Commentary: Wireless: A Little Government Meddling May Not Hurt
Lewis and Tonya Piper bought a mobile phone from AT&T last May so they could talk more often before their wedding in August. Lewis was commuting from Kent, Ohio, to Medina, about an hour west, and wanted to stay in touch with his bride-to-be. Instead of convenience, the couple got headaches. "Half the time, the phone wouldn't work," says Tonya, 20. The Pipers canceled their service in September.
Sound familiar? Then you're in good company. Wireless phone service in the U.S. is lousy. A recent study of about 3,000 customers by Yankee Group Research Inc. found that 30% had significant problems with their service. The most common issues are poor voice quality, dropped calls, and attempted calls that fail. Worse, the number of customers who had problems "very often" increased to 7% from 2% during the past year.
STRICT STANDARDS. How did we get into this mess? Certainly, many wireless service providers are at fault for not investing enough in their networks. But the federal government deserves some of the blame, too. In most European nations, governments set strict standards for quality when they auctioned off mobile-phone
licenses. France, for example, requires that wireless customers be able to establish a call, have a clear conversation, and terminate the conversation on their own 95% of the time in the 10 largest cities. The standard is 85% in other areas. French regulators test service once a year, and the results are published widely.
The U.S. government set no such standards for wireless operators, even though they closely monitor quality levels for traditional telephone service. Regulators figured there was no need for standards in wireless because competition would take care of the problem. Indeed, U.S. regulators have succeeded in fostering intense competition, resulting in per-minute charges that tend to be lower than in Europe.
But the FCC's approach to quality has been disastrous. One reason is that there isn't enough reliable information available to enable consumers to make intelligent choices. The FCC hasn't made any data on wireless service public for more than a year, although it hopes that will change in the near future. Private firms, such as Yankee Group and J.D. Power & Associates, provide good market research on overall satisfaction with wireless carriers, but they can't do thorough analysis of quality because much of that info is proprietary. Without good information, consumers can get blindsided.
What's the answer? Representative Anthony D. Weiner (D-N.Y.) plans to introduce legislation on Feb. 13 that would require the FCC to compile information on consumer complaints about wireless service. Specifically, he wants the FCC to release data twice a year on the number of complaints lodged against each carrier and the nature of the gripes.
Weiner's proposals are a good start, but the new FCC chairman, Michael K. Powell, should go further. While the FCC can't impose quality requirements after licenses have been awarded, the commission should take an activist role in making sure that reliable quality-of-service statistics for each carrier are made public at least once a year. What it should aim for is a simple statistic, like the on-time arrival figure used for airlines, that will quantify each carrier's quality of service.
Here's one suggestion: The FCC could rank each carrier on the percentage of times that a call attempt doesn't go through, that voice quality is so poor a conversation is impossible, or that a call is disconnected. For example, if AT&T had 5% failed-call attempts, 2% poor voice quality, and 4% dropped calls, its total failure rate would be 11%. Consumers could compare its performance with rivals'.
Nobody is crazy about government bureaucrats compiling this information. However, the FCC could hire an independent company to test mobile-phone networks and then publicize the results. Alternatively, it could take data from the wireless players, with random auditing to ensure reliability. Activist regulation from Powell and the new Bush Administration? Maybe it's not so outrageous. The laissez-faire approach toward quality has failed miserably so far.