neither the full Senate nor the Houseconsidered the bill.52 The State of Cali-fornia, however, did pass a similar bill intolaw. 53 Similar legislation is now beingconsidered in Connecticut, Georgia,Illinois, South Dakota, Texas and Wash-ington.


W hile several national studieshave found chronic customerdissatisfaction with the cell

phone industry, information regardingMassachusetts consumers’ experiencewith providers has not been readily avail-able. To better gauge Massachusetts resi-dents’ satisfaction with wireless carriers,MASSPIRG conducted an informal sur-vey of 874 of its members who use cellphones. The survey results reveal that cellphone companies are not providing cus-tomers with the level of service or qual-ity that subscribers expect. TheMASSPIRG survey found:

• Only 57 percent of respondents weremostly or very satisfied with theircell phone service, with fewer than15 percent rating themselves as verysatisfied.

• More than 42 percent said they hadexperienced a billing problem withtheir provider, including:

• 18 percent who reported unau-thorized or unexplained chargeson their bills; and

Hear Us Now: MassachusettsCell Phone Survey Results

Hear Us Now: Massachusetts Cell Phone Survey Results 19

• 10 percent who said their billshave not accurately reflected theamount of airtime usage.

• More than 68 percent of respondentsreported having problems with thecell phone service, including:

• more than 52 percent whoexperienced lack of service intheir coverage area;

• almost 45 percent who said theyhad problems with dropped calls;and

• 37 percent who reported poorsound quality.

• 29 percent of respondents withbilling problems and more than21 percent with service com-plaints reported difficulty reach-ing customer service.

• Of those cell phone users whoreported being less than verysatisfied with their service, over35 percent said that early termi-nation fees prevented them fromswitching providers, and another

10 percent said that additionalactivation fees or the cost of a newcell phone prevented them fromchanging providers.


FCC: Fails to ProtectConsumers

The rising swell of customer dissatis-faction with the cell phone industry dem-onstrates a need for additional consumerprotections. Unfortunately, on the na-tional level, the Federal CommunicationsCommission (FCC) has taken a “hands-off” approach to regulating wireless car-riers.

In September 2002, the FCC eliminateda rule requiring carriers to provide subscrib-ers with information detailing their cover-age areas on the grounds that competitionin the marketplace was a strong enoughincentive for carriers to supply this infor-mation to consumers.54 Coverage mapsprovide consumers with the ability to shoparound and compare which carrier has thebest service in their area. They also helpconsumers compare costs among carriersbecause roaming charges in areas that a car-rier does not service can greatly increase asubscriber’s monthly wireless bill. TheFCC eliminated this consumer protectionat the same time that consumer complaintsto the agency about service quality wereincreasing.55

Who’s Listening: Federal,State And Industry Responses ToConsumers’ Cell Phone Complaints

Similarly, the FCC has made it diffi-cult for consumers to review carriers’complaint histories when shopping forcell phone service. The FCC accepts con-sumer complaints about carriers, but willnot disclose the complaint statistics forspecific carriers in its quarterly reportson the wireless industry. In 2003, Con-sumers Union, the publisher of ConsumerReports, was able to obtain complaint datafor each cellular and wireless provider, butonly by going through the burdensomeprocess of filing a Freedom of Informa-tion Act request with the agency.56 TheFCC quarterly reports on complaints alsodo not indicate whether or how the com-plaints were resolved, leaving consumerswith little information about how carri-ers handle customer service problemsbrought to their attention.

To date, the FCC has been reluctantto increase its oversight on the wirelessindustry, and instead appears to believethat competition alone obviates the needfor consumer protection regulations. Af-ter the U.S. Government AccountabilityOffice called on the FCC to include in-formation about mobile phone quality inits annual review of the industry, FCC

Who’s Listening: Federal, State and Industry Responses to Consumer Complaints 21

Chairman Michael Powell offered onlytepid support for the GAO’s recommen-dation, stating that “[t]he Commissionremains dedicated to allowing marketforces to work in order to provide highquality mobile phone service.”57

The FCC’s reliance on market forcesto protect consumers fails to recognizethat an efficient market depends on con-sumers having adequate information. Inthe context of the cell phone market, ifconsumers had better information aboutcarriers’ coverage areas, complaint histo-ries, rates, and service terms in a standard-ized format, then consumers would beable compare offers and choose the pro-vider offering the best combination ofservice quality and price. These informedconsumers, in turn, would force the car-riers to compete with each other and of-fer better prices, coverage areas andservice quality. If consumers lack infor-mation, however, carriers have less incen-tive to compete as vigorously, and serviceand price will not improve.

Unfortunately for consumers, theFCC has failed to recognize that it hasan important role to play in fosteringcompetition by ensuring that consumershave the information they need to makeinformed choices in the marketplace.

In fact, the FCC has taken action thatweakens consumers’ options in the cellphone market. In October 2004, theagency approved a merger betweenAT&T Wireless and Cingular, creatingthe nation’s largest cell phone company.By approving a merger that would allowone company to control so much of theavailable spectrum in the cell phone mar-ket, consumer advocates warned that thedecision signaled to other carriers thatfuture mergers would likely be ap-proved.58 Less than two months later,Sprint PCS and Nextel announced plansto merge into what would be the third-largest cell phone company.59

Fewer cell phone players in the mar-ket likely will result in higher rates anddiminished service quality because com-panies will have less incentive to competeagainst each other to offer better prod-ucts and services.

Source: For 2003 estimated market share: Consumers Union, http://www.consumersunion.org/pub/0511%20FCC_Cell_ComplaintsAll3.pdf ; for estimated merger market share: Wall Street Journal forsubscribers by company (Dec. 16, 2004), CTIA Survey for total number of subscribers, supra note 1.

2003 EstimatedMarket Share

Estimated Market Sharewith Mergers


The Role for the StatesAs the cell phone industry consolidates

under minimal federal oversight, statesneed to take action to protect consum-ers.

