George Slover, senior policy counsel for Consumers Union, in his testimony highlights the fact that consumer choice is on the losing end of the Copyright Office’s decision to ban unlocking, while benefiting carriers and device manufacturers.

“Any way you look at it, this reversal on unlocking is a bad deal for consumers but a boon for providers, who lock consumers in to long-term bundled contracts, and manufacturers who see an artificially inflated demand for new devices through the forced retirement of perfectly good used phones,” said George Slover. “If consumers could shop for the best deal on each of these purchases separately, they would get lower prices, improved quality, and greater innovation and variety.”

The legal protection for unlocking had earlier been granted as a clarifying exception to the Digital Millennium Copyright Act as implemented by the Copyright Office, but the Copyright Office removed the exception last October, effective in January.

Consumers have continuously expressed their desire to be able to take their devices to a new service provider. The testimony points to a 2011 Consumer Reports survey that found that of consumers with long-term wireless service contracts, 96 percent said they should be able to keep their existing handsets when changing carriers.  For those with smart phones, the number was even higher – 98 percent.

The consumer group urged lawmakers to find a solution to the issue, while noting several pieces of legislation currently pending in Congress. Consumers Union also encouraged House members to incorporate clarifications to ensure that the exemption provides full protection in today’s world.

Slover said, “In one fell swoop, unlocking your cell phone went from consumer right to felony. But this has nothing to do with copyright infringement in any traditional sense. We urge lawmakers to take the steps necessary to reverse this decision now, and ensure that mobile phones can’t be put on lockdown again in the future.”

The hearing before the House Subcommittee on Courts, Intellectual Property, and the Internet is scheduled to begin today at 10 AM. For more information, visitwww.judiciary.house.gov.

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WASHINGTON, DC – Consumers Union, the policy arm of Consumer Reports, announced its support of Senator John McCain’s Television Consumer Freedom Act of 2013. The endorsement comes as Senator McCain is testifying today about his legislation that would allow consumers to purchase cable channels individually at a Senate Commerce hearing on “The State of Video”.

Delara Derakhshani, policy counsel for Consumers Union, said, “The average cable TV bill for expanded basic service has gone up 6.1 percent a year, every year, from 1995 through 2011. These days, cable customers have to buy larger and larger packages of channels just to get the handful of channels they want. You shouldn’t have to pay for dozens of channels you don’t watch. We have long argued that ‘cable a la carte’ would be a big boost for consumer choice. We support Senator McCain’s bill because it would create incentives for cable companies to offer consumers more choice over what they pay to watch.”

The Commerce Committee hearing is currently underway. For more information, visit www.commerce.senate.gov.

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FCC reports all participating cellphone companies have fulfilled “bill shock” agreement

Consumers Union says report is good news for consumers after years of complaints about surprise charges on wireless bills

WASHINGTON – The Federal Communications Commission (FCC) today formally announced that cellphone companies have fulfilled their agreement to start providing free alerts to customers before they go over their plan’s usage limits.

Consumers Union, the policy and advocacy division of Consumer Reports, said the announcement is welcome news for millions of wireless customers who have experienced cellphone “bill shock.”  For years, the nonprofit organization has pushed for better tools to help consumers keep track of their cellphone usage, so that they can avoid the shock of huge, surprise charges on their bills for going over their plan limits.

A national survey by Consumers Union in 2011 found that 1 in 5 respondents had received an unexpected charge on a wireless bill during the past 12 months.

In October 2011 the FCC and wireless carriers announced a voluntary agreement, under which companies promised to send free alerts to customers clearly informing them that they are approaching their limits on data, calls, and texts, as well as international roaming charges.

Yesterday – April 17th – was the deadline for participating companies to provide all four types of alerts.  The participating companies represent more than 97 percent of the wireless customers in the U.S., and include the nation’s four largest carriers: Verizon, AT&T, Sprint, and T-Mobile.  At this morning’s FCC meeting, Chairman Julius Genachowski said all participating carriers were in full compliance with the agreement.

