Wireless

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Universal Service, Affordability, and Customer Protection for Residential Utility Consumers.

Wireless Telephone Consumer Rights

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Although Section 332(c)(3)(A) of the Federal Communications Act prohibits states from regulating wireless telephone rates unless specific authorization is obtained from the FCC, it expressly allows states and state utility regulatory agencies to "regulate the other terms and conditions of service,” including customer protection.

Wireless telephone service providers in New York were found by the New York Public Service Commission (PSC) to be "telephone corporations" as defined by the Public Service Law. Subsequently, the Public Service Law was amended in 1997 to “suspend” all the PSC’s powers over cellular telephone providers “unless the commission, no sooner than one year after the effective date of this subdivision, makes a determination, after notice and hearing, that suspension of the application of the provisions of this chapter shall cease to the extent found necessary to protect the public interest.” PSL § 5.6(a)

The PSC has not acted to protect consumers by reviving its jurisdiction over “terms and conditions” of wireless telephone service. The plain language of the federal law quoted above permits state regulation of “other terms and conditions” and so New York State is not preempted by the federal law from adopting consumer protection measures.

Since 1997, wireless telephone service has expanded greatly. Once a luxury used by few, now more than ten million New Yorkers use wireless telephone service. Many wireless telephone consumers have themselves experienced or heard from their personal acquaintances examples of widespread and systematic consumer abuses regarding the terms and conditions of wireless telephone service, poor service quality, billing errors, termination of service, and lack of effective procedures for redress of consumer grievances.

The New York Attorney General observed that “More consumers than ever are buying wireless phones for business and personal use. With the increased competition between telecommunications companies throughout the State, wireless phones have become much less expensive and much more accessible. The use of wireless phones have become so integral in some people's lives that they can no longer imagine living without them. Some consumers are even opting to keep a wireless phone as the primary phone line of their households. Although many consumers are content with the wireless phones and service contract, my office has received an increasing number of phone inquiries and complaints on the subject.” Attorney General Consumer Tips: Wireless Phones

The growing importance of wireless telephone service requires the establishment of basic consumer rights and remedies that apply equally to all providers, so that competition can evolve on a level playing field.

Only a few providers dominate the New York wireless telephone market, and thus it cannot be assumed that they lack market power. Moreover, competition among wireless providers does not obviate the need for consumer protections for wireless customers.

Typically the “boilerplate” conditions of service unilaterally imposed by the telephone companies purport to strip wireless telephone consumers of longstanding, customary rights and remedies associated with their other telecommunications services. Customers often find themselves locked into long-term commitments with substantial early termination fees while the contracts often allow the wireless telephone company to change any rates, terms and conditions of the contract on two weeks’ notice. Also, there is no way competitors could agree to customer dispute resolution by an administrative agency without enactment of legislation.

2007 Proposed Legislation

AAPR Press Release - New York Cell Phone Legislation Puts Safety First - 02-07-2007
AARP Fact Sheets - Cell Phone for Safety & Security in Case of Emergency, Cell Phone Service Bills, Long-Term Contracts, and Complaints, Older Persons and Wireless Telephone Use.

NYPIRG Support Legislation - A.2030 - 02-07-2007

2006 Proposed Legislation

Groups Battle Cell Phone Industry For Consumer Protection Law - Seniors, Low-Income, Consumers, and Women’s Campus Safety Advocates Press for Nation’s Strongest Cell Phone Law - AARP News Release - 05-02-2006

Consumers Union Memorandum in Support of Wireless Telephone Service Consumer Protection Act - 05-02-2006

NYPIRG Supports Legislative Memorandum A.8539 - 05-02-2006

Wireless Telephone Consumer Protection Act -
Senate Bill S4263
Assembly Bill A8539

Testimony of Ben Wiles, Esq. Senior Attorney - Public Utility Law Project of New York, Inc. Before the Assembly Standing Committee on Consumer Affairs and Protection Assembly Standing Committee on Corporations, Authorities and Commissions Hearing to Examine the Need for Increased Consumer Protection for Wireless Telephone Customers in New York State - 03-13-2006

Testimony on Wireless Consumer Protection Legislation - Dr. Douglas Elfner - Consumer Protection Board - 03-13-2006

Cell Phone Consumer Protection Legislation Introduced In New York -- Called Strongest In the Country - 3-2004

Draft Cell Phone Legislation - the wireless telephone consumer protection act of 2001 - 03-26-2004

Legislation (A8539) has been introduced to provide protections for New York’s wireless telephone consumers.

2005

FCC Attempts to Pre-Empt States from Protecting Wireless Phone Consumers

NASUCA v FCC, 11th Circuit - 07-31-2006
States can regulate non rate terms and conditions of service.

Pacific Bell Wireless, LLC v. California Public Utilities Commission, CCA Fourth Dist., No. G034991 (June 20, 2006).

“[T]he [California] Commission’s challenge to the [Early Termination Fee] and to Cingular’s policy of permitting no grace period, combined with the misrepresentations regarding service, is not a preempted regulation of rates or of market entry. The principal purpose and direct effect of the penalties imposed by the Commission are to prevent misrepresentations by Cingular and to compensate the wireless customers who paid ETF’s. The effect of these penalties on Cingular’s rates is incidental, and the Commission’s decisions are therefore not preempted by 47 United States Code section 332(c)(3)(A)."

