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Klobuchar: Protect Consumer Rights in Cell Phone Market

Calls for a competitive marketplace to give consumers choices

June 17, 2009

Washington, D.C. – U.S. Senator Amy Klobuchar said today that Congress and the Federal Communications Commission (FCC) must find a way to promote competition and protect consumers in a cell phone industry that has undergone considerable consolidation in the last few years.  At a Senate Commerce Committee hearing on “The Wireless Consumer Experience,” Klobuchar called on the FCC to examine certain practices like exclusive contracts between carriers and handset manufacturers and announced that she would re-introduce legislation to protect wireless consumers against anticompetitive practices.  This week, Klobuchar sent a letter to the FCC urging the agency to take a close look at the competitive impact on consumers from the wireless carriers’ exclusive arrangements with cell phone manufacturers.

“Consumers should be free to choose the plan and phone that best fits their needs,’’ said Klobuchar.  “We need to make sure consumers are getting a fair deal.  Right now, some consumers have severe limitations in wireless options and are subject to confusing and anticompetitive business practices like early termination fees and other charges.”

At the hearing, the General Accounting Office (GAO) presented a preliminary report about consumer satisfaction and problems with wireless phone service and the FCC’s efforts to assist consumers with complaints.  The report showed consumer dissatisfaction with industry practices like early termination fees. 

The hearing also addressed the issue of exclusive deals between device manufacturers and wireless carriers.  Executives from AT&T, Cellular South and U.S. Cellular spoke at the hearing; however, despite being invited to participate, executives from all major handset manufacturers refused to attend the hearing.

Klobuchar questioned the executives about the impact of today’s exclusive deals on future innovation and pricing in the cell phone industry.  Additionally, yesterday, during a hearing by the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, Klobuchar questioned senior executives at the nation’s top cell phone companies about the state of competition in the wireless market. 

Last Congress, Klobuchar, a member of the Senate Commerce Committee, authored the Cell Phone Consumer Empowerment Act with Senator Jay Rockefeller (D-WV) to strengthen consumer protections in the wireless industry and preserve consumer choice and effective competition.


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