Under the federal Telecommunica-tions Act, states have the authority to pro-tect consumers and to adopt servicequality standards for cellular and wire-less carriers. The statute and its legisla-tive history demonstrate that Congressintended states to have the power to regu-late a range of wireless carriers’ practices.The statute expressly reserves the rightof states to regulate the “terms and con-ditions” of wireless service and only pre-empts states from regulating the rates andmarket entry of wireless carriers.60 Thelegislative history of the statute makes itclear that Congress intended to allowstates to enact consumer protection lawsregulating the wireless industry. In itsHouse Report, Congress wrote:

It is the intent of the Committeethat the states still would be ableto regulate the terms and condi-tions of these [wireless] services.By “terms and conditions,” theCommittee intends to includesuch matters as customer billinginformation and practices andbilling disputes and other con-sumer protection matters; facili-ties siting issues (e.g., zoning);transfers of control; the bundlingof services and equipment; andthe requirement that carriersmake capacity available on awholesale basis or such othermatters as fall within a state’s law-ful authority. This list is intendedto be illustrative only and notmeant to preclude other mattersgenerally understood to fall un-der “terms and conditions.”61

The FCC also has acknowledged thatstates have the right to require the dis-closure of rates and billing practices andthat wireless carriers are not exempt fromthe neutral application of state contractand consumer protection laws.62 Addi-tionally, courts generally have interpretedthe preemption provisions of the federallaw narrowly. Several courts have ruledthat the federal Telecommunications Actonly preempts claims that directly regu-late rates and does not necessarily pre-empt those that only indirectly affectrates.63 On similar grounds, some courtshave upheld consumers’ rights to chal-lenge carriers’ early contract terminationfees as invalid under state law.64

In recent years, states have begun toexercise their authority to regulate cellphone carriers. Several states have passedlaws addressing discrete problems in theindustry. Louisiana, for example, nowprohibits cell phone providers from au-tomatically renewing consumers’ con-tracts, and Rhode Island requires carriersto wait at least 30 days before imposinglate fees for delinquent payments.65 In2004, the Minnesota legislature passed abill requiring cell phone companies toobtain consumers’ affirmative consentprior to making changes to the terms ofthe contract, which carriers currently arechallenging in court.66

California was the first state to take amore comprehensive approach to regu-lating the industry. After a four year in-vestigation of consumers’ complaintsabout wireless service, the CaliforniaPublic Utilities Commission (PUC)passed a Telecommunications ConsumerBill of Rights in May of 2004. The rulesprovided consumers with a 30-day rightto cancel a contract without penalty, pro-viding the opportunity to test a carrier’sservice before being locked into a long-term contract. They also required com-panies to disclose clearly in writing the

Who’s Listening: Federal, State and Industry Responses to Consumer Complaints 23

key rates, terms, and conditions of ser-vice, both at the point of sale and online.In addition, the rules established proce-dures for consumers to resolve billingdisputes.

Not surprisingly, the cell phone indus-try staunchly opposed the bill of rights,spending over half a million dollars work-ing to defeat it.67 After they failed to stopthe California PUC from passing thesemodest consumer protections, wirelesscarriers sought to delay their implemen-tation and continued with an aggressivelobbying campaign to repeal the rules.68

For the moment, their lobbying has paidoff. In December 2004, California Gov-ernor Arnold Schwarzenegger, who op-posed the rules, replaced two of threePUC Commissioners who had supportedthe bill of rights. A month later, the newPUC voted to suspend the bill of rights,despite objections from consumer groups,Attorney General Bill Lockyer and all 58district attorneys in California.69 Cur-rently, members of the California legis-lature are working to codify the originalPUC rules into state law.70

Wireless carriers argue that state regu-lations are unnecessary in light of theirown voluntary code of conduct, referredto as the “Consumer Code for WirelessService.”71 The code sets forth 10 prac-tices that carriers are encouraged toadopt. The consumer protections in thecode, however, are fairly minimal andgenerally reflect the industry’s existingpractices. The guideline regarding cus-tomer service, for example, only prom-ises to provide consumers with a toll-freecustomer service number; it establishesno minimum standards for hold times ordispute resolution. Another provisionsimply states that providers will complywith federal and state privacy laws andwill post their online privacy policies. Thecode does provide for a 14-day trial pe-riod during which a subscriber can can-

cel a service contract without having topay an early termination fee. This trialperiod, however, is not long enough forsubscribers to see their first bill and verifythat the rates are in line with any repre-sentations made to them at the time ofsale.

Another problem with the industrycode is that consumers have no way toguarantee that companies are complyingwith it. Cell phone carriers do not haveto agree to follow with the code. And forthose that agree to adhere to it, the con-sequence of non-compliance is minimal.A company that fails to honor the codesimply cannot display the wireless tradeindustry’s “Seal of Wireless Quality/Con-sumer Information.”

Given these limitations, the voluntaryindustry code does not serve as a mean-ingful substitute to state regulation of theindustry.


A Cell Phone Users’Bill of Rights

C ell phone users are clearly onrecord. They have reported alitany of complaints about the

quality of the service provided by wire-less carriers. For years, consumers havebeen dealing with broken promises, poorcall quality, and anti-competitive prac-tices. Now, they are calling out for im-proved service and additional consumerprotections. A May 2004 Consumer Re-ports poll found that more than 70 per-cent support extending a cell phone users’bill of rights to consumers across thecountry.72 An earlier survey of themagazine’s subscribers found that 64 per-cent were concerned with the lack of de-tailed information on service coverageareas and 61 percent objected to earlycontract termination fees.73 It is time forpolicy makers to hear consumers’ call foraction.

The cell phone industry should be gov-erned by basic consumer protection stan-dards. Without these protections, cellphone companies are not accountable for

their business practices. As more consum-ers begin to use cell phones as a substi-tute for traditional phone service,accountability for service becomes in-creasingly important. Cell phones todayare becoming much more of a basic util-ity than a luxury. But consumers do notenjoy the same protections in the wire-less market as they do in the traditionalwireline market.

States have an important role to playin establishing a set of basic service qual-ity and customer service standards bywhich regulators and consumers can holdcarriers accountable. States consideringregulating the industry should ensure thatthe following consumer protection stan-dards are included in any regulatoryframework:

Disclosure:

• All wireless contracts and marketingmaterials should clearly spell out theterms of the contract in an easy-to-read, standardized format. Thedisclosures should be made available

Recommendations

Recommendations 25

and accessible to consumers compar-ing prices and services among com-peting carriers. The disclosuresshould include:

• Rate information, includingmonthly base charge, per-minutecharges for minutes not includedin the plan, the method forcalculating minutes charged, latepayment penalties, and otherusage fees;

• Plan details, including a break-down of weekend/daytime,nights/weekend, long-distance,roaming, incoming calls, anddirectory assistance;

• Termination and start-up fees, aswell as the termination dates forthe trial plan and contract; and

• Taxes and surcharges.

• All providers should provide con-sumers with coverage maps that areas accurate as current technologyallows. These maps should be avail-able on the provider’s Internet site aswell as provided at the point of sale.

Billing:

• Cell phone bills should be clearlyorganized. All mandated governmenttaxes, surcharges and fees required tobe collected from consumers and tobe remitted to federal, state, or localgovernments should be listed in aseparate section of the bill andclearly itemized. This section of thebill should not include any chargesthe carrier is not required to remit tothe government.

• Roaming calls should be itemized onthe bill within 60 days of the call,identifying the date and location ofthe call.

• Consumers should not be held liablefor calls made after a phone is stolenas long as the consumer promptlyreported the theft to the serviceprovider.

