I remember in the 90's the "new" digital cellular (PCS) providers like Sprint, PrimeCo, etc. offered no contract at all. It was great. I signed up with Sprint. Service quality was great at first. Then things went downhill. 12 months later I cancelled my service with Sprint and owed them nothing.

True, they didn't offer "free" phones back then. But the "free" phones tend to be the cheap phones or are only partially discounted. I'll gladly pay market price for a phone - just like all of the iPhone users are - if it means no contract.

This bill fails to recognize that contract termination fees are supposed to reimburse the carrier for lost subsidies on discounted or free phones. Therefore a pro-rated termination fee is not good enough. Termination fees should only apply to customers receiving a subsidized phone.

Secondly, the bill only asks the FCC to study the network locking of phones. We don't need to waste time with a study to tell us what Belgium, The Netherlands, and Spain have already figured out ([en.wikipedia.org]). If a customer has paid for a phone it should be their phone. Period.

Thirdly, on the topic of surprise hidden fees disguised as fake taxes, (unless I'm missing out on something) it doesn't seem like the wording of the law would abolish the fake taxes that aren't really government taxes at all - like the Number Portability Recovery Fee. The law should state that all government *mandated* taxes and fees be disclosed in a formatted box (kind of like how credit card companies have a standard disclosure mechanism for annual fees and APRs). Any non-required items (like Recovery Fees) should not be line items at all, but rather swallowed (since they are often times not even backed up by real costs) or packaged into the advertized monthly service fee.

But that being said, to open up the cell phone market to greater innovation, and better phone pricing the bottom line is that customers shouldn't be locked into onerous contracts, and phones that people paid for should be unlocked.

Contact your Rep!

[www.house.gov]

Nah, I figure someone's got to bring some degree of sanity to these fora.

@JustAGuy2:

Wow! Cell phone companies must be paying you good for taking just a beating in the forums (and looking like a jackass :)

I think the pro-rated ETFs are the strongest part of the bill because a LOT can happen in 2 years. I moved from an area that has passable coverage to an area that has lousy (by my standards) coverage. Of course T-Mobile's engineers claim that the coverage is "just good enough that they don't have to release me from the contract".

With only 2 months to go on my contract, there is no way in hell I'm going to pay the full ETF -- a fact I remind them when I call every few days telling them that I do not want my contract extended.

I disagree with the comment that it is possible to find good service without a contract. Only pre-paid plans have no contract, and the rates are terrible, and some of them will not allow you to transfer your number.

This is an anti-business law and it's ok but not when the consumer gets the heat with higher prices for phones.

@jamar0303:

The free phones offered with the prepaid plans are roughly comparable.

With the German postpaid service plan I mentioned, the N95 is E310, or about $425. The cheapest you can get it is E290, or about $395, so nowhere near free.

@jamar0303:

Very interesting, and thanks for the info. That IS cheap. Not at all a waste of space.

PREPAID
US AT&T- 25cents/min or $1/day access fee and then 10cents/min, $.01/KB with package of $10 for 5MB ($5 for 1MB also available, but let's be honest, that's just a ripoff)

Basic phone (b/w screen, no bells or whistles) $20, $10 starting airtime.

China Mobile- (rough conversion) $.03/min or $.80/month and then $.01/min, $.01/3KB with packages of varying sizes ($2.70/month for 50MB, laptop usage included, but there's $13 for 800MB and $27 for 2GB, and the big kahuna of $120/month for unlimited data anywhere in the world, no roaming charges- great for users of unlocked iPhones).
Convoluted? Yes. However, at least the customer service people here in China can explain it all to you and help you pick the plan that suits you, unlike at AT&T (personal experience).

Phone- a unique "1.8 plan" (hope they didn't change it), where you get any phone free after putting 1.8x the price of the phone in prepaid credit into your account.

