Battle heating up

Posted on February 01, 2008 | Type: In the News
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The battle over state legislation to regulate mobile phone contracts is already heating up, just two weeks into this years session.

State Sen. Jim Waring, R-Phoenix, has introduced a bill (SB 1010) called the "Cellphone Users Bill of Rights," that would limit wireless phone contracts to 12 months, allow subscribers to cancel a contract during the first month without a penalty or cancel it if the company changes rates or plans that would negatively impact the customer.

A group called Coalition for a Connected West is organizing efforts to fight the bill through its website

It says competition and demand has already forced the industry to adopt more consumer-friendly policies, including both short-term and long-term contracts and pay-as-you-go plans that don't require contracts. Further, most companies now pro-rate early termination fees for customers who want to get out of long-term contracts.

According to data from the Federal Communications Commission, the coalition says complaints about wireless phone services were down 39 percent from 2005 to 2006.

Also, the Goldwater Institute says a study indicates Waring's bill would hurt Arizona consumers by bringing higher prices and fewer choices.

"The deregulation of wireless service by the U.S. Congress in 1993 has brought consumers a 40 percent price drop in six years, better and less expensive equipment, and an amazing array of service options," wrote Solveig Singleton, senior adjunct fellow with the Progress & Freedom Foundations Center for the Study of Digital Property and author of the report. "Wireless companies must design their contracts to protect their investments in new networks. More regulation is likely to raise prices, even if the effect is hard to see, because, with the demand for nationwide pricing, it would not be isolated to one state. Even with that demand, nationwide pricing might not be offered in Arizona because wireless carriers would be forced to comply with Arizona regulations. But hidden costs are still real. The bill is likely to reduce consumer choice and lead to higher prices and less investment in new networks."

In his argument Singleton says existing laws already control fraud and deception.

Waring says he is expecting a fight for his bill.

"They are trying to bully me into killing the bill," Waring told the Arizona Capitol Times. "Do you think I'm going to be bullied by some lobbyist into killing a bill? I don't think so."

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