• Consumers should be able to filebilling disputes with the state utilitycommission. Providers should nottreat the disputed portion of the billas late or terminate the contract fornon-payment if a complaint ispending with the state.

Service Quality:

• The state utility commission shouldmonitor service quality. Data shouldbe collected and made publiclyavailable so consumers can comparesignal strength, dropped call countsand dead zones across carriers.

Service Contracts:

• Consumers should have a risk-freetrial period during which they cancancel any new service contractwithout penalty. This gives consum-ers time to see whether the phoneworks where and how it was prom-ised. Consumers should have 30 daysto cancel after receiving the first billso they can verify representationsregarding the cost of service.

• Contracts should be for no longerthan one year, with an option forrenewal. In addition, carriers shouldnot extend a customer’s contractwithout obtaining a customer’swritten permission. Currently, many


consumers do not realize that theyare extending their contracts byupgrading their phones or by in-creasing or decreasing the minutes intheir plans.

• Any material changes that a carriermakes to a contract should be pro-vided to customers in advance, andcustomers should have a 30 dayopportunity to terminate the con-tract without penalty and to receive apro-rated refund of the charges theypaid for purchasing a phone for thecarrier’s network.

• Contracts should not waive or havethe practical effect of waiving con-sumers’ rights to resolve any disputesthat arise under the contract byobtaining relief on a class actionbasis.

Consumer Privacy:

• Carriers should obtain customers’express permission prior to makingcell phone numbers public. Theyshould not charge a fee for keepingthe number private.

Tips for ConsumersIn the largely unregulated cell phonemarket, consumers need to carefullychoose providers and monitor thecarrier’s practices once a contract issigned. MASSPIRG Education Fund of-fers the following tips for consumers:

• Before signing up, understandyour choices. Carriers make itdifficult to compare cell phone plans,so take the time to investigate youroptions. Ask friends, family andcoworkers for recommendations ofcarriers that provide good call qualityin your area. Use the Shoppers’Guide at the end of this report tocompare the prices and terms ofplans. Carriers regularly change theirplans and fees, so be sure to get themost updated quotes from thecarriers themselves.

• Make the contract work underyour terms. Before you sign on thedotted line, read the service contractcarefully and understand all theterms. You will be bound by them.Consider striking any clauses thatrequire you to waive your right tocourt and class-action relief or thatallow the carrier to modify thecontract at any future point. Thecarrier ultimately may not agree to

Recommendations 27

your suggested contract changes, butat the very least you can express yourdissatisfaction with the terms of itsform contract.

• Review your bills carefully. Billingmistakes are the largest source ofcomplaints about cell phone compa-nies reported to the FCC. When youget your first bill, read it carefully toverify that the cost and terms of theplan are the same as those thecompany represented to you. If theyare not, file a complaint with theFCC (1-888-225-5322) and theOffice of the Attorney General (MA617-727-8400).

• Protect your privacy. Add your cellphone number to the national DoNot Call Registry by calling 1-888-382-1222 from the number of yourcell phone, or log on towww.donotcall.gov. Taking thisaction won’t stop your cell phonenumber from being listed in a 411directory, but it can help ensure thatyou don’t get unsolicitedtelemarketing calls.

• Get involved. Cell phone companiesare lobbying hard to keep from beingregulated. If you want more con-sumer protections, make sure yourvoice is heard by contacting yourstate and local representatives.


Methodology

This report is based upon a reviewand analysis of surveys and reportsregarding consumers’ experiences

with wireless carriers completed by theAARP, the Better Business Bureau, theCalifornia Utility Consumers’ ActionNetwork (UCAN), Consumers Union,the Federal Communications Commis-sion (FCC), the Government Account-ability Office (GAO), and J. D. Powerand Associates. The authors also exam-ined the terms and conditions of ser-vice published by the five majornational wireless providers, as well astheir rating plans for Massachusettsconsumers as of February 2005.

In August of 2004, MASSPIRG in-vited its members to complete a surveyregarding their experiences with cellphone service providers. Data was col-lected from 884 respondents throughthe website www.surveymonkey.com.Of those who responded, 874 indicatedthat they subscribed to a cell phone ser-vice. The complete list of survey ques-tions and responses is attached inAppendix B.

In January of 2005, MASSPIRGasked its members to submit specificproblems they have had with their cellphone providers. Some of those re-sponses appear in this report.


Shopping for a cell phone plan canbe a daunting task. Calling planscan be complicated and confusing.

And competing carriers make compari-son shopping difficult because they do notpresent key price and service conditionsin a uniform manner. This Shopper’s Guideto Cell Phone Service is designed to helpyou understand some of the key factorsto consider when choosing a plan. In ad-dition, in the pages that follow, you willfind a detailed breakdown of the majorcalling plans offered by the five nationalcarriers. Use this information whenchoosing a cell phone service, but beaware that carriers frequently changetheir calling plans. Check with the car-rier for the most updated information.

COVERAGE: “Coverage” is the geo-graphical area within which you can useyour cell phone to make and receive calls.Coverage can vary greatly by carrier be-cause it is primarily determined by wherethe carrier has built up its network. Mostcarriers can provide you with maps out-lining their coverage areas, but typically

MASSPIRG’s Shoppers’ Guideto Cell Phone Service

these are only rough estimates of the geo-graphic area they cover. They do notguarantee that your phone will work inall areas on the coverage map. Areas onthe coverage map in which you cannotuse your phone are often referred to as“dead zones.” Dead zones can be causedby hills, buildings, and even foliage block-ing the signal between the carrier’s towerand your phone.

Tip: It will be difficult to adequatelyjudge the quality and coverage of the cel-lular service in your area before you buya phone and sign a contract. Ask friends,family and coworkers for recommenda-tions of carriers that provide good callquality in your area. Ask each carrier howmuch of a trial period they will provideyou for testing out the coverage of yourphone. Most of the national carriers of-fer 14-day to 30-day trial periods.

CALLING PLANS: Many cell phonecompanies offer local, regional, and na-tional calling plans. Each plan will desig-nate a specific calling area where you canmake a certain number of minutes of calls


each month for a set price. Calls madeoutside of that calling plan can carry anextra per-minute, long-distance charge.

Tip: To pick the best plan for you, fig-ure out whether you will be making mostof your calls locally or outside of thecarrier’s local or regional areas.

ROAMING: “Roaming” refers tocalls that you make or receive either whenyou are outside of your home calling planor on another carrier’s network. Some cellphone plans charge high fees for roam-ing; others do not. Several carriers reservethe right to terminate service if overhalf of your calling time is used whileroaming.

Tip: Be aware that even “nationwide”plans can include roaming fees. Somecarriers define “nationwide” as anywherein that carrier’s service network, not any-where in the country. Once outside of thatnetwork, subscribers will have to payroaming fees that can be as high as 79cents per minute.