POSTPAID (both with 2-year contracts)

AT&T- 450 minutes per month, rollover, unlimited M2M, for $40/month (not counting the various fees and surcharges) and unlimited US data for $60/month (hey, compare apples with apples, let's look at the laptop plans since China Mobile covers laptop usage in their cellphone data plans)
Free phone, generally low-spec

China Mobile- $23/month for 450 minutes per month; no free M2M or rollover but you get insanely low international rates- $.03/min to HK/America/Canada/Singapore, $.06 to Taiwan/Macao, $.12/min for Europe/Australia/New Zealand/Thailand/Malaysia, and $.50/min everywhere else. Data runs the same as prepaid (again, go for the big kahuna if you use an iPhone and travel a lot, else you'll wind up like that guy that was featured here before)
Phone subsidy is same as AT&T (although people go the BYOPhone route because you can actually get a contract-free postpaid plan here, unlike in America)

Point? Just as you can find a more expensive example (I know you were specifically responding to the Europe guy; I'm really just being facetious, as shown by my repeated digs at the iPhone), so too can I find a cheaper example. And really, it makes you wonder how much money the US wireless providers make off of people.

Sorry about the waste of space.

@LTS!:

How did you come up with that imagined $20 price hike that you repeat four times in your post?

Is this some kind of Karlrovesque "talking point" that, if repeated enough times, magically becomes true?

As per your other comments urging people to stop using companies they don't like, it's a bit stupid, not to say unrealistic, since for most services we have a very limited choice of companies (think electricity, water, gas, cellphone, telephone, cable TV etc).

@pshah:

Nice total lack of a response there.

Cell companies certainly have their customer service failings, but those failings are when they don't live up to the contracts they sign, rather than when people don't like the contracts and offers.

@JustAGuy2: Saying the same thing over and over again doesn't prove a point. If you are trying to kiss big corporation's @ss you are on the wrong site.

This is different from the proposed bill, which would allow them to cancel the contract. Also, as is apparent from many of the posts here, a lot of people, including cell phone company CS reps, are unaware of this law.

@jeremyduffy:

Why do people have this idea that you can't get a cell phone without a contract? There are at least three no contract providers I can think of off the top of my head. This is sort of like saying "Lexus should be required to sell a car with only cloth seats and no stereo." You want that, go to Kia.

As for coverage maps, if there's a coverage hole at your house, I assume you'd notice it during your 30 day return period, and just bring the phone back.

As for fees, who cares? Look at the final price! I don't care if they charge $2.99/month and $37 in fees or the other way around, my bill is still $40/month.

@JustAGuy2:

STFU. How about the fact that they can't charge custom fees? How about the fact that charging a full early termination fee during the entire term is bogus? Full coverage maps down to the street will tell you if your house is in one of their coverage holes ahead of time (before you sign that stupid contract). Speaking of, they should add this provision: cell phone companies will be required to offer no-frills phones and service plans that require no contract.

Compare prices between US and European cellular carriers. US carriers are comparable, and much cheaper for higher-usage plans. Example:

Prepaid (no contract):

US: Virgin Mobile: no contract, 18c/minute or $7/month and 10c/minute. Phone $20, includes 110 minutes of airtime

UK: Virgin Mobile: no contract, 30c/minute for 1st five minutes/day, 10c/minute thereafter. Phone $40, includes 200 minutes of airtime

Postpaid (both with 2 year contracts):

US: T-Mobile: 600 daytime minutes, unlimited nights and weekends, free long distance, $40/month, about $50 with taxes. Free phone.

Germany: T-Mobile: 400 minutes, no free nights and weekends, free incoming calls, $78/month. Free phone.

Yeah, let's mandate every device be like the 8830, with two different air interfaces. That won't drive up costs or anything. Listen, there's demand for the 8830 from a niche market that's willing to pay a premium to get that capability. Do you want to add at least $50 in cost to every phone on a mandatory basis? Why don't you also mandate navigation systems on every new car? It's a nice feature, and some people may want it, but there's no reason to force people to get it.

I thought only GSM phones can be unlocked.

@Nerys: "How about what is good coverage turning bad when they decide that tower in your area is no longer worth maintaining profit wise?"

Cell towers cost so much to put up that the carrier would have to be hemorrhaging money on cell site to make taking it down the best financial option. That can happen if the carrier didn't do all the regulatory stuff they are supposed to do before putting up a tower and are being fined by the government but it's not common.

@Cowboys_fan: Sprint did this for me before I went to Afghanistan. They didn't ask for my orders, and didn't turn it back on automatically. So, any military members could use this loophole to avoid the early termination fee - there's no monthly charge and the contract stays active.

Let me explain the errors of your ways.

