WASHINGTON -(Dow Jones)- Lawmakers on the Senate Commerce Committee criticized the cellular industry for what they called hidden fees they charge consumers and unfair contract terms they lock them into.
The hearing featured mainly Democratic Senators who in their opening statements took turns chiding the wireless industry for the how they treat their customers.
Sens. Amy Klobuchar, D-Minn., and Jay Rockefeller, D-W.Va., have introduced legislation which would establish a "cell phone bill of rights" for customers, which was the reason for the hearing.
The bill would require cellular companies to discount their contract termination fees the earlier into the term of the contract the customer wanted out of it.
It also calls for wireless companies to provide customers with accurate and easy ways to understand information about the service quality in their area.
"Despite the explosion in the market, the wireless industry continues to operate under rules from two decades ago - when cell phones were a niche market and service was limited to urban areas," said Klobuchar.
In his prepared remarks before the committe, Lowell C. McAdam, Verizon Wireless' chief executive, rejected the notion that the industry didn't look after their customers and that sufficient competition exists in the wireless industry.
"The enormous economic growth we've spurred and the incredible yet affordable technology we have delivered to consumers should be celebrated," said McAdam. "So why turn the clock back now and risk all that's been accomplished by re-regulating the industry?"
McAdam pointed to the fact that Verizon Wireless already pro-rates its early termination fees. On Tuesday, AT&T announced that it would shortly begin doing the same.
Together, the two companies represent 55% of the U.S. cellular market.
Sen. Jim DeMint, R-S.C., defended the industry, saying the rapid growth of wireless devices was accomplished far more effectively by the private sector than if the government had attempted to design the marketplace.
Other Republican lawmakers made similar arguments, with a seemingly clear party divide over whether the industry should face more stringent price regulation.
The bill was endorsed by the Chris Murray, senior counsel at the Consumers Union, also testifying at the hearing.
"We think that the aim of this Bill is on target - to provide consumers more fairness in the marketplace and to provide them with better information about the cell-phone service they are buying," said Murray in his prepared remarks.
-By Corey Boles, Dow Jones Newswires; 202-862-6637; corey.boles@dowjones.com
(END) Dow Jones Newswires
Posted to the site on 17th October 2007
Posted to: www.cellular-news.com/story/26771.php