INCLUDED MINUTES: Most car-riers offer different calling plans that in-clude a set amount of minutes for use eachmonth. This is often called a “basket” or“bucket” of minutes. Generally, if you usemore than that specified amount of min-utes, you will have to pay additionalcharges. Many carriers will offer a lim-ited amount of daytime or “peak” min-utes and unlimited “off-peak” minutes. Inaddition, some carriers offer plans withadditional minutes that can be used forcalling other subscribers to that carrier’snetwork.

Tip: Carriers can define “peak” and“off-peak” minutes differently. Read thecontract terms carefully to understand thebucket of minutes included in a particu-lar plan. Exceeding your allotted minutescan be costly.

SERVICE CONTRACTS: The fivenational carriers all require that new cus-tomers sign a one to two year contractfor service, unless they sign up for pre-paid plans. While many carriers will al-low you to move from one of its callingplans to another while you are under con-tract, making this kind of change will of-ten extend the length of your contractwith the carrier. Most contracts carry ahigh cancellation fee if you decide to can-cel the service early.

Tip: Read the service contract carefully.Most providers’ contracts include clausesthat allow them to modify the contract atany point in the future and that prohibityou from resolving any disputes throughcourt or class actions. Consider strikingout these kind of clauses. The carrier ul-timately may not agree to your suggestedcontract changes, but at the very least youcan express your dissatisfaction with theterms of its form contract.

MONTHLY BILLING: Some carri-ers will provide you with “detailed billing,”itemizing each call you made or receivedduring a billing cycle, at no cost; others willcharge a fee for this information.

Tip: Billing mistakes are the largestsource of complaints about cell phonecompanies reported to the FCC. Whenyou get your first bill, read it carefully toverify that the cost and terms of the planare the same as the company representedto you.

IF SOMETHING GOES WRONG:If you are unable to resolve billing or ser-vice problems by contacting your carrierdirectly, you may want to file a complaintor take further action. Consider the fol-lowing options:

Federal Communications Commission(FCC): The FCC has regulatory author-


ity over cell phone carriers. To file a com-plaint with FCC’s Consumer & Govern-mental Affairs Bureau, call1-888-225-5322 or visit: www.fcc.gov/cgb/complaints.html.

Massachusetts Attorney General: TheMassachusetts Attorney General’sOffice provides mediation services forconsumers who file written complaints.A complaint form can be mailed to you,or you can download it from the Attor-ney General’s website. Call 617-727-8400 or visit www.ago.state.ma.us/sp.cfm?pageid=1135.

Small Claims Court: If you are unableto resolve your dispute, you may want tofile a claim against the carrier in smallclaims court. Some contracts allow con-sumers to pursue this option. Others mayprohibit it, but those clauses can be chal-lenged in some circumstances. For a con-sumer guide on how to use the SmallClaims Court go to www.masspirg.org/and click on Consumer Action.


Appendix A:Cell Phone PlanComparison

Appendix A 33

NOTE: Except where otherwise specified, plan prices and itemized billing are monthly fees, and charges for early contract termination as well as activation are one-time fees.

Minutes Included

Cingular Plan Anytime Nights & $ Cost per $ Cost Roaming Early Contract Activation Itemized Long Distance Free Calls toPlan Name Price Wknds. min. over per min. per minute Termination Fee Billing Charges Other Customers?

Cingular Nation $29.99 200 1000 $0.45 $0.15 none*** $150 $36 free* none $9.99/mo.$39.99 450 5000 $0.45 $0.09 none*** $150 $36 free* none yes$49.99 600 unltd. $0.40 $0.09 none*** $150 $36 free* none yes$59.99 900 unltd. $0.40 $0.07 none*** $150 $36 free* none yes$69.99 1100 unltd. $0.35 $0.07 none*** $150 $36 free* none yes$84.99 1500 unltd. $0.35 $0.06 none*** $150 $36 free* none yes$99.99 2000 unltd. $0.25 $0.05 none*** $150 $36 free* none yes

$149.99 3000 unltd. $0.25 $0.05 none*** $150 $36 free* none yes$199.99 4000 unltd. $0.20 $0.05 none*** $150 $36 free* none yes$249.99 6000 unltd. $0.10 $0.05 none*** $150 $36 free* none yes

Cingular Nation Family Talk $39.99 450 5000 $0.45 $0.09 none*** $150 $36 free* none yes$49.99 600 unltd. $0.40 $0.09 none*** $150 $36 free* none yes$59.99 900 unltd. $0.40 $0.07 none*** $150 $36 free* none yes$69.99 1100 unltd. $0.35 $0.07 none*** $150 $36 free* none yes$84.99 1500 unltd. $0.35 $0.06 none*** $150 $36 free* none yes$99.99 2000 unltd. $0.25 $0.05 none*** $150 $36 free* none yes

$149.99 3000 unltd. $0.15 $0.05 none*** $150 $36 free* none yes$199.99 4000 unltd. $0.10 $0.05 none*** $150 $36 free* none yes$249.99 6000 unltd. $0.07 $0.05 none*** $150 $36 free* none yes

Cingular Region $39.99 600 5000 $0.45 $0.07 $0.79 $150 $36 free* incl. in roaming $9.99/mo.$49.99 800 unltd. $0.40 $0.07 $0.79 $150 $36 free* incl. in roaming $9.99/mo.$69.99 1300 unltd. $0.35 $0.06 $0.79 $150 $36 free* incl. in roaming $9.99/mo.$84.99 1600 unltd. $0.35 $0.06 $0.79 $150 $36 free* incl. in roaming $9.99/mo.

Cingular Region Family Talk $39.99 600 5000 $0.45 $0.07 $0.79 $150 $36 free* incl. in roaming $9.99/mo.$49.99 800 unltd. $0.40 $0.07 $0.79 $150 $36 free* incl. in roaming $9.99/mo.$69.99 1300 unltd. $0.35 $0.06 $0.79 $150 $36 free* incl. in roaming $9.99/mo.$84.99 1600 unltd. $0.35 $0.06 $0.79 $150 $36 free* incl. in roaming $9.99/mo.

Prepaid Mobile to Mobile $.25/min** none none n/a $0.25** none n/a none n/a none • no

Prepaid Ten Cent $.10/min none none n/a $0.10 none n/a none n/a none • no$1.00/day

Take Charge $29.99 200 none n/a $0.15 none n/a none n/a none • no$39.99 307 1000 n/a $0.13 none n/a none n/a none • no$49.99 400 unltd. n/a $0.125 none n/a none n/a none • no$59.99 500 unltd. n/a $0.12 none n/a none n/a none • no$79.99 800 unltd. n/a $0.10 none n/a none n/a none • no

Night: 9:00 PM to 7:00 AM Monday through Friday

Weekend: All day Saturday and Sunday

*Cingular’s itemized billing is free, but one must opt in.

