Wireless Companies Stave Off Regulation With New Usage Alerts

FCC agrees to put rulemaking on hold

Wireless companies dodged the heavy hand of government regulation today, agreeing to adopt consumer usage notification guidelines.

Next year, member companies of the CTIA-The Wireless Association, will start sending out free alerts to consumers when they're approaching plan limits on their wireless service. In exchange, the Federal Communications Commission has agreed to put on hold a rulemaking that would have codified the same guidelines the industry agreed to voluntarily adopt.

In announcing the voluntary guidelines, FCC Chairman Julius Genachowski said the guidelines would go a long way toward stopping "bill shock" experienced by one in five cell phone consumers when they see unexpected charges on their bills.

The guidelines also help the wireless industry—which hasn't exactly warmed to regulation of the Internet and wireless—keep the FCC at bay. The new usage notification guidelines will help the industry "avoid costly regulation," said Steve Largent, president and CEO of CTIA-The Wireless Association.

CTIA member companies, which cover 97 percent of wireless consumers, will begin to implement two out of four notifications for data, voice, text, and international roaming, by Oct. 17, 2012 and all of the alerts by April 17, 2013. Some companies, such as Verizon and AT&T, already provide some wireless usage alerts.

Though the FCC stopped short of regulation and put its 2010 rulemaking on hold, the commission didn't rule out using what power it has to make sure companies comply. "Moving forward, the FCC will take a 'trust, but verify' approach," Genachowski said.

What statutory authority the FCC has to enforce voluntary guidelines is unclear and Genachowski cleverly dodged that question following the presentation. "If there is no compliance, we will take appropriate action," he said. "We expect to see these commitments carried out."