Blog Post

FCC Seeks Rules to Avoid $24,000 Mobile Bills

The Federal Communications Commission today sought comment on proposed regulations that would lead to wireless operators notifying cell phone users when their data usage reached a certain threshold. The rules are aimed at preventing the nightmare cell phone bills that can reach media-worthy proportions. While few people will ever get a $24,000 bill, the regulations will also help parents of overzealous texters as well as those who may get close to their data limits on wireless cards every month.

Similar rules have been enacted in Europe, where they’re known as bill shock legislation. Today the FCC released a Public Notice in which it asks:

  • Whether technological or other differences exist that would prevent wireless providers in this country from employing usage alerts similar to those now required by the EU.
  • The extent to which consumers can now monitor their wireless usage and know when they are exceeding their predetermined allocations of voice minutes, text messages, or data usage.
  • The extent to which U.S. providers are already offering such usage alerts, and the cost to the consumer or the provider.
  • Whether certain usage controls lend themselves more to one type of service (such as voice) than to another (such as data).
  • The extent to which such information can be accessed on wireless devices by people with disabilities – in particular, by people who are blind or have low vision — and what kinds of usage alerts would be most helpful to them.

If the FCC does end up requiring carriers to install software to guard against bill shock, it shouldn’t be technically challenging. The top two carriers in the U.S. have agreements, or are in talks to purchase policy management software from Bridgewater Systems (AT&T (s T)) and Camiant (Verizon (s vz)). Such software will likely be used to change the way consumers are charged for mobile broadband as carriers try to match runaway mobile broadband demand to their network capacity and hoped-for profit margins. Both of those software providers also offer software so carriers can follow bill shock regulations.

Related GigaOM Pro Content (sub req’d):

Mobile Broadband: Pricing for Profits

5 Responses to “FCC Seeks Rules to Avoid $24,000 Mobile Bills”

  1. Rosie

    If I had received a $24,000 cell phone bill I would have died of shock! I am so pleased I put our family on Net10 prepaid as we are saving so much money compared to a contract! Our calls now cost us 10c per minute and our texts 5c each and that’s ALL we pay. We will save about $800.00 this year on cell phone bills alone!

  2. Ojas Rege

    It seems we have two market forces crashing into each other: User appetite for mobile data grows as operators get more and more concerned about the network infrastructure economics to keep up. The “easy” solution is to charge, charge, charge, which constantly shocks the user and inhibits the expansion of mobile internet usage. The emerging FCC and EU regulations add a new twist. Visibility is the first step. It will be interesting to see the next.

  3. Something definitely needs to be done about such bills. Heck, if I have some “odd” usage on a credit card I get a call, same with debit, checks, etc. . . but a company that will let a bill spiral out of control without any notification, no warnings. . . something is seriously wrong there.