In Marcus v. AT&T Corp., 138 F.3d 46, 54 (2d Cir. 1998), the Court of Appeals for the Second Circuit held that the Federal Communications Act (FCA) did not preempt consumer claims based on state law. The case involved a customer suing a long distance telephone company in court for damages under the General Business Law. The court stated:

"[A]bsent some express statement or other clear manifestation from Congress that it intends the complete preemption doctrine to apply, we believe that federal common law does not completely preempt state law claims in the area of interstate telecommunications. The FCA not only does not manifest a clear Congressional intent to preempt state law actions prohibiting deceptive business practices, false advertisement, or common law fraud, it evidences Congress's intent to allow such claims to proceed under state law. "

This rationale should also apply if the New York legislature creates new administrative remedies for wireless telephone customers, because the FCA expressly allows states to protect customers with respect to terms and conditions of service.

FCC Extends Truth-in-billing Rules to Wireless Phones; Seeks Comment on Additional Measures to Increase Ability of Consumers to Make Informed Choices - FCC Press Release- 3-10-2005

Separate Statement of Commissioner Michael J. Copps, Approving in Part, Dissenting in Part - 3-10-2005

Consumer Groups Say FCC Decision Is a Defeat in the Effort to Protect Consumers from Misleading Long Distance and Cell Phone Charges - Federal Agency Uses Consumer Groups’ Call for “Truth in Billing” to Stop States from Protecting Cell Phone Users- Press Release - 3-10-2005

FCC ACTION ON NASUCA TRUTH-IN-BILLING PETITION RAISES CONCERNS - NARUC Press Release - 3-10-2005

Articles

2007

Federal Appeals Court Decision May Make Class-Action Waivers Harder To Enforce - Mondaq.com, -09-14-2007

Courts Find Unilateral Changes to Web-Based Terms and Conditions and Prohibitions on Class Action Lawsuits by Consumers Unconscionable - Communications Law Bulletin - July/August 2007 - Part Two - 09-06-2007

New York Cell Phone Safety Law: AARP Presses for Law to Make Cell Phones Better Tool in Emergency - AARP Press Release - 02-06-2007

Texas Sues Sprint over Charge - Dallas News - Associated Press -
02-06-2007

2006

Downtown Albany Gets Free Wireless Internet: Users Can Access the Web for One Hour Each Day Using Service via Tech Valley Communications - Times Union - 11-30-2006

Cell Industry Front Group Attacks AARP to Defeat Consumer Protections - AARP Press Release - 06-20-2006

Consumer Groups Warn Public of Cell Phone Industry Tactics - AARP Press Release - 06-15-2006

CTIA Fights New York's Consumer Bill of Rights; and Battle Royale Ahead over Net Neutrality - World and OSS Today - 04-2006

AARP New York: Assembly Moves to Provide Nation's Strongest Cell Phone Consumer Protections - US Newswire - 06-07-2006

Cellular Phone Law Faces Obstacle - Senators Want Study on Bill That Would Allow Early Exit to Service Contracts - Times Union -
06-07-2006

Verizon Sees Wireless Margins near 50 Percent-cfo - Reuters - 05-23-2006

Wireless Internet Service Is Sought for All of Ulster County - Daily Freeman - 05-18-2006

AARP Criticizes Wright on Cell Phone Rights Bill - Watertown Daily News - 05-18-2006

Groups Urge Cell `Bill of Rights': Lawmakers, AARP Say They Want to Protect Senior Users. - Elmira Star-Gazette - 05-03-2006

AARP Presses for Strongest Cell Phone Consumer Law in Nation - AARP Press Release - 3-13-2006

New Regulations Would Triple Telephone Rates in Some Areas - Newsday - 03-14-2006

Assembly Gets Cellphone Billing Complaints - Consumers Call for Industry Regulation to Deal with Confusing Statements, Wireless Contract Red Tape - Times Union, March 14, 2006

2005

Concerns Over Falling Phone Usage - Cellular News - 8-15-2005

FCC Asked to Probe Decline in Home Phones - Chicago Tribune -
8-11-2005

Phone Fees Called Into Question - Washington Post - 7-26-2005

Groups urge FCC to tighten telecom billing rules - RCR Wireless News -
6-28-2005

CTIA asks FCC for national wireless billing framework - RCR Wireless News - 6-27-2005

The Need for Wireless Telephone Consumer Protections: A Survey of New York Residents - AARP Press Release - 6-2004
Full Report - 6-2004

-No Signal - Cellphone Hangup: When You Dial 911, Can Help Find You? s More People Go Wireless, Patchwork of Call Centers Slows Locater System Upgrade Money Spent on Boots - The Wall Street Journal -5-12-2005

TLPJ Challenges Cingular's Class Action Ban: Cingular Wireless Users in Washington State Seek Justice for Breach of Promise to Provide 'Free' Long-Distance and Roaming Services - Trial Lawyers for Public Justice Newsletter - Winter 2005 - 5-03-2005

2004

Cellphone Industry Turns to Unmined Territory: Seniors - NY Times -
10-09-2004

California Regulators Levy Multi-Million Dollar Fine against Cingular- Telecomweb - 09-27-2004

Cell phone users beware! - Staten Island Advance - 06-15-2004

New Yorkers Want Cell Phone Consumer Rights: AARP Survey Shows Overwhelming Support for State Legislation to Oversee Wireless Telephone Industry, AARP Press Release 6/14/04

The Need for Wireless Telephone Consumer Protections: A Survey of New York Residents, AARP Report, 2004

Cellphone Tax Produces Little for Cellphones - NY Times - 05-10-2004

Consumer groups want state oversight of cell phone companies - Associated Press - 03-24-2004

Groups call for cell phone companies to offer consumer protections - The Capital Business Review - 03-24-2004

AARP and PULP Urge Consumer Protections for All Wireless Phone Users, Press Release 3/24/04

Can You Hear Us Now? - Metroland Online - 3-2004