-------------
Don't like an ETF? Don't sign a contract with one.
-------------

Easier said than done. There is no such thing as a contract without one. in fact the ONLY provider I am aware of where it is even possible to get an account without a contract is SPRINT and that means buying a phone for a minimum of $180 (craptacular phone) and paying a SURCHARGE of $10 per month over the going plan rate.

-------------------
Don't want a locked phone? Buy an unlocked one, and forego the subsidy the carrier is providing you.
-------------------

Even MORE expensive and irrelevant on some providers (Sprint and Verizon will ONLY permit usage of sprint and verizon phones there is no such thing as "unlocked" with these carriers.

---------------
Don't like the fees you're being charged? Why didn't you get them in writing upfront?
---------------

Because the fees are presented as government issued and are NON optional. Seeing them is irrelevant they are not negotiable.

You have to remember these are NOT contracts. They are TERMS. A contract is a negotiated mutual agreement between equals. Nothing of the sort exists here. You are presented with non negotiable non mutual "terms" its there way or NO way. and there is no alternative to this except abstinance.

THIS is why government is even needed. to protect the powerless individual against "the power" of a larger entity against unfair conditions or terms.

------------------
Don't like the coverage in your area? Return the phone, you get 30 days.
------------------

How about what is good coverage turning bad when they decide that tower in your area is no longer worth maintaining profit wise? yet they will still impose that termination fee.

------------------
Honestly, it shocks me that Congress is wasting their time meddling in a tremendously competitive market that 99.9999% of the time works extremely well. It's not our government's job to protect people who can't be bothered to actually read what they're signing.
------------------

Whats the point of reading it when you have no say choice or voice in what the terms are. THIS IS NOT A CONTRACT. this is a set of ultimate terms presented to you. Sign it or you get nothing.

Normally your choice is simply patronize someone else but they ALL present this same set of "terms" with no negotiation possible.

They also "trick" people. Just because someone os gullible enough or even dumb enough to be fooled by these tricks (assuming abstinance was ever an option to begin with) that does NOT negate the unjust methods used to create these unfair terms.

----------
The likely result, if this passes, is higher costs for phones (since the subsidy won't be as sure to be paid off) and a government coverage map website, set up at great cost (passed on to customers), which nobody ever reads.
-----------

Your right it will result in higher cost but it will be a FAIR higher cost. When the sign says $40 a month you can rest assured it will be $40 a freaking month and not $52 after all the fees taxes surcharges etc.. get slapped into place.

So if I pay $30 plus $11 in crap now or $41 straight up later whats the difference? the difference is its FAIR and companies will have to actually compete PRICE to PRICE and not how much can we milk from these hidden fees.

Then at least you will know what a DISCOUNT MEANS. since it will be ONE PRICE.

Then a company can not say SEE we lowered our price $5 (while adding $5 in fees without telling you this clearly)

I should not have to be a lawyer or even ultra diligent to know whether I am being had or not.

Does not matter if I "could" be (and I am) I should not have to be.

Is it not cute that your taxes are "split up" into medicair - ssn - wages etc.. You do know there is no seperate taxes right ? yo do know there is only ONE federal tax. The split is semantic on your tax forms. YET your "deductions" only come off the ONE semantic split even though legally its ALL THE SAME TAX.

Cute ehh? by shifting more and more or your taxes to these "other splits" you get less and less deductions from your "real tax" since the deductions do not count on these "splits"

Well corporations figured out they could do the SAME THING with these assorted "fees" that are PRESENTED as if they are legitimate government fees when they are in fact just a "corporate tax" imposed on you by your provider so they can appear to offer lower cost surface and make up for it in the fees

Does not matter if its clear to the buyer it only matters that its WRONG and that the buyer HAS NO SAY and no POWER at all to IMPOSE a say.

The only problem I have with Amy is that she Supports the V-Chip & Internet filters. She also voted in favor of the "Protect America" Bill - something that I personally found to be truly wrong.

Got no issues with this one though. I have a prepaid cell phone that I only use for emergencies. Otherwise I use my VOIP phone every now and then. (Not much of a talker I guess..)

I would rather see more consumer-centric laws than the usual ones that seem to protect the interest of business only. More protection for consumers = good.

