Subject: [NEXTEL-1] Disconnect deceptive tactics

From: [email-masked]
Date: Thu, 22 May 2003 03:15:43 -0400

Disconnect deceptive tactics

Last August, Missouri voters rejected a referendum that would have
required taxpayers to finance upgrades to cell phone towers so that 911
operators could pinpoint the location of wireless calls.

Within months of the defeat, Sprint and Nextel added fees to customers'
bills to cover the costs of the federally mandated change. Trouble is,
they disguised them to look like new federal taxes. Sprint customers saw
a 2% fee for "USA regulatory obligations and fees" listed under "other
surcharges and fees." Nextel charged each customer an extra $1.55 using
similar terms. In response to the ruses, Missouri's attorney general
filed a suit against the two companies, accusing them of deceptive
practices.

The sham billing saga is not unique to Missouri. Across the USA,
wireless companies that are engaged in price wars to lure customers have
imposed hidden rate hikes on consumers to keep advertised prices down.

Certainly, companies have every right to pass along the costs of
complying with government regulations. But they don't have the right to
hide them in ways that mislead consumers about the real costs of
services.

Unlike taxes passed on to the government, the companies keep the fees.
Some charges are being spent to ensure that 911 operators can track the
location of cell phone callers by 2006. Others cover the costs of
allowing customers to keep their numbers when they change carriers. Some
fund technical improvements needed to meet the demand for new phone
numbers.

Mislabeling these fees as taxes creates openings for anti-consumer
abuses:

•Truth in advertising. Companies can sign up customers with deceptively
low prices. In Missouri, for instance, Nextel advertises a monthly plan
for $39.99. But the state attorney general says the actual cost is
$45.53, 14% higher, when fees and taxes are added. Nationally, companies
tack on 20% in fees and taxes on average, according to the Wireless
Consumers Alliance.

•Breech of contract. Normally, companies let customers out of six-month
and one-year contracts if they raise rates. By passing increases off as
taxes, they can keep customers trapped in the contracts.

•Padded charges. The telephone industry has a history of inflating costs
for federal regulations they say they are passing on to customers. On
April 1, the Federal Communications Commission set a 9.1% monthly
"universal service" charge to cover the costs of federal mandates on
land-line phones. The action came after the FCC concluded that companies
overcharged when allowed to set the rate themselves.

cell phone firms say they are properly labeling fees to bring attention
to the steep costs the government imposes on them. If that were true,
the charges would clearly reflect the programs they fund, many of which
directly benefit customers. Number portability is popular with cell
phone users. The 911 requirement is a security blanket for travelers in
unfamiliar settings. And a "universal service" fee increases the
percentage of the USA that has cell phone coverage.

Customers may or may not object to paying these charges when they are
clearly identified. But they need to know about them before they sign on
the dotted line.

Find this article at:
http://www.usatoday.com/news/opinion/editorials/2003-05-21-edit_x.htm

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