** $.10/min mobile-to-mobile

***Cingular reserves the right to terminate service if at least half of monthly call time, over a period of three billing cycles, is used while roaming

•␣ there is an additional $.15/min. charge for long distance to Canada and to Mexico.

Time until Early Termination Fee goes into Effect: 30 days

All charges are subject to additional 3% Federal and 5% MA taxes (state taxes range from 5-8%).


Minutes Included

Nextel Plan Anytime Nights & $ Cost per $ Cost Roaming Early Contract Activation Itemized Long Distance Free Calls toPlan Name Price Wknds. min. over per min. per minute Termination Fee Billing Charges Other Customers?

Local Instant Connect $39.99 500 unltd. $0.40 $0.08 none $200 $35 $2.50 $.20/min yes$49.99 700 unltd. $0.40 $0.08 none $200 $35 $2.50 $.20/min yes$65.99 1250 unltd. $0.40 $0.06 none $200 $35 $2.50 $.20/min yes

Local Instant Connect UDC $35.99 0 unltd. $0.40 n/a none $200 $35 $2.50 $.20/min yes

National Unlimited NDC Plus $199.99 unltd unltd. n/a n/a none $200 $35 $2.50 none yes

Nextel National Free Incoming° $49.99 300 unltd. $0.40 $0.17 none $200 $35 $2.50 none yes$59.99 500 unltd. $0.40 $0.12 none $200 $35 $2.50 none yes$79.99 800 unltd. $0.40 $0.10 none $200 $35 $2.50 none yes

$109.99 1200 unltd. $0.40 $0.10 none $200 $35 $2.50 none yes

Nextel National Power $45.99 500 unltd. $0.40 $0.10 none $200 $35 $2.50 none yes$55.99 800 unltd. $0.40 $0.07 none $200 $35 $2.50 none yes$69.99 1200 unltd. $0.40 $0.06 none $200 $35 $2.50 none yes$85.99 1400 unltd. $0.40 $0.07 none $200 $35 $2.50 none yes$99.99 2000 unltd. $0.40 $0.05 none $200 $35 $2.50 none yes

$149.99 3000 unltd. $0.40 $0.05 none $200 $35 $2.50 none yes

Nextel National Team Share $39.99 400 unltd. $0.40 $0.10 none $200 $35 $2.50 none 100 min$49.99 600 unltd. $0.40 $0.09 none $200 $35 $2.50 none 250 min$69.99 900 unltd. $0.40 $0.08 none $200 $35 $2.50 none 250 min$89.99 1200 unltd. $0.40 $0.08 none $200 $35 $2.50 none 250 min

(Add-on Line) $19.99 0 unltd. $0.40 n/a none $200 $35 $2.50 none 250 min

Nights: 9:00 PM to 7:00 AM

Weekends: 9:00 PM Friday to 7:00 AM Monday



° All incoming calls are free.

Any consumer using this guide should contact the company for their most up-to-date pricing information.

Prices for this survey were gathered February, 2005.

Nights: 9:00 PM to 7:00AM Monday through Thursday°°°°Weekends: 9:00 PM Friday through 7:00 AM Monday°°Adding the America Option to any Sprint PCS Plan for $5.00 monthly eliminates roaming charges, but Sprint reserves the right to

terminate service if at least half of monthly call time is used while roaming.

°°° This feature requires a two-year agreement.

°°°° Sprint PCS offers the option for $5.00 monthly to begin night hours at 7 PM.Time until Early Termination Fee goes into Effect: 14 daysAll charges are subject to additional 3% Federal and 5% MA taxes (state taxes range from 5-8%).

∆This option is only for plans of at least 500 anytime minutes, and furthermore it is free for plans of at least 2000 anytime minutes

≈ only good for up to 3 additional lines

Key for

Appendix A 35

Minutes Included

Sprint PCS Plan Anytime Nights & $ Cost per $ Cost Roaming°° Early Contract Activation Itemized Long Distance Free Calls toPlan Name Price Wknds. min. over per min. per minute Termination Fee Billing Charges Other Customers?

Free & Clear - Area Wide $45.00 1000 unltd. $0.50 $0.05 $0.50 $150 $36 free $.25/min $5/mo.if roaming

Free & Clear - Nationwide $35.00 300 unltd. $0.40 $0.12 $0.50 $150 $36 free none $5/mo.$40.00 500 unltd. $0.40 $0.08 $0.50 $150 $36 free none $5/mo.$50.00 700 unltd. $0.40 $0.08 $0.50 $150 $36 free none $5/mo.$65.00 1100 unltd. $0.40 $0.06 $0.50 $150 $36 free none $5/mo.$80.00 1400 unltd. $0.40 $0.06 $0.50 $150 $36 free none $5/mo.

$100.00 2000 unltd. $0.40 $0.05 $0.50 $150 $36 free none $5/mo.

Add-a-Phone to Free & Clear∆ $20.00 n/a unltd. $0.50 n/a $0.50 $150 $36 free none yes °°°

Fair & Flexible - Option One $35.00 0-300 unltd. n/a $0.12 $0.50 $150 $36 free none $5/mo.$40.00 301-400 unltd. n/a $0.10 $0.50 $150 $36 free none $5/mo.$45.00 401-500 unltd. n/a $0.09 $0.50 $150 $36 free none $5/mo.

$45.00+ 501+ unltd. $0.10 $0.10 $0.50 $150 $36 free none $5/mo.Fair & Flexible - Option Two $50.00 0-700 unltd. n/a $0.08 $0.50 $150 $36 free none $5/mo.

$55.00 701-800 unltd. n/a $0.07 $0.50 $150 $36 free none $5/mo.$60.00 801-900 unltd. n/a $0.07 $0.50 $150 $36 free none $5/mo.$65.00 901-1000 unltd. n/a $0.07 $0.50 $150 $36 free none $5/mo.$70.00 1001-1100 unltd. n/a $0.07 $0.50 $150 $36 free none $5/mo.$75.00 1101-1200 unltd. n/a $0.07 $0.50 $150 $36 free none $5/mo.$80.00 1201-1300 unltd. n/a $0.07 $0.50 $150 $36 free none $5/mo.$85.00 1301-1400 unltd. n/a $0.06 $0.50 $150 $36 free none $5/mo.$90.00 1401-1500 unltd. n/a $0.06 $0.50 $150 $36 free none $5/mo.$95.00 1501-1600 unltd. n/a $0.06 $0.50 $150 $36 free none $5/mo.

$100.00 1601-1700 unltd. n/a $0.06 $0.50 $150 $36 free none $5/mo. $100.00+ 1701+ unltd. $0.05 $0.05 $0.50 $150 $36 free none $5/mo.