Delara Derakhshani, policy counsel for Consumers Union, said, “We’re pleased that companies are reporting that they’re living up to this agreement, and we’re going to keep monitoring how they are performing and asking consumers what they think as well. For years, we heard horror stories from people hit with hundreds, even thousands, of dollars in surprise charges on a single bill.  Today we’re glad that more people are getting better tools to avoid bill shock. We will remain vigilant in ensuring this agreement works as promised for all consumers and that those who could be most vulnerable to bill shock and cramming, such as consumers in lower income communities and communities of color, are benefiting from the alerts.”

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Contact: Kara Kelber, 202-462-6262

WASHINGTON, DC – Consumers Union, the policy arm of Consumer Reports, added its support to the call to restore the legal protection that had permitted consumers to unlock their mobile devices for use on other wireless communications networks. In letters to the FCC and leaders of the House and Senate Commerce and Judiciary Committees, the consumer group urged regulators and lawmakers to take action, whether through legislation or through Commission rulemaking.

“Your announcement, in conjunction with the White House’s announced support for restoring this protection, and bipartisan calls in Congress to restore it, presents an important opportunity to empower consumers with greater choice in how they obtain mobile devices and wireless service,” the group writes.

The letters also call more broadly for policies to promote increased competition and greater consumer-friendly purchasing options. While consumers should have the ability to unlock their phone as they wish, the group notes that carriers requiring consumers to purchase a new mobile device as part of purchasing service on its wireless network can be just as stifling to competition and consumer choice.

The group writes, “In our view, tying these two purchases together provides no benefit to consumers.  Instead, it steers consumers into long-term service contracts that then make it difficult to switch service providers…If consumers were able to shop for the best deal on each of these purchases separately, they would benefit significantly from the lower prices, improved quality, and greater innovation and variety that healthy competition would encourage among both mobile device manufacturers and wireless service providers.”

The legal protection for unlocking had earlier been granted as a clarifying exception to the Digital Millennium Copyright Act as implemented by the Copyright Office, but the Copyright Office removed the exception last October, effective in January.

For full copies of the letters, contact David Butler or Kara Kelber at Consumers Union.

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Your Mobile Privacy:  Even a Dumb Phone Shares Location Data

Whether you know it or not, whether you consent or not, whether you like it or not, your location data can be constantly tracked by your cell carrier – even IF your phone is a block or ‘dumb’ phone.

As Pro Publica reporter Megha Rajagopalan points out, cell phone companies collect location data from cell towers — which all cell phones use. Industry experts told Rajagopalan that location data from cell towers can be almost as precise as GPS.  As users move, their mobile phones register at each tower they pass, allowing phone companies to identify in real time where users are and to look back and see where they have been.

Why are we telling you this now? We recently asked for – and you generously shared – your mobile privacy stories. Many said they eschew smart phones because they are concerned about mobile privacy. Not having a smart phone is not enough to protect your privacy. As Pro Publica’s Rajagopalan advises, “[T]he only way to be 100% sure you’re not being tracked is to throw that phone out or take out the battery.”

We are continuing to monitor this issue, and would like to hear your experiences. Has your mobile privacy been compromised? We’d like to hear about it. Share your story!

If this proposed Senate bill passes, it would create a regulatory bottleneck that could dramatically slow any and all rules coming out of the affected agencies, regardless of merit. We’re already waiting for dozens of rules to implement banking reforms that Americans desperately wanted and Congress approved. With this proposal, these waits could be endless.

The Independent Agency Regulatory Analysis Act would require agencies to complete detailed economic analyses before putting forward regulations. These independent agencies – which already have to carefully consider the economic implications of their actions – would then come under the scrutiny the Office of Information and Regulatory Affairs. With a staff of fewer than 50, this small office is already challenged to meet review deadlines for the agencies already under its purview. To extend its authority would simply lead to additional long delays for crucial consumer protection rules.

The proposal covers key agencies created to protect us from unscrupulous practices and unfair competition: The Federal Communications Commission encourages broadband adoption and oversees media competition; the Consumer Financial Protection Bureau protects us from predatory and deceptive lending practices; the Consumer Product Safety Commission monitors some 15,000 products, including toys, cribs, and strollers; and the Federal Trade Commission takes action when business practices are anti-competitive or deceptive.

