The Wireless Perspective on a National Framework
September 2009

In recent years, hundreds of separate laws and regulations have been proposed in states and cities across the country, creating a confusing tangle of costly wireless overregulation. These actions threaten to frustrate consumers and drive up costs, undermining the benefits of rapid innovation and intense price competition that consumers have come to enjoy. A consistent national framework, uniform across all 50 states and the District of Columbia, is best way to protect consumers’ rights and promote access to innovative and affordable wireless devices and services. Absent strong federal action, the States will continue to create a patchwork of complex and conflicting regulatory and legal schemes that will negatively impact consumers throughout the country.

• State-by-State Regulations Threaten the Wireless Success Story. A patchwork of state-by-state regulations threatens the wireless success story by increasing costs, increasing confusion, and reducing choices for wireless consumers. It eliminates the cost savings consumers would otherwise realize from the efficiencies of national marketing, customer care operations, billing platforms and other back office support to provide and bill for wireless services. It also results in conflicting billing, contract and disclosure rules leading to “information overload,” making it confusing for consumers to identify the information they value. Finally, it decreases consumer choice, because excessive state regulation and its associated costs would deter carriers from offering new and efficient subscription and billing plans.
• Competition Provides Consumer Protection Checks & Balances. Competition is a much better mechanism than state-by-state regulation and the customer is the best regulator of all in a competitive market. More than 90% of the US population has a choice of four or more wireless providers and over the last two decades, the average local monthly wireless bill has fallen 49%, while wireless minutes of use have grown 2,373% in the last decade alone. Recent spectrum auction winners -- from cable companies to smaller wireless providers -- are introducing new wireless services nationwide. In this competitive landscape, carriers are under pressure to offer more choices, better service and lower prices -- and they are delivering. Wireless carriers are competing on customer service-oriented aspects of their business including trial periods, return policies, handset discounts and other customer- focused offerings. When carriers fall short, customers have options. The Federal Communications Commission (FCC) reports that carriers lose between 1.5% and 3.0% of their customer base per month.
• Wireless Consumer Complaints Continue to Decrease. Based on data from the FCC's 1st Quarter 2009 report   on informal consumer inquiries and complaints, the quarterly wireless complaint rate was 16 per million subscribers. This figure excludes the Telephone Consumer Protection Act (TCPA) issues (e.g., telemarketing) which comprised 73% of all the wireless-related complaints that quarter. When compared with the 24 million non-TCPA wireless complaints reported in the 1st Quarter of 2008, the complaint rate decreased more than 33%.
• The Wireless Industry has a Strong Complaint Settlement Rate. The vast majority of consumer complaints filed are resolved by wireless carriers in a manner satisfactory to the consumer. The Better Business Bureau (BBB)   finds that wireless has a 91.8% complaint settlement rate, which ranks first out of the top 20 BBB complaint categories. Citing BBB statistics, state and consumer groups report that wireless is the most complained-about industry, above car dealers, wireline phones, cable TV, home improvement contractors and even collections agencies. However, the BBB divides most industries (other than wireless) into multiple categories. For example, if just four of the separate “car dealer” categories were summed into a single category, complaints in that category would exceed wireless-related complaints and the settlement rate for those complaints would be lower than for wireless.
• A Dual Regulatory Regime will Continue to Protect Consumers. Wireless providers are subject to state laws of general applicability, including consumer protection, anti-fraud, truth-in-advertising, and anti-obscenity measures. Failure to adhere to these laws is actionable by a state’s Attorney General. Additionally, AT&T Mobility, Sprint, and Verizon Wireless entered into the Assurance of Voluntary Compliance (AVC), a legal agreement with 33 states’ Attorneys General to strengthen consumer protections covering advertising and rate disclosures, coverage maps, service quality and trial periods. The industry has also adopted a Consumer Code, which helps consumers make informed choices when selecting wireless service, and helps ensure that they understand their wireless service and rate plans. The wireless industry also continues to work with Congress and state legislatures to adopt a national wireless consumer framework that will benefit all subscribers. In fact, the National Conference of State Legislatures (NCSL) “urges state and federal policymakers to work together to ensure that industry [wireless] targeted consumer protections can be applied within a national framework that ensures the continued ability of the state attorneys general to enforce such consumer protections.”
• A National Framework is Necessary to Preserve Today’s Benefits. Although 31 states (and the District of Columbia) have statutorily pre-empted their public utilities commissions from regulating the “terms and conditions” of wireless service (see map), their legislative bodies retain authority to enact statutes affecting wireless service. If wireless is ruled by 50 different sets of state laws and regulations, not to mention additional local taxes, laws and regulations, consumers will suffer, with less innovation, fewer choices among services and providers, and ultimately higher prices.

States Statutorily Pre-empted from Regulating Wireless