STATES EYE WIRELESS BEST PRACTICES TO AVERT REGULATIONS

Boyle called the wireless best practices list she circulated at NARUC’s meeting “a work in progress.” The Consumer Affairs Committee took no action on the list, although Boyle said she expected the issue to come up at an Omaha meeting in June of midwestern regulators and then at the NARUC summer meeting in July in Denver. The list of 25 suggested best practices she developed has been provided to industry, and Boyle said she hoped carriers, the FCC and NASUCA would work on recommendations, along with NARUC. Boyle’s preliminary list included best practices such as: (1) Carriers providing signal strength maps throughout service areas. (2) Allowing a 30-day trial period, after which if a customer wasn’t satisfied, no penalty termination charges would be assessed. (3) Billing that outlined daytime, nighttime, govt. taxes, surcharges and carrier-added charges.

Separately, Mo. Attorney Gen. Jay Nixon is in talks with Sprint and Nextel on a lawsuit filed in Dec. that would compel the companies to change how they listed certain charges on bills. “We are in serious negotiations with the defendants and we are hopeful of resolving this fairly soon,” a spokesman for Nixon said. His office filed suit in state Circuit Court in St. Louis over what Nixon called certain misleading and deceptive billing practices. The suit charged that the carriers had raised their rates in 2002 and itemized the increase on bills to make it appear to be a tax or govt.- mandated fee. The lawsuit said Nextel listed the charges as “unit taxes, fees and assessments” under a line item labeled “federal programs cost recovery.” The litigation said Sprint labeled the charges as “USA regulatory obligations and fees” under a heading of “other surcharges and fees.” Nixon said consumers were led to believe such charges were part of a govt. fee “when they are actually part of the companies’ overhead cost of complying with governmental regulations.” Nixon’s spokesman said Wed. the AG won a temporary restraining order in Dec. to stop the practices. Requests for preliminary and permanent injunctions are pending, he said. The case has been followed closely by other states that have raised similar concerns over billing.

“We believe that our advertising and billing practices are truthful,” a Nextel spokeswoman said. The federal programs’ cost-recovery fee that is the focus of the suit spells out what that line item covers and why it is assessed, noting that it isn’t a govt. fee, she said. “It says it is not a tax and not government mandated. We felt that was the most accurate description we could put on there,” she said: “We have said all along that the Missouri case is baseless.” Nextel sent a message to customers and lists information on its Web site that explains that the fee reflects its cost of complying with FCC number pooling and portability and Enhanced 911 obligations, she said. The spokeswoman declined to comment on the prospects of the talks but said the company had been working with the AG’s office on the issue since before the suit was filed: “We, of course, will continue to work cooperatively with them. We believe very strongly in our current practices.”

A Sprint spokesman declined to comment on the lawsuit but last month the company altered the wording on its bills to provide a further breakdown of the federal obligations behind certain charges. According to billing information provided to subscribers, Sprint introduced a surcharge related to federal number pooling that it said “recovers the costs incurred by Sprint to comply with newly effective federal regulations concerning telephone number pooling.” The carrier told customers their invoices would include that charge “until Sprint’s costs are recovered.” Sprint also said it was eliminating the “USA regulatory obligations and fees” line item. Instead, line items are broken out for the federal Universal Service Fund and Enhanced 911. For the USF line item, Sprint says that under federal law, carriers currently contribute a percentage of interstate and international end-user revenue. Sprint said the E911 surcharge recovered the costs it incurred to comply with that federal mandate. “Sprint cautions, however, that the availability of this service to customers is very limited at this time,” the invoice said. The service depends on factors such as the ability of a public safety agency to receive and process the information and the capability of a subscriber’s equipment. Sprint said that charges that appear in the surcharges and fees section “are neither taxes nor government-imposed assessments.” It said the Commission didn’t require carriers to impose those charges but did allow them to recover their costs of compliance with federal mandates.

A CTIA spokeswoman said the group didn’t have a formal role right now in the wireless best practices exercise that NARUC was undertaking. “We work with NARUC on a regular basis,” she said. While CTIA doesn’t have an official role right now in what state regulators are looking at, she said, “we expect we would be involved in some way.” Separately, the wireless industry has been working on its own voluntary guidelines for best practices that would help customers compare factors such as service coverage across different operators (CD March 18 p1). The draft guidelines didn’t come up for a vote at a CTIA board meeting at the group’s annual show last week. “We are still working it over and redrafting it,” a spokeswoman said. “As soon as it is finished it will be presented.” The industry exercise has been separate from other efforts in that area except that one aim is to try to pull together areas for improvement to show that new regulations aren’t needed, the spokeswoman said.

Neb.’s Boyle said the ultimate hope of PUCs and others working with NARUC was that wireless best practices could help to avoid state regulation. “State budgets are stretched to the max. When we take on more responsibilities, it adds more to the workload of all of us,” she said. The point of the best practices for PUCs and others is “common sense issues” that allow customers quick access to billing information and work on service quality issues, Boyle said. With those issues in mind, the goal of carriers and state regulators could be the same, “which is to avoid state regulation,” Boyle said.

FCC Consumer & Governmental Affairs Bureau Chief Dane Snowden said at last week’s CTIA show that the FCC had been working since last fall to facilitate a dialog between wireless carriers and state regulators on the issue, with NASUCA recently saying it would join such discussions. Boyle said she became interested in wireless best practices after a Neb. bill addressing service quality never made it out of committee because of opposition from carriers. Boyle said she then turned to NARUC. “My goal is to try to alleviate a lot of problems, it isn’t to be a heavy-handed regulator,” she said.

Wireless service quality emerged repeatedly in the CTIA show. House Commerce Committee Chmn. Tauzin (R-La.) urged the industry in a keynote speech to move “aggressively” on its own voluntary code of conduct, saying it would avert the need for Congress to act.