Fair & Flexible - Option Three $100.00 0-2000 unltd. n/a $0.05 $0.50 $150 $36 free none $5/mo.$110.00 2001-2200 unltd. n/a $0.05 $0.50 $150 $36 free none $5/mo.$120.00 2201-2400 unltd. n/a $0.05 $0.50 $150 $36 free none $5/mo.$130.00 2401-2600 unltd. n/a $0.05 $0.50 $150 $36 free none $5/mo.$140.00 2601-2800 unltd. n/a $0.05 $0.50 $150 $36 free none $5/mo.$150.00 2801-3000 unltd. n/a $0.05 $0.50 $150 $36 free none $5/mo.

$150.00+ 3001+ unltd. $0.05 $0.05 $0.50 $150 $36 free none $5/mo.Fair & Flexible for Families-

- Option One $70.00 0-800 unltd. n/a $0.09 $0.50 $150 $36 free none yes$75.00 801-900 unltd. n/a $0.09 $0.50 $150 $36 free none yes$80.00 901-1000 unltd. n/a $0.08 $0.50 $150 $36 free none yes$85.00 1001-1100 unltd. n/a $0.08 $0.50 $150 $36 free none yes$90.00 1101-1200 unltd. n/a $0.08 $0.50 $150 $36 free none yes$95.00 1201-1400 unltd. n/a $0.07 $0.50 $150 $36 free none yes

$100.00 1401-1600 unltd. n/a $0.07 $0.50 $150 $36 free none yes$105.00 1601-1800 unltd. n/a $0.06 $0.50 $150 $36 free none yes$110.00 1801-2000 unltd. n/a $0.06 $0.50 $150 $36 free none yes

$110.00+ 2001+ unltd. $0.05 $0.05 $0.50 $150 $36 free none yesFair & Flexible for Families -

Option Two $125.00 0-2500 unltd. n/a $0.05 $0.50 $150 $36 free none yes$135.00 2501-2700 unltd. n/a $0.05 $0.50 $150 $36 free none yes$145.00 2701-2900 unltd. n/a $0.05 $0.50 $150 $36 free none yes$155.00 2901-3100 unltd. n/a $0.05 $0.50 $150 $36 free none yes$165.00 3101-3300 unltd. n/a $0.05 $0.50 $150 $36 free none yes$175.00 3301-3500 unltd. n/a $0.05 $0.50 $150 $36 free none yes

$175.00+ 3501+ unltd. $0.05 $0.05 $0.50 $150 $36 free none yesAdd-a-Phone to

Fair & Flexible for Families ≈ $10.00 n/a unltd. n/a n/a $0.50 $150 $36 free none yes °°°See key on page 34




Minutes Included

T-Mobile Plan Anytime Nights & $ Cost per $ Cost Roaming Early Contract Activation Itemized Long Distance Free Calls toPlan Name Price Wknds. min. over per min. per minute Termination Fee Billing Charges Other Customers?

Basic $19.99 60 500^ $0.45 $0.33 none $200 $35 free none $6.99/mo.

Basic Plus $29.99 300 unltd.^ $0.40 $0.10 none $200 $35 free none $6.99/mo.

Boston Regional Rate Plan $49.99 3000 none $0.35 $0.02 $0.49 $200 $35 free $.20/min no

Family Time $69.99 900 unltd $0.35 $0.08 none $200 $35 free none yes

Family Time Basic $49.99 400 unltd $0.40 $0.13 none $200 $35 free none yes

Family Time Plus $99.99 1600 unltd $0.35 $0.07 none $200 $35 free none yes

Family Time Ultra $129.99 2500 unltd $0.35 $0.06 none $200 $35 free none yes

Get More $39.99 600 unltd $0.40 $0.07 none $200 $35 free none $6.99/mo.

Get More 1000 Promo ∆ $39.99 1000 unltd^ $0.40 $0.04 none $200 $35 free none $6.99/mo.

Get More 1000 Promo ∆ $45.99 1000 unltd $0.40 $ 0.05 none $200 $35 free none $6.99/mo.

Get More Max $99.99 2500 unltd $0.30 $0.04 none $200 $35 free none $6.99/mo.

Get More Supra $129.99 5000 unltd $0.30 $0.03 none $200 $35 free none $6.99/mo.

Get More Ultra $79.99 1500 unltd $0.40 $0.06 none $200 $35 free none $6.99/mo.

Pay-As-You-Go $10.00 30 none n/a $0.33 none n/a none n/a none no$25.00 100 none n/a $0.25 none n/a none n/a none no$50.00 250 none n/a $0.20 none n/a none n/a none no

$100.00 685 none n/a $0.15 none n/a none n/a none no


Weekends: 12:00 AM Saturday to 11:59 PM Sunday

^ Weekend minutes only, no nights

∆ New customers only

Appendix A 37

Minutes Included

Verizon Anytime Nights & $ Cost per $ Cost Roaming Early Contract Activation Itemized Long Distance Free Calls toPlan Name Plan Price Wknds. min. over per min. per minute Termination Fee Billing Charges Other Customers?

America’s Choice $39.99 450 unltd. $0.45 $ 0.09 $0.69 $175 $35/1yr, $15/2yr $1.99 none yes$59.99 900 unltd. $0.40 $0.07 $0.69 $175 $35/1yr, $15/2yr $1.99 none yes$79.99 1350 unltd. $0.35 $0.06 $0.69 $175 $35/1yr, $15/2yr $1.99 none yes$99.99 2000 unltd. $0.25 $0.05 $0.69 $175 $35/1yr, $15/2yr $1.99 none yes

$149.99 3000 unltd. $0.25 $0.05 $0.69 $175 $35/1yr, $15/2yr $1.99 none yes$199.99 4000 unltd. $0.20 $0.05 $0.69 $175 $35/1yr, $15/2yr $1.99 none yes$299.99 6000 unltd. $0.20 $0.05 $0.69 $175 $35/1yr, $15/2yr $1.99 none yes

America’s Choice $59.99 400 unltd. $0.45 $0.15 $0.69 $175 $35/1yr, $15/2yr $1.99 none yeswith Push to Talk $79.99 800 unltd. $0.40 $0.10 $0.69 $175 $35/1yr, $15/2y $1.99 none yes

$99.99 1200 unltd. $0.35 $0.08 $0.69 $175 $35/1yr, $15/2yr $1.99 none yes$119.99 2000 unltd. $0.25 $0.06 $0.69 $175 $35/1yr, $15/2yr $1.99 none yes$169.99 3000 unltd. $0.25 $0.06 $0.69 $175 $35/1yr, $15/2yr $1.99 none yes$219.99 4000 unltd. $0.20 $0.05 $0.69 $175 $35/1yr, $15/2yr $1.99 none yes$319.99 6000 unltd. $0.20 $0.05 $0.69 $175 $35/1yr, $15/2yr $1.99 none yes