"The fact is the only method that will get a company to change would be to stop using their service"

Were that so, we'd still have child labor, factories dumping waste into rivers, widespread, massive insider trading, etc.

Of COURSE gov't regulation affects business. Else why would they fight it so?

This one statement negates everything your side has to say in the matter. But the telecoms owe you $2 for shilling for them. Nice!!

I don't like the current business practices of cell phone companies anymore than the next guy. And I am a huge hypocrit because my #1 motto is don't use the services of a company whose policies you disagree with. Yet, I have cell service, and I deal with it every month as well.

I like the bill, I really do. However, the realist in me says that such a bill will do little to make the cell phone service better within the United States.

The fact is the only method that will get a company to change would be to stop using their service and quite frankly, that's not going to happen because enough people simply don't care about the fees, the contracts, the locked phones, etc. In fact, most people don't even understand what a locked phone is. They want cell service to work, and for them it does. They have placed their priorities in life elsewhere and therefore as long as it's not a nuisance in their life they simply won't care, and if they don't care, then nothing will change.

Along those same lines, what cell phone company does ANYONE recommend? They all have locked phones, they all have subsidies, they all have BS fees, and they all have contracts... if they didn't we would have all switched by now. Perhaps it takes one company with enough of a market presence to open things up and the others would follow, but I don't see it happening.

We should demand an end to ETFs, period. They might have been necessary in the beginning, when cell companies were building-out and rapidly expanding their infrastructure, but they are unnecessary burdens on consumer choice at this point.

It seems to me (and I may be wrong here) that we pay more for cell service than almost anywhere else in the world. I seem to remember that they don't allow contracts or ETFs in Europe. Why don't consumers here have that kind of freedom?

As a consumer, I'm tired of subsidizing three wireless companies, each of which offers the same anti-consumer contracts, penalties, and fees.

Finally, why should we pay them _anything_ when our data service is the slowest in the world? Our data services lag behind Europe, and far behind Asia. And what about coverage areas? It's been years now, and there are still many times when I get dropped calls, and it's not because of radio interference or because I'm in an elevator. If these companies were mandated by law to provide a 10% improvements in cell coverage every year, every consumer in the U.S. would benefit.

Wake up. This bill doesn't offer consumers even half of what they are entitled to in other countries.

Consumers are responsible for two-thirds of the GDP of the U.S. We should start acting like it and demand better treatment.

This just might pass. Senator Rockefeller has a lot of pull, just count the number of buildings, roads, bridges, pork rinds, etc that have his name on them in WV.

While I agree, in principle, that the Government should stay out of our life for the most part and let business forces compete, where I live I can only use one of two carriers, Alltel & Verizon. I really do not have a choice except for the color of a phone. The pricing is the same, etc. I ended up with Verizon because they where the first to waive the activation fee and give me a car charger when I let both companies know I was shopping for a plan. The price of the plan was identical to Alltel.

Just My Opinion.

@FLConsumer: Don't you feel you statement "but Americans aren't educated enough..." is way off. Heck, even my 75 year old grandmother knows that there are problems with the wireless, wired, cable, etc providers.

Umm, I know CDMA wont work with GSM. I was speaking in general.

I had two phones purchased from USCellular. One I explicitly asked to purchase out right and with a month to month contract so I could cancel early if/when I needed to upgrade to 3G. The other phone I purchased for my wife and on a 2 yr contract.

9 months later I upgraded to a 3G through my employer and went to shut off the phone I spent $180 on - I would need to pay an ETF of $150 because I signed the contract for a phone number I was told I needed to sign - but I could still cancel without a fee later.

I went through manager after manager, even called the customer disservice line - only to be put on hold, hung up, transfered to dead air, never had my calls recorded in their system... and so on.

Then one month I didn't receive a bill and BOTH phones were terminated. My last bill from the month before actually had a $4 credit. Great... so they screwed up and axed both phones. Fine, my wife really hated them after all this anyway.

Three months later... (still no bills in the mail) I get a call from a debt collector looking for $300 I stiffed USCC for.

And so it begins... USCC charges me an ETF on service they canceled without warning. Thanks, you'll make a nice blog post.

Somehow I think that getting the congress involved in regulating cell phones is not a good idea.

