AT&T, Verizon May Have to Warn Mobile-Phone Users Topping Limits

Verizon Wireless, AT&T Inc. and smaller competitors may have to start alerting mobile-phone subscribers who are about to exceed their monthly limits and trigger higher service charges, a U.S. regulator said.

The Federal Communications Commission will propose rules tomorrow and may take a final vote in coming months, Chairman Julius Genachowski said in an interview. Subscribers may get voice or text alerts when they use too many minutes in a month or place calls using more expensive networks outside the U.S., the agency said in a summary distributed by e-mail.

The FCC has reports of unauthorized “‘mystery fees’ popping up on bills,” Genachowski said today in a speech in Washington. “It’s hard to keep track of everything you’re being charged and too easy to find yourself paying more than you had planned on.”

A survey by the FCC showed 30 million Americans, or one in six mobile-phone users, had experienced “bill shock,” Genachowski said. The agency received 764 complaints about high bills in the first half of this year, 20 percent for charges of $1,000 or more, according to an analysis released today. The largest complaint was over a $68,505 charge, the agency said.

Carriers led by Verizon Wireless, under FCC investigation for overcharging 15 million customers for data, have said mandatory messages aren’t necessary because carriers give customers ways to track use of data, voice and text features.

Fees Studied

The FCC also is studying fees for terminating service plans before contracts end, Genachowski said. The review includes charges tied to packages with video, telephone and high-speed Internet service, or broadband, he said.

“Confusion is particularly high for fixed broadband and bundled plans where these fees are a fairly recent development,” Genachowski said. “There’s no reason we shouldn’t have clear and simple disclosure.”

Providers are concerned about “prescriptive and costly rules,” Christopher Guttman-McCabe, a vice president for CTIA- the Wireless Association, a Washington-based trade group, said in an e-mail yesterday. “The industry continues to develop tools to keep customers informed about their level of usage.”

The FCC’s proposal would require clear disclosure of the tools to track minutes of use, in part because “too many consumers don’t know about them,” according to the summary.

A Verizon Wireless customer, Robert St. Germain of Dover, Massachusetts, faced an $18,000 bill after free data downloads expired without warning, the FCC said. The company agreed to forgo the charges after the bill was featured in a newspaper article and the FCC intervened, the agency said.

The company in a May statement said it wrote off the charge because “the remaining balance was uncollectable” and that “bills of this nature are exceptionally rare."

Verizon Wireless is owned by Verizon Communications Inc. and Vodafone Group Plc.

To contact the reporter on this story: Todd Shields in Washington at tshields3@bloomberg.net

To contact the editor responsible for this story: Larry Liebert at lliebert@bloomberg.net.

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