Local Digital Choice $39.99 400 unltd. $0.45 $0.10 $0.69 $175 $35/1yr, $15/2yr $1.99 $.20/min yes^^^$59.99 700 unltd. $0.40 $0.09 $0.69 $175 $35/1yr, $15/2yr $1.99 $.20/min yes^^^

National Single Rate $35.00 150 unltd. $0.40 $0.23 free $175 $35/1yr, $15/2yr $1.99 none no$55.00 400 unltd. $0.35 $0.14 free $175 $35/1yr, $15/2yr $1.99 none no$75.00 600 unltd. $0.35 $0.13 free $175 $35/1yr, $15/2yr $1.99 none no$100.00 900 unltd. $0.25 $0.11 free $175 $35/1yr, $15/2yr $1.99 none no$150.00 1500 unltd. $0.25 $0.10 free $175 $35/1yr, $15/2yr $1.99 none no$200.00 2000 unltd. $0.20 $0.10 free $175 $35/1yr, $15/2yr $1.99 none no$300.00 3000 unltd. $0.20 $0.10 free $175 $35/1yr, $15/2yr $1.99 none no

Pay As You Go $.10/min. none none n/a $0.10 $0.99 $175 $35 $1.99 none no$.25/call


Weekends: 12:00 AM Saturday to 11:59 PM Sunday

^^^ This only applies if customers are within the local calling area.






Appendix BMASSPIRG Cell

Phone Survey

Appendix B 39

MASSPIRG Cell Phone Survey

874 respondents

873 respondents

870 respondents


MASSPIRG Cell Phone Survey

868 respondents

369 respondents

Appendix B 41

868 respondents

608 respondents


867 respondents

625 respondents

Notes 43

1. Cellular Telecommunications & Internet As-sociation (CTIA), Wireless Industry Indices: Semi-Annual Data Survey Results (results through June2004) (“CTIA Survey”), available at: http://files.ctia.org/pdf/CTIAMidyear2004Survey.pdf.In its October 24, 2004 press release announcingthe results of the survey, CTIA estimated totalcurrent subscribership at more than 170 million.The nationwide penetration rate is calculated bydividing total mobile telephone subscribers by thetotal U.S. population. According to the Bureauof the Census, the combined population of the50 states, the District of Columbia, and PuertoRico as of July 1, 2004 was estimated to be 293.7million. See U.S. Census Bureau, Population Esti-mates: Annual Population Estimates April 1, 2000 –July 1, 2004, available at: www.census.gov/popest/states/.

2. Federal Communications Commission, Imple-mentation of Section 6002(b) of the Omnibus BudgetReconciliation Act of 1993, Annual Report and Analy-sis of Competitive Market Conditions with Respect toCommercial Mobile Services, Ninth Report, ¶¶ 212-213 (2004) (“Ninth Report”), available at http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-04-216A1.pdf, citing statistics from a spe-cial supplement to the February 2004 CurrentPopulation Survey of the Census Bureau andDavid Janazzo, Wendy Liu, and Linda Mutschler,The Next Generation VIII, Merrill Lynch, GlobalSecurities Research & Economics Group, Mar.15, 2004 at 41.

3. The number of wireless complaints made tothe FCC totaled 15,329 in 2002 and 21,357 in

2004. See, Federal Communications Commission,Quarterly Reports on Informal Consumer Inquiriesand Complaints, (1st, 2nd, 3rd, and 4th Quarters2002 and 2003) (“FCC Complaint Reports”), avail-able at http://www.fcc.gov/cgb/. The number ofwireless subscribers, according to the FCC, to-taled 141.8 million in 2002 and 160.6 million in2003. See, “Ninth Report,” supra note 2 at 6.

4. Id.

5. As a general matter, only a small portion ofconsumers file complaints about consumer prob-lems. See, Arthur Best, When Consumers Complain,at 118 (Columbia University Press, 1981).

6. Baker & Kim-Sun, “Understanding ConsumerConcerns about the Quality of Wireless Telephone Ser-vice,” AARP Public Policy Institute (June 2003)(“Understanding Consumer Concerns”).

7. United States Government Accountability Of-fice, Telecommunications: FCC Should Include CallQuality in its Annual Report on Competition in Mo-bile Phone Services, GAO-03-501 at 44 (April 2003)(“GAO Call Quality Report”).

8. Ellen Simon, “Your Cell Phone CompanyKnows You Hate It,” Associated Press (June 4,2004).

9. Better Business Bureau, Analysis of Cell PhoneComplaints Reveals Root Causes of Customer Dissat-isfaction (May 4, 2004) (“BBB Analysis”).

10. Jon Van, “Only 45 Percent of Wireless Cus-tomers Satisfied with Service,” Chicago Tribune(Jan. 5, 2005).

Notes


11. “Cellular Service: Best Carriers,” ConsumerReports, at 18 (Feb. 2005) (“Cellular Service”).

12. Id. at 19.

13. The average monthly cell phone bill was$49.49 as of June 2004. See, CTIA Survey, supra,note 1.

14. Thirty-two state attorneys general negoti-ated an assurance of voluntary compliance withCingular Wireless, Sprint PCS and Verizon Wire-less regarding these fees as well as other matters.The settlement agreements are available at:www.nasuca.org/AVC%20Documents.htm. Inaddition, the Missouri Attorney General reacheda settlement with Nextel and Sprint PCS regard-ing these fees. See, Press Release, Nixon ObtainsAgreements Requiring Nextel, Sprint to Use ClearerLanguage in Cell Phone Bills, Ads Regarding Fees,Office of the Missouri Attorney General (July 3,2003), available at www.ago.mo.gov/newsreleases/2003/070303.htm.

15. Cellular Telecommunications & Internet As-sociation (CTIA), Consumer Code for Wireless Ser-vice, (“CTIA Code”), available at: http://files.ctia.org/pdf/The_Code.pdf.

16. FCC Complaint Reports, supra note 3, and BBBAnalysis, supra note 9.

17. Id., BBB Analysis, noting that complaints in-volving sales agents made up one-third of thecomplaints filed alleging deception or misrepre-sentation of contract terms. See also, CaliforniaUtility Consumers’ Action Network (UCAN),Phraud and Phonies: The Compelling Need for Tele-communications Consumer Protection, a White Pa-per on Consumer Complaints, (July 2003) (“UCANComplaints Report”), available at: www.ucan.org/law_policy/teledocs/telcoreport.htm.

18. Id., UCAN Complaints Report, supra note 17.

19. Ryan Malkin, 10 Things Your Cell Phone Ser-vice Won’t Tell You, SmartMoney.com (July 2003),available at: http://www.smartmoney.com/con-sumer/index.cfm?story=tenthings-july03.

