Tuesday, March 8, 2011

Report Shows Consumers Are Making Smart Choices about Wireless Billing Overages

Today the Wireless Communications Association International (WCAI) released a study analyzing overages on wireless consumer bills. The report was authored by Roger Entner of Recon Analytics, who was previously a Senior Vice President at The Nielsen Company. The study, which analyzed more than 78,000 customer bills, found that less than half a percent of consumers experience overages that could even be considered candidates for the pejorative “shocking.” The other 99.7% of consumers actually save money by incurring the occasional overage rather than paying a higher, recurring rate for an upgraded plan. In other words, nearly every single wireless consumer studied was better off incurring some overages than upgrading to a plan they don’t need.

This means that the rules proposed by the FCC would benefit, at most, 0.3% of consumers. At the same time, all wireless consumers would be subject to repeated messages warning them of potential overages. All wireless consumers would also bear the cost of the upgrades wireless service providers would be required to make in order to comply with the FCC’s proposed regulations. If the FCC intends to adhere to President Obama’s Executive Order directing agencies to “propose or adopt a regulation only upon a reasoned determination that its benefits justify its costs,” the FCC should not adopt its proposed “bill shock” rules. There is no reasonable basis for imposing costly regulations on wireless service providers and subjecting all consumers to repeated notices in order to prevent 0.3% of consumers from incurring uneconomic overages.

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