It’s important that our watchdogs be fast-acting to respond to the latest schemes, tricks and unsafe products in the marketplace. This bill, which could get a hearing before the end of the year, would make government less responsive, not more. Common-sense rules that level the playing field for consumers without slowing economic growth shouldn’t be held up in another layer of bureaucracy. We simply can’t afford the wait.

Bill shock: FCC reports progress, Consumers Union says alerts help wireless customers avoid costly surprises

Consumers Union 2011 survey found 1 in 5 hit by unexpected charges on wireless bills in past year

WASHINGTON – Consumers Union, the policy and advocacy division of Consumer Reports, said today’s status report by the Federal Communications Commission (FCC) on the effort to prevent wireless “bill shock” is good news for consumers.

The FCC reported that wireless carriers have fulfilled their initial commitment to start providing free alerts to customers before and after they exceed their usage limits.

A national survey by Consumers Union in 2011 found that 1 in 5 respondents had received an unexpected charge on a wireless bill during the past year, with 38% reporting being hit with a charge of $30 or more.

Ellen Bloom, Director of Federal Policy for Consumers Union, said, “If you’ve ever struggled to make sense of your wireless bill and keep track of your limits, these alerts can offer some real relief.  Wireless customers have been getting hit left and right with unexpected charges. These free notifications help consumers keep tabs on plan limits so that they can avoid costly surprises in their bills. We’re glad to hear that companies are living up to this agreement, and we’re going to keep monitoring them to make sure consumers get the alerts they need.”

Today marks the one-year deadline for an agreement announced by the FCC and the wireless trade group CTIA last year.  Wireless carriers – including Verizon, AT&T, Sprint, and T-Mobile — agreed to notify customers as they approached their limits on data, voice, or text, as well as international roaming charges.  Companies agreed to provide at least two types of alerts by today’s date, and all four types of alerts by April 17.  At the time of the announcement, the participating companies were said to represent more than 97 percent of wireless customers in the U.S.

The FCC today said all participating companies had met or beaten today’s deadline, and they were on track for full compliance by April.  The FCC reaffirmed today that, if companies fall short in upholding this voluntary agreement, it would consider imposing regulations to require these notifications.

Contact: David Butler, dbutler@consumer.org, or Kara Kelber, kkelber@consumer.org, 202-462-6262.

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October 17 is the one-year deadline for the agreement announced last year by the CTIA and Federal Communications Commission (FCC). Cellphone providers, such as Verizon, AT&T, Sprint, and T-Mobile, agreed to provide at least two of four types of alerts — data limits, voice limits, text limits, and international roaming charges – by October 17. The companies agreed to provide all four alerts by April 17. At the time of last year’s announcement, participating carriers were said to represent more than 97 percent of wireless customers in the U.S.

Consumer groups had pressed for reforms to help consumers avoid unexpected charges on their wireless bills – a problem known as “bill shock.” The FCC has a web portal that tracks the progress in providing the alerts by the participating carriers, according to the most recent information provided by CTIA. Consumer Reports Online has a web page that provides links and information about the FCC portal and tips on how to avoid “bill shock.”

In a letter to CTIA President Steve Largent, Ellen Bloom, Consumers Union’s Senior Director of Federal Policy, asked for an update on whether carriers would be in compliance with the agreement and make the information available to the public next week.

See below for the full text of the letter. For more information, contact David Butleror Kara Kelber at 202-462-6262.

October 10, 2012

Mr. Steve Largent
President & CEO
CTIA – The Wireless Association
1400 16th Street, NW
Suite 600
Washington, DC 20036

Dear. Mr. Largent:

October 17 marks the one-year deadline for the commitment made by wireless providers to send free alerts to help consumers avoid unexpected overage charges – a common problem known as “bill shock.”

As you know, under the plan announced last year by CTIA and the Federal Communications Commission (FCC), participating companies agreed to start providing free alerts to wireless customers before and after they reach their monthly limits on data, voice, and texts. The plan – known as the “Wireless Consumer Usage Notification Guidelines” — also includes alerts to notify customers of international roaming charges when they are traveling abroad.