20. BBB Analysis, supra note 9.

21. In 2002, the FCC received 1282 complaintsin this category. In 2003, that number increasedto 2133. See, FCC Complaint Reports, supra note 3.

22. UCAN Complaints Report, supra note 17.

23. In 2003, the FCC received 10,592 complaintsinvolving billing and rates. See, FCC ComplaintReports, supra note 3.

24. Table One, GAO Call Quality Report, supranote 17, at 26.

25. BBB Analysis, supra note 9.

26. Simon, supra note 8.

27. Service Shortcomings, ConsumerReports.org(Feb. 2002).

28. Jeffrey Silva, “Kennedy Backs Off Alterna-tive Bill of Rights,” RCR Wireless News (Jan. 20,2004).

29. Testimony of Dr. Douglas Elfner, Directorof Utility Intervention, NY State Consumer Pro-tection Board, Overcoming Obstacles to WirelessPhone Service, before the NY Senate Committeeon Energy and Telecommunications at 4 (Dec. 8,2003), available at: www.consumer.state.ny.us/pdf/wireless%20testimony%2012-8-03.pdf.

30. Fedor v. Cingular Wireless Corp., 355 F.3d 1069(7th Cir. 2004).

31. Dan Meyer and Jeffrey Silva, “AT&T Wire-less Faces Class-Action Lawsuit for Roaming Bill-ing,” RCR Wireless News (Sept. 8, 2003).

32. James S. Granelli, “Consumer Group SuesNextel,” Los Angeles Times (Oct. 22, 2003).

33. Cellular Service, supra note 11 at 18.

34. GAO Call Quality Report, supra note 7 at 42.

35. Understanding Consumer Concerns, supra note6.

36. GAO Call Quality Report, supra note 7, at 22.

37. The assurance of voluntary compliance foreach carrier is available at: http://www.nasuca.org/AVC%20Documents.htm.

38. Mike Langberg, “Cell Phone CompaniesShould Level with Public,” Mercury News (Dec.22, 2003), available at: www.siliconvalley.com/mld/siliconvalley/7548274.htm.

39. Robin Washington, “Verizon Hangs up itsPlan to Extend Peak Hours,” Boston Herald (Feb.3, 2001).

40. Brief of Minnesota Attorney General MikeHatch, Cellco Partnership v. Hatch, No. 04-3198,before the Court of Appeals for the Eight Cir-cuit, at 6-8.

41. Press Release, Wireless Customer Care Perfor-mance Drops Significantly from 2003, J.D. Powerand Associates (July 8, 2004), available at:w w w . j d p o w e r . c o m / n e w s / r e l e a s e s /pressrelease.asp?ID=2004061.


43. Brief of Attorney General Hatch, supra note 40at 7.

Notes 45

44. Some carriers’ contracts include arbitrationclauses that would allow either party to pursueindividual claims through the small claims courtprocess.


46. Understanding Consumer Concerns, supra note6, finding that 47 percent of respondents reportedthat keeping their cell phone number whenchanging providers was “very important,” and an-other 20 percent found it “somewhat important.”

47. Press Release, FCC Observes First Anniver-sary of Wireless Local Number Portability, FCC(Nov. 24, 2004), available at: http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-254499A1.doc.


49. Jim Finkle, “Pulling the Plug,” Orange CountyRegister (Nov. 16, 2003).

50. Yuki Noguchi, “The Wireless Industry andthe 411,” The Washington Post (Aug. 7, 2004).

51. Verizon Wireless Customer Agreement,available at: http://www.verizonwireless.com/b2c/footer/customerAgreement.jsp (accessed Jan. 7,2005).

52. Senate Bill 1963 (108th Congress).

53. Cal. Pub. Util. Code § 2891.1

54. In re The Year 2000 Biennial Regulatory Re-view-Amendment of Part 22 of the Commission’sRules to Modify or Eliminate Outdated Rules Affect-ing Cellular Radiotelephone Service and Other Com-mercial Mobile Radio Services, 17 FCC Rcd. 18485,18489 (2002).

55. FCC Complaint Reports, supra note 3.

56. Press Release, Government Records RevealAT&T Wireless Has Four Times as Many ConsumerComplaints as Verizon, Consumers Union (May 11,2004).


58. Yuki Noguchi, “Cellular Merger Approved,”The Washington Post (Oct. 26, 2004).

59. “Taking on Giants,” The Wall Street Journal(Dec. 16, 2004).

60. Specifically, 47 U.S.C. § 332(c)(3)(A) reads:“[N]o state or local government shall have anyauthority to regulate the entry of or the ratescharged by any commercial mobile service or anyprivate mobile service, except that this paragraphshall not prohibit a state from regulating the other

terms and conditions of commercial radio ser-vices.”

61. H.R. Rep. No. 103-111, 103rd Cong., 1stSess. (1993), reprinted in 1993 U.S. Code Cong.& Admin. News, 378 at 588.

62. In re Southwestern Bell Mobile Sys., Inc., 14F.C.C.R. 19898, ¶¶ 23 and 10. (F.C.C. Novem-ber 18, 1999).

63. See, Brown v. Washington/Baltimore Cellular,Inc., 109 F. Supp.2d 421, 423 (D. Md. 2000) andCellular Telecommunications Indus. Ass’n v. F.C.C.,168 F.3d 1332, 1336 (D.C.Cir.1999).

64. See, Esquivel v. Southwestern Bell Mobile Sys.,Inc., 920 F. Supp. 713 (S.D. Tex. 1996); Brown v.Washington/Baltimore Cellular, Inc., 109 F. Supp.2d421 (D. Md. 2000); and Phillips v. AT & T Wire-less, No. 4:04-CV- 40240, 2004 WL 1737385(S.D.Iowa July 29, 2004).

65. La. Rev. Stat. Ann. § 45:844.6; R.I. Gen. Laws§ 39-2-1.3.

66. Cellco Partnership v. Hatch, No. Civ.04-2981,2004 WL 2065807 (D. Minn. 2004)

67. Viewpoint: Cell-phone Users’ Bill of Rights,ConsumerReports.org (Sept. 2004) (“Viewpoint”).

68. Jeffrey Silva, “CPUC to Revisit Bill of RightsRules,” RCR Wireless News (Jan. 10, 2005).

69. Michael Liedtke, “Stiff PUC Wireless RulesPut on Hold,” Associated Press, (Jan. 28, 2005).

70. Alex Pham, “PUC Shelves Phone Rules,” LosAngeles Times, (Jan. 28, 2005).

71. CTIA Code, supra note 15.

72. Viewpoint, supra note 67.

73. Press Release, Escape Cell Hell Campaign, Con-sumers Union (Jan. 6, 2004).