Thomas Crowe, Esq.
Earlier this month, the Federal Communications Commission (“FCC”) sent a letter to Verizon Wireless (“Verizon”) requesting further information about its recent Early Termination Fee (“ETF”) increase, as well as its billing related to the company’s Mobile Web service. The FCC’s investigation into these practices has the potential to impact both wireless agents/dealers and their customers.
Background
According to news reports, on November 15th Verizon doubled the base ETF charged to customers purchasing so-called “advanced devices” on a one or two-year contract from $175 to $350.
Additionally, reports have spread concerning customers being billed for accidental data transfers using Verizon phones. Particularly noteworthy is the allegation that certain Verizon phones have special hotlinked buttons which automatically trigger a charge for data use if pressed, even accidentally.
Verizon Inquiry
In its letter to Verizon, the FCC asks Verizon a series of questions concerning nine focus points, most of which relate to the ETF increase. The FCC’s inquiries concerning the ETF are fairly broad. They cover topics such as disclosure of the ETF and prorating formulas, the existence of a “trial period” during which customers can cancel without being penalized, the rationale for the recent ETF increase, any correlation between the ETF increase and an increase in Verizon’s costs for “advanced devices”, and whether “advanced devices” are available on non-contract plans. The Commission’s inquiries into Verizon’s Mobile Web concern when and what data levels Verizon charges fees for data downloads, which phones have pre-programmed keys to access Mobile Web, whether those key scan be reprogrammed, and whether it is possible to avoid charges from accidental Mobile Web access.
Overall, the FCC’s inquiries seem to indicate that the Commission is concerned that Verizon is taking advantage of its customers. The tone and scope of the inquiries may indicate that the FCC intends to increase customer-protection actions against wireless carriers in the future, something which could have a significant effect on the wireless industry, including wireless dealers and agents.
Customer Protection at the FCC
The FCC’s own communications indicate that this may in fact be the case. In late August, the Commission released a Notice of Inquiry concerning the information available to consumers in the wireless market. Specifically, the Commission inquired as to information available to consumers when choosing a wireless provider, choosing a service plan, managing the use of a purchased service plan, and deciding whether and when to switch to a different plan or service provider. Both the inquiry and press release characterized the inquiry as seeking “opportunities to protect and empower American consumers by ensuring sufficient access to relevant information about communications services.”
Given these recent developments, wireless dealers and agents should expect further action from the FCC on wireless consumer protection issues.
This article is provided for informational purposes only, and is intended neither to provide nor to substitute for legal advice.
December 15, 2009
| This article was authored by the Law Offices of Thomas K. Crowe, P.C., a Washington D.C.-based specialty law firm serving the communications industry. Specialty services cover agreements with distributors and providers, FCC licenses, USF reporting and disputes, FCC Enforcement Bureau matters, CPNI, CALEA, state licensing, and more. Contact the firm by phone at 202-263-3640, by email at .(JavaScript must be enabled to view this email address), or via the firm’s website, www.tkcrowe.com. |