Consumers to Telecom Industry: Tell Us the Truth

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Senior Director of Federal Policy and the Washington Office

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We empower consumers through education and action about communication and media issues involving telephone, cable, Internet and wireless services and equipment.

October 14, 2009
For Immediate Release

WASHINGTON — Six public interest organizations including Consumers Union have filed comments with the Federal Communications Commission encouraging the agency to protect consumers from misleading, confusing and harmful advertising and billing practices by phone, cable and wireless providers.

The comments highlight some of the most egregious examples of these practices. Service providers often go to great lengths to create deceptive ads and to impose introductory rates, hidden monthly fees and surcharges that conceal true service quality and cost. Such practices harm consumer choice and limit the effectiveness of competition. The consumer groups argue that current protections are insufficient and urge the FCC to require meaningful, not misleading, disclosure.

The organizations signing the comments are Free Press, Consumers Union, Media Access Project, Public Knowledge, Consumer Federation of America, and New America Foundation.

Read the comments here: www.freepress.net/files/Truth_In_Billing.pdf

“When consumers have the facts, they can make informed choices,” said Chris Riley, policy counsel of Free Press. “Consumers are being bombarded with inconsistent and incomplete information when shopping for service providers or plans, and then they are baffled by misleading and confusing bills once they sign up. Customers invest a lot of money in these services and spend a great deal of time using them. That’s why the FCC must ensure truth in billing and must establish clear disclosure rules so that consumers do not fall victim to the dubious and misleading practices of their phone or Internet access providers.”

“The Commission can and should adopt stronger consumer protections for a broad range of services typically ‘bundled’ together by providers, including voice, video, and broadband Internet access offerings on both wireline and wireless platforms,” said Matt Wood, associate director of Media Access Project. “Competition between providers depends on the free flow of truthful information to potential and existing customers. The Commission has ample jurisdiction and justification to adopt rules requiring the disclosure of the actual costs and limitations of service plans.”

“Today, a consumer needs an accounting degree to navigate the terms of service and understand what they’re actually paying for,” said Joel Kelsey, Policy Analyst with Consumers Union. “Otherwise, it seems like your phone and cable bill can change month to month.”

The misleading practices commonly used by the phone and cable industry include:

Internet access services are being labeled with theoretical “maximum speeds,” rather than actual speeds. These actual speeds can lag behind advertised rates by 50 percent.

New “PowerBoost” services advertise even faster speeds, but do not guarantee that consumers will get faster service despite higher bills.

Service providers often deliberately obscure the real cost of services with misleading advertising that hides fees, surcharges, promotional periods, early termination fees and bundling requirements.

Contact: David Butler, Consumers Union, (202) 462-6262