Senator Amy Klobuchar

Working for the People of Minnesota

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Klobuchar's Cell Phone Consumer Empowerment Act Heard Before Senate Commerce Committee

Klobuchar chairs hearing; Minnesota Attorney General testifies about legislation addressing fees and coverage problems plaguing consumers.

October 17, 2007

Washington, D.C. – Senator Amy Klobuchar’s legislation to relieve the problems plaguing the nation’s more than 230 million cell phone subscribers was heard before the United States Senate’s Commerce Committee today.

“The rules governing our wireless industry are a relic of the 1980’s, when cell phones fit in a briefcase instead of a pocket,” said Klobuchar, who chaired today’s hearing.  “While cell phones have modernized, the rules haven’t.  It’s past time for more consumer friendly policies that keep up with the needs of consumer, allowing them to get a phone that works when and where they need it at a price they can afford.”

Klobuchar (D-MN) and co-sponsor Jay Rockefeller (D-WV) unveiled the Cell Phone Consumer Empowerment Act in September, requiring wireless service providers to share simple, clear information with current and potential customers.  Among the bills provisions are detailed data on coverage areas and dropped calls; pro-rated early termination fees for those who exit their contract after thirty days; the ability to exit a contract within thirty days without a termination fee when wireless service is found to be unsatisfactory; and transparency in contracts and billing, including explanations of taxes and fees. 

At the hearing, Klobuchar noted that most cellular companies put disclaimers on their maps, including the one on AT&T’s website noting “actual coverage area may differ substantially from maps,” making it difficult for consumers to make informed decisions on the cellular service that will meet their needs.  Klobuchar also cited a Verizon billboard in Fosston, Minnesota on U.S. Highway 2 where, despite a map that indicates coverage and the presence of the Verizon advertisement, their cellular service does not work in the vicinity of the billboard.

“Multi-million dollar marketing campaigns by the cell phone companies tell us to choose the service with the most bars, the best coverage, or the least dropped calls,” said Klobuchar.  “But when the maps are ‘substantially different’ or calls don’t work where they’re advertised, the cell phone industry is not giving consumers the tools they need to make the best decisions.  This is simple, consumer-friendly legislation to empower cell phone users with information.”

Witnesses at today’s hearing included Verizon CEO Lowell McAdam, Chris Murray from the Consumers Union, and Minnesota Attorney General Lori Swanson.

“The burden should not be on the consumer to figure out the rules of the cell phone shell game.  The United States Congress should pass meaningful legislation so that consumers are treated fairly and not subjected to a game of ‘hide the ball’ when navigating the cell phone maze,” Swanson said.

Today’s hearing was held at the request of Senators Klobuchar and Rockefeller, both of whom sit on the Commerce Committee.

A summary of the legislation is attached.

To access radio actualities from the Senator’s testimony today click here:

THE CELL PHONE CONSUMER EMPOWERMENT ACT OF 2007

Summary

EARLY TERMINATION FEES (ETF)

  •  The FCC shall set forth regulations to pro-rate ETFs.  At a minimum, the ETF for a 2-year contract shall be reduced by ½ after 1 year. 

MAPPING AND SERVICE QUALITY

  • Maps are to be detailed enough to identify whether or not a consumer shall be able to receive wireless service at the consumer’s home.
  • Wireless providers shall provide the FCC with information on dropped calls and coverage gaps; and the FCC shall make this information publicly available. 

DISCLOSURE REQUIREMENTS FOR PLANS AND CONTRACTS

  • Publication of the terms of a wireless plan shall include information on: contract terms; charges; minutes; information on taxes and surcharges; wireless E-911 service; and other information that the FCC considers appropriate. 
  • This information shall be given to a consumer prior to entering into any contract.

CONTRACT BILLING

  • Taxes and fees shall be set forth in a separate section of the bill; and roaming charges shall be separately itemized and sent to a subscriber not later than 60 days after such calls were placed.
  • Carriers will not be able to list charges or fees other than fees for the wireless service and any charge expressly authorized by federal, state, or local regulation.

CONTRACT EXTENSION, MODIFICATION, OR RESCISSION

  • Extension:  An extension of a contract shall not be valid unless the wireless provider provides point-of-sale notice of the extension to the customer and allows the customer to cancel the extension within 30 days after such notice.
  • Modification:  Wireless carriers must provide subscribers with written notices of changes in rates and terms at least 30 days before such changes are to take effect.
  • Rescission:  A contract for wireless service may be canceled upon the request of a subscriber for any reason up to 30 days after entering into the contract.

REPORT ON HANDSET PORTABILITY AND HANDSET QUALITY

  • The FCC shall submit a report to Congress that studies the practice of handset locking in the United States and the effect of handset locking on consumer behavior and competition. 

TERMINATION OF CONTRACTS FOR ARMED SERVICE PERSONNEL

  • U.S. military personnel may terminate their cell phone contracts if, during the term of the contract, the member receives orders for deployment outside of the U.S. for a period of not less than 90 days.

ENFORCEMENT

  • The FCC shall enforce the legislation’s provisions and the attorney general of a State, or the public utility commission of a State may bring a civil action in federal district court or establish or use existing administrative procedures to enforce the Act’s provisions.
  • The Act preempts state law, except that the Act does not preempt state laws that provide additional protections to wireless subscribers. 

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