Media Advisory: Do Cell Phone Users Need a ‘Bill of Rights’?

Published March 26, 2008

(Chicago, Illinois – March 26, 2008) State legislatures across the country are considering tough new regulations on the cell phone industry. At the federal level, Rep. Edward Markey (D-MA) and Sen. Mark Pryor (D-AR) have offered proposals.

Proponents say the measures are needed to protect consumers from locked-in contracts, high contract termination fees, and confusing billing practices. But experts contacted by The Heartland Institute disagreed, offering the following comments on the so-called “bills of rights” for cell phone users.

You may quote from these statements or contact the experts directly at the phone numbers and email addresses provided below.

“Under the rubric of protecting consumers, legislators like Representative Edward Markey seek to micromanage cell phone providers. The effect of new regulations will not be better service, but instead increased mobile-phone bills and slower, less-flexible, providers. While none of the cell phone providers are perfect, it’s competition, not regulation, that will encourage good behavior.”

Sonia Arrison
Senior Fellow
Pacific Research Institute
[email protected]

“Regulations should protect customers from false or intentionally misleading service offers and pricing plans, but legislators should be careful of sweeping rules that address anecdotal problems.

“With millions of people using their cell phones on a daily–sometimes hourly–basis, it’s no surprise that service, pricing, and quality problems occur. Yet overall, usage continues to grow, prices have declined measurably, and companies that have failed to meet competitive standards have been punished by loss of market share. Many Americans are comfortable enough with the reliability of wireless service that it’s the only phone service they use.

“The problem with large-scale customer service regulations, such as a “Wireless User’s Bill of Rights,” however well-intended, is that government, not the marketplace, ends up setting the customer service standard. If the law mandates cell phone companies offer a 30-day service cancellation window, or reduce on-hold waiting time to no more than five minutes, that’s the requirement every service provider will meet.

“Go light on regulation, and competition will force service providers to make quality a differentiator. Pro-rated service contracts, pre-paid phone accounts, and more flexible service bundling all emerged due to competition, not regulation, as service providers sought more ways to one-up the other.” Steven Titch
Telecom Policy Analyst
Reason Foundation
[email protected]

For more information about The Heartland Institute, please contact Harriette Johnson, media relations manager, at [email protected] or 312/377-4000.