The companies will lease a phone to consumers, then. "Free" phone but the monthly bill is a few dollars extra. ($10 or $15 maybe)

Or for people like me who don't mind paying a few hundred dollars for a solid feature-rich phone, no problem.

I've Dugg the article and written to my local representatives here in PA. At the very least, it deserves to have serious consideration by both us as a community, and on Capitol Hill.

Also, the majority of Americans are going to through a fit when the "free" phone now cost them $200 because it's unlocked. I really feel American's are more concerned with bottom line value then service or carrier portability. The TelCos have built a paradigm that I really don't see changing for a long time.

@MIKECOLIONE :

And consumers should pay more attention to the fine print in their mortgage papers, calculate how much their payment would go up if rate increases, etc, etc... if the consumers can be taken advantage of while making the single biggest purchase of their lives you think people would actually read pages of a phone contract, maybe you would blame the credit card user if they don't read those periodic 'changes to the terms and conditions' mail if the credit card company decides to sell consumers information to spammers.

I am all for being an informed consumer but onus of fair and anti fraud practice does lie on the companies foremost.

Omg.

If there were more carriers out there and there were fewer barriers to entry, I'd be with you 100 percent.

But there aren't and I'm not.

ANYWAY, well, try to compare the US with EU/UK, and then tell me if it's worth the time for MORE ENFORCED flexibility. The moral of those companies (in the US) is atrocious.

@wwwhitney:
AKA Don't carry a cell phone...

Consumers can already buy unlocked phones, unbranded by their carrier right from the manufacturer, or from any number of websites. Do that, and you eliminate the contract.

As for the rest of it, people should actually read what they are signing. They could put a clause in there that they get your first born if you are late on your bill and people wouldn't even realize it. I work in the wireless industry and out of 50 people, I'd say only 1 person actually even glance at the terms and conditions, then complain when it comes back to bite them.

no it's more about forcing companies that use the law as it is to cheat and decieve customers while artificially inflating a market.

don't give the tired ol "well then don't sign it if you don't like the terms" bit, because THEY ALL PLAY THE SAME GAME.

the pre-paid or no-contract phones are a scam unto themselves. pay an inflated rate for not signing the draconian rate and miss out on the subsidy for the phones, even though they're making a LARGER PROFIT off the phone and useage...

Lets just force any company to do anything we want... Just because we said so... They won't increase the cost of the phone because of new regulations. No, they'll just absorb the costs and do whatever the law says, right?

Lets just make a law saying they have to give it to us for free too! YEAH DUDE!!!

I'm actually in the market for a smartphone/pda combo right now, and SunCom doesn't have any I like. (on the website at least, haven't checked my local brick and mortar) I just called and was smugly told that I would have to pay a $200 ETF even though I've been a customer for some 4 or 5 years now.

That makes me want to suggest SunCom to acquaintances looking for a mobile, sure it does.

@thepounder: That is really surprising to me. These people protect our lives, the least a company can do is allow them out of a contract in order to defend them/us.

@justaguy2 :

"To make cellphones "usable on any carrier," you'd need more than unlocking, you'd need some major changes in, oh, physics."

Umm... or they could just make new cell phone compatible with both techs like Blackberry 8830 ([na.blackberry.com])

Your arguments against fair pricing practices lead me to believe that you might be one of the lobbyist along with your friend LTS! :) Its like says lets not stop [insert any company here] from adding arbitrary fees on top of the advertised price of their product else they will increase the base price !! And if the result of this bill passing would be an increase in monthly rates let free market and supply/demand take its course... I am sure some of the cell phone users might "get by" without them.

I'm shocked (shocked!!) that the sponsoring Senators doing this aren't Republican. Did I mention shocked. Oh yeah, they're not. Because they're whores. Watch them fight it saying if consumers win, so do the terrorists. Or a Strong America loses when consumers win. Whores. Did I say, whores!

That worked out real well.

I should be able to buy a phone from any E/RE-tailer, activate it with the carrier of my choice, and have access to all the features.

This would eliminate the waste of perfectly useful phones being tossed after 2 years cause the carriers want to lock you into a new contract.

Selling phones in the open marketplace would quickly drive down the prices due to real competition, and would increase competition among the carriers. (And churn rate for the lower-quality carriers)

We still need the other protections in the bill to reduce abuse by the wireless industry, of course.

