FCC Lowers Phone Company Reporting Requirements

Published December 1, 2008

Federal regulators have agreed to cut the amount of information they collect from the country’s largest phone companies about service quality and customer complaints.

The Federal Communications Commission in September approved a request from AT&T to allow the company to stop filing yearly reports on service quality, customer satisfaction, and infrastructure investment. The company said the reports were not necessary and were too expensive to prepare.

Activists Push Back

The move sets the stage for letting other major carriers do the same—over the objections of consumer groups, who say poor phone service will follow.

FCC began requiring carriers to file Automated Reporting Management Information System (ARMIS) reports in 1990, saying the reports were necessary to ensure carriers were not reducing the quality of their networks to increase profits. Some analysts say the reports are unnecessary now because consumers are able to switch to other carriers if service isn’t what they expect.

The reports were required only from the largest landline carriers, not from smaller carriers or cable and wireless telephone service providers. But even this incomplete information kept most carriers on their toes, some experts argue.

“Without this type of reporting, how do consumers push back when telecom firms don’t meet their requirements?” said Peter Radizeski, telecom specialist for Tampa, Florida-based RAD-INFO, Inc. He said Verizon had a poor record on these reports for a few years and that kept the firm from getting government approval for expansion in Maryland.

But Steve Titch, a telecom analyst for the Los Angeles-based Reason Foundation, says the regulation calling for regular reporting was borne out of the telecom monopoly age, when consumers had a choice of one phone company or no service. The reports were justified decades ago, he said, because consumers had few market choices and their complaints carried little weight with the phone company.

Expense Called Unnecessary

Radizeski says he expects consumers to experience a lower quality of service without the accountability the reports provided.

But with multiple providers competing in most areas, consumers can choose from a variety of landline, wireless, and voice-over-Internet Protocol carriers, Titch notes. If consumers fail to get the service they desire from one company, he said, they can now easily switch to another carrier. Thus the need for expensive reports is gone.

“The reports included things like service outages and network availability,” Titch said. “They were very time-consuming and expensive to produce.”

Phil Britt ([email protected]) writes from South Holland, Illinois.