By October 17, participating carriers should be providing customers with at least two of the four notifications for data, voice, text and international roaming (and consumers should be receiving all four types of alerts by April 17). At the time of the announcement, participating companies were said to represent more than 97 percent of wireless customers in the U.S.

The FCC has a portal on its web site that tracks the progress in providing the alerts by the participating carriers, according to the most recent information provided by CTIA. Consumer Reports Online has its own web page that provides links and information about the FCC portal and tips on how to avoid “bill shock.”

As the policy and advocacy division of Consumer Reports, Consumers Union has been pressing for reforms to curb “bill shock” for several years, and we were pleased to participate in the announcement of this plan last year. We believe that the free alerts that your members agreed to provide could make a significant difference in addressing this problem.

Our organization will be reporting on the status of compliance on October 17. As the deadline approaches, we urge your members to fulfill their commitments to consumers. Can you tell us whether you expect CTIA’s members to comply with this agreement and make the information available to the public next week?

Sincerely,

Ellen Bloom
Senior Director, Federal Policy and Washington Office
Consumers Union

Consumers Union, the policy and advocacy division of Consumer Reports, agreed that the conditions proposed by the Commission were needed and praised the ability of the public to file complaints. However, the group also questioned how the consolidation of spectrum by the wireless leader, combined with the nontraditional marketing agreements with cable giants, would help better competition across the wireless, broadband and video markets for consumers.

“The FCC was wise to put further conditions on this deal. It’s especially promising that consumers will have to ability to help ensure that Verizon and the cable companies are towing the line,” said Parul P. Desai, policy counsel for Consumers Union. “While some of our concerns with this transaction remain, what is really troubling in light of this deal is the continued trend of decreasing competition in the telecommunications marketplace and the rise of wireless duopolies and regional cable monopolies. Consumers already face limited options when choosing a broadband and wireless provider – oftentimes down to one provider in a market. It is time that we start finding ways to bring competition back to the market, rather than limiting the consequences of less competition.”

Verizon is seeking to purchase spectrum licenses from SpectrumCo, a joint venture among Comcast, Time Warner, and Bright House, as well as licenses from Cox. Verizon Wireless and the Cable Companies will also enter into joint marketing agreements that would allow each individual cable company and Verizon Wireless to sell one another’s products in certain areas. In its approval last week, the Department of Justice addressed concerns with the deal by limiting the scope and duration of the proposed joint marketing agreements.

The agency’s approval, in a 5-0 vote, was the final regulatory hurdle for the pending transaction.

Consumers Union, the policy and advocacy division of Consumer Reports, noted that the DOJ’s conditions improved today’s deal but expressed concerns about continued concentration across the wireless, video and broadband markets.

“The Department of Justice’s conditions will help to make these joint marketing agreements work better for consumers. But moving forward, it is critical that enforcement of these conditions is vigilant,” said Parul P. Desai, policy counsel for Consumers Union. “Today’s deal between two giant industries is still troubling. At best it protects the status quo for consumers. It is hard to see how this improves competition or increases consumer choice in a market landscape already dominated by wireless duopolies and cable/internet monopolies.”

Verizon is seeking to purchase spectrum licenses from SpectrumCo, a joint venture among Comcast, Time Warner, and Bright House, as well as licenses from Cox. Verizon Wireless and the Cable Companies will also enter into joint marketing agreements whose scope and duration were limited by the conditions announced by the Justice Department. The joint marketing agreements would allow each individual cable company and Verizon Wireless to sell one another’s products in certain areas.

Consumers Union previously filed a letter with the FCC saying the deal would add to Verizon’s domination in the wireless market and represent the loss of these cable companies as facilities-based or wholesale wireless competitors. At the same time, the transaction would provide Verizon a disincentive from competing in the landline high-speed broadband and video market and strengthen cable’s monopoly status in the high-speed broadband market.

Desai continued, “At a time when competition in the wireless and broadband markets seems to be contracting, we feel it is critical that policy makers and regulators alike begin to think about how to infuse more competition and consumer protections in to the market.”