AT&T, Verizon Change Contract Policies Preceding Congress Hearing

Last week the nation's two largest cell phone carriers, AT&T and Verizon Wireless amended their policies on cellphone contracts before a hearing held by lawmakers with the intention of "legislating consumer-friendly prices". In other words, cell companies changed some of their policies just before a hearing where politicians were planing on forcing them to be nicer to customers.

AT&T and Verizon Wireless said that they would be letting customers make changes to their calling plans without automatically extending their contracts, something that had been commonplace until now.

"Consumers often feel like their wireless providers have the upper hand," Sen. Amy Klobuchar (D-Minn.) said yesterday at the Senate Commerce Committee hearing.

In the past three years, comsumers have filed more complaints about the wireless industry than any other company in the U.S., according to the Council of Better Business Bureaus. Among the most common complaints are contract-related complaints.

A bill introduced by Klobuchar last month would require wireless companies to prorate fees charged to customers to cancel their cellphone contracts. Some companies charge up to $200 to cancel cellhone service before the end of a two-year contract.

Some consumer advocates say this preemptive move by AT&T and Verizon Wireless is their attempt to convince lawmakers that further legislation is not necessary.

"The political pressure appears to be working," Christopher Murray, senior counsel for Consumers Union said in his testimony at the hearing.

Unfortunately, the action taken by AT&T is far from revolutionary. They are replacing their $175 cancellation fee with a proprated system so customers pay a smaller fee as they near the end of their contract... but they still pay a fee.

Verizon Wireless went a step further; last week they began allowing customers to change their calling plans without extending their contracts for the usual year or two.

Still no unlocking of phones to be seen.

AT&T spokesman Mark Siegel claimed that while while "many factors" go into the company's decisions, the policy changes "were driven primarily by what our customers tell us. . . . we are always looking to do what's fair and right for the customer."

Klobuchar's bill, co-sponsored by Sen. John Rockefeller IV (D-W.Va.), proposed requiring carriers to provide consumers with detailed maps of their coverage areas and data about dropped calls previous to signing up with a contract. Her bill would also give individual states the power to impose additional rules on carriers' contract terms and fees.

It would also ask the Federal Communications Commission to look at the ability of carriers to prevent cellphones from being used on other cellular networks.

But don't think that the bill is being opposed by only the cell companies. Sen. Ted Stevens (R, Alaska) is worried that customers "would be forced into less attractive wireless plans" if Congress were to intervene. "If Congress acts too rashly, the end result could be that consumer prices would go up," he said.

Well, Senator, then it's a good thing that we have a central government to keep that kind of thing from happening, too.

[via Washington Post]