@allstarecho:

To make cellphones "usable on any carrier," you'd need more than unlocking, you'd need some major changes in, oh, physics.

Even if Verizon made it mission #1 to get my RAZR to work on T-Mobile or AT&T's network, it never will - they're technically entirely different, and a CDMA phone will never work on a GSM network, and vice versa.

Ummm, still not good enough! We don't want a damn report, we want unlocked phones! Just put that in the bill: require cell phones to be unlocked and usable on any carrier! Then the bill would be golden.

All this and I live near a town that really wouldn't exist without its Army base.

sounds too good to be true. i'll belive it when i see it. cell phone companies are notorious for charging you fees that their inadequately trained staff over in india can't even clear up for you.

Here's what is NOT in the bill.

Your rates now go up by $20/month and phone subsidies are reduced to cover the changes required.

Okay, now.. what's better.. paying an additional $20/month or dealing with the other stupidity?

I'm probably being conservative with the $20.

This is a political move to garner favor with constituents, it's toothless. Cell companies will fight it to be sure because they would have to rework their business plans in the face of something like this passing, but I can guarantee that the CEO of VerizonWireless is laughing. Sure, I can prorate an ETF, because my consumer paid more for the phone up front, and I'm milking an additional $20 out of them per month.

Whatever.

The ETF should be the ammount of the "discount" off retail pricing for your handset of choice and then divided by length of term chosen.

So you can choose say a 5 year plan if you wanted and get a bigger discount, then having that subsidy divided by 60 months.

Where as someone who chooses a shorter term, say 6 months to a year would have that ammount divided by the 6-12 month length of term.

This would equate to an actual cost to the carrier of "loss", even though we know the subsidy is a fraction of the profit they make off most consumers.

If the Cell companies where smart they'd jump on this, back it up, and then advertise "customized calling plans". I see the first telco on board with this profiting greatly.

... the penalty for escaping a 2-year contract cut in half at the end of the first year.

Honorable Senators, is it too much to ask to have the penalty prorated on a monthly basis, rather than annually?

A carrier will currently receive the same amount of money as liquidated damages whether I cancel at month 1 or month 23. However, the actual loss they suffer (that is, portions of the equipment subsidy they have yet to recover from the monthly bill) is a whole lot different.

It looks like Verizon's started down this path, where it starts at $175 and drops by $5 for each subsequent month of service. But, $5/month means it's not prorated on a straight-line basis, and at 23 months you're still stuck with a $60 ETF, when I'm sure they aren't actually still $60 in the hole that point.

Lobbyists will try to strike it down, the people vs. industry, who will win?

Rather than pay the contract termination fee I just payed for the last couple months of service which I couldn't use.

I really fail to see the issue here. None of this is stuff (with the exception of the contract changes) that is worth Congress's time.

Don't like an ETF? Don't sign a contract with one.

Don't want a locked phone? Buy an unlocked one, and forego the subsidy the carrier is providing you.

Don't like the fees you're being charged? Why didn't you get them in writing upfront?

Don't like the coverage in your area? Return the phone, you get 30 days.

Honestly, it shocks me that Congress is wasting their time meddling in a tremendously competitive market that 99.9999% of the time works extremely well. It's not our government's job to protect people who can't be bothered to actually read what they're signing.

The likely result, if this passes, is higher costs for phones (since the subsidy won't be as sure to be paid off) and a government coverage map website, set up at great cost (passed on to customers), which nobody ever reads.

Guess which two Senators will soon receive major campaign contributions from the cellphone companies? Right after this bill dies, that is.

The current state of affairs makes them so much money they love us. They really do.

However, I'm hoping against all hopes this really does take effect as it is. But we all know those scummy lobbyists are going to have a lot of work on their hands and they have likely already started working against this.

*crosses fingers*

Still, it could pass; they could play up the Military Exemption in order to ward off any would-be opponents. You could any Congressman against the bill on the spot and ask them "Why do you hate the troops?"

I mean, we already know that the cell phone companies hate America.

Doesn't the military already get exemptions under deployment? If they don't, they should. I know T-mobile does this and I've never heard comapnies doing otherwise.

All for it! Cell companies make $$$ hand over fist off of us consumers!