‘Cellphone Users’ Bill of Rights’ Bad for Arizonans

Published April 1, 2008

As the Arizona Legislature headed back into session in early January, a package of three “bills of rights” was introduced, purportedly to protect three groups of consumers in the state: airline passengers, cell phone users, and homeowners.

The first to hit the floor for consideration, and perhaps the most contentious, is Senate Bill 1010, the “Cellphone Users’ Bill of Rights,” sponsored by state Sen. Jim Waring (R-Phoenix).

Included in the bill is an array of regulations on the wireless industry. It limits cell phone contracts to 12 months, disallows contract termination fees, and allows cell phone users to terminate their contracts nearly at will.

Cost Worries

Wireless providers are concerned Waring’s bill would drive up the cost of cell phone contracts, costing consumers more in the long haul.

“The wireless industry has been one of the fastest growing of modern times. That fast growth has been due to the fact that consumers have been driving demand and innovation while government has stayed out of the way,” said Tracy King, vice president for public affairs at AT&T.

“Consumers continue to call for newer innovations,” King said, “and the race is on to find them. Government intrusion in the name of the consumer almost always results in one thing–a higher cost for that consumer.”

New Regulatory Burden

Telecom policy analysts warn the proposed regulations on the length of wireless contracts would hinder providers as they try to develop new technologies while forcing them to eliminate cost-saving measures such as cheaper rates for extended contract plans.

A new report from the Goldwater Institute, a free-market think tank based in Arizona, noted enforcing the regulations outlined in SB 1010 would also be costly for consumers and taxpayers.

“Concerns about the costs of wireless phone users’ ‘bills of rights’ have halted legislation in other states,” said the report’s author, Solveig Singleton, a senior policy analyst with the Competitive Enterprise Institute and adjunct fellow with the Progress & Freedom Foundation’s Center for the Study of Digital Property.

Higher Prices, Lost Jobs

Singleton cited California, where a similar “bill of rights” proposal would have cost more than $1 billion a year–a price tag high enough to prevent the rules from being advanced.

“They predicted higher prices, lost jobs, and other consequences as a result of the proposed rules,” Singleton said.

Grover Norquist, taxpayer advocate and president of Americans for Tax Reform, noted consumers already suffer from a high regulatory burden.

“In an annual report published by Americans for Tax Reform Foundation, study author Elizabeth Karasmeighan found that in the United States, the cost of government regulation accounts for 16.9 percent of national income,” Norquist noted.

“The burden on taxpayers from regulation is already high,” Norquist said. “Adding new regulations would only cost Arizonans more.”

Karri Bragg ([email protected]) is state government affairs manager at Americans for Tax Reform.