Telecommunications: FCC Needs to Improve Oversight of Wireless Phone Service
GAO-10-34
Published: Nov 10, 2009. Publicly Released: Dec 10, 2009.
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Highlights
Americans increasingly rely on wireless phones, with 35 percent of households now primarily or solely using them. Under federal law, the Federal Communications Commission (FCC) is responsible for fostering a competitive wireless marketplace while ensuring that consumers are protected from harm. States also have authority to oversee some aspects of service. As requested, this report discusses consumers' satisfaction and problems with wireless phone service and FCC's and state utility commissions' efforts to oversee this service. To conduct this work, Government Accountability Office (GAO) surveyed 1,143 adult wireless phone users from a nationally representative, randomly selected sample; surveyed all state utility commissions; and interviewed and analyzed documents obtained from FCC and stakeholders representing consumers, state agencies and officials, and the industry.
Based on a GAO survey of adult wireless phone users, an estimated 84 percent of users are very or somewhat satisfied with their wireless phone service. Stakeholders GAO interviewed cited billing, terms of the service contract, carriers' explanation of their service at the point of sale, call quality, and customer service as key aspects of wireless phone service with which consumers have experienced problems in recent years. The survey results indicate that most users are very or somewhat satisfied with each of these key aspects of service, but that the percentages of those very or somewhat dissatisfied with these aspects range from about 9 to 14 percent. GAO's survey results and analysis of FCC complaint data also indicate that some wireless phone service consumers have experienced problems with billing, certain contract terms, and customer service. While the percentages of dissatisfied users appear small, given the widespread use of wireless phones, these percentages represent millions of consumers. FCC receives tens of thousands of wireless consumer complaints each year and forwards them to carriers for response, but has conducted little other oversight of services provided by wireless phone service carriers because the agency has focused on promoting competition. However, GAO's survey results suggest that most wireless consumers with problems would not complain to FCC and many do not know where they could complain. FCC also lacks goals and measures that clearly identify the intended outcomes of its complaint processing efforts. Consequently, FCC cannot demonstrate the effectiveness of its efforts to process complaints. Additionally, without knowing to complain to FCC or what outcome to expect if they do, consumers with problems may be confused about where to get help and about what kind of help is available. FCC monitors wireless consumer complaints, but such efforts are limited. Lacking in-depth analysis of its consumer complaints, FCC may not be aware of emerging trends in consumer problems, if specific rules are being violated, or if additional rules are needed to protect consumers. FCC has rules regarding billing, but has conducted no enforcement of these rules as they apply to wireless carriers. This August, FCC sought public comment about ways to better protect and inform wireless consumers. In response to GAO's survey, most state commissions reported receiving and processing wireless phone service consumer complaints; however, fewer than half reported having rules that apply to wireless phone service. Stakeholders said that states' authority to regulate wireless service under federal law is unclear, leading, in some cases, to costly legal proceedings and reluctance in some states to provide oversight. FCC has provided some guidance on this issue but has not fully resolved disagreement over states' authority to regulate billing line items and fees charged for terminating service early. State commissions surveyed indicated that communication with FCC about wireless phone service oversight is infrequent. As such, FCC is missing opportunities to partner with state agencies in providing effective oversight and to share information on wireless phone service consumer concerns.
Recommendations
Recommendations for Executive Action
| Agency Affected | Recommendation | Status |
|---|---|---|
| Federal Communications Commission | To improve the effectiveness and accountability of FCC's efforts to oversee wireless phone service, the Chairman of the Federal Communications Commission should direct the commission to clearly inform consumers that they may complain to FCC about problems with wireless phone service and what they can expect as potential outcomes from this process, and expand FCC's outreach to consumers about these efforts. |
In 2009, as part of our work to review consumers' satisfaction with wireless phone service and evaluate the Federal Communications Commission's (FCC) efforts to oversee services provided by wireless phone service carriers, we surveyed 1,143 adult wireless phone service users. This survey found that most consumers were very or somewhat satisfied with their wireless phone service, but that some consumers were dissatisfied with key aspects of their service, such as billing, contract terms, and call quality, among other issues. Further, results of the survey suggested that most wireless consumers with problems would not complain to FCC if they had a problem their wireless carrier did not resolve, and many did not know they could complain to FCC. FCC had a process for receiving and addressing consumers' complaints, but, based on the consumer survey results, we concluded that FCC's outreach to consumers may not have been adequate to inform the public about the agency's role in handling consumer complaints. We recommended that FCC clearly inform consumers that they may complain to FCC about problems with wireless phone service and what they can expect as potential outcomes from this process, and expand FCC's outreach to consumers about these efforts. In January 2015, FCC launched an online consumer help center to make it easier for consumers to file complaints and get information about issues of potential concern. The website includes a list of wireless phone service topics with additional information for consumers, such as wireless service fees and billing. The website makes it clear that consumers can file complaints about these issues, and a separate page explains how FCC will handle the consumer's complaint. According to FCC officials, the launch of the new website was accompanied by consumer and media outreach that resulted in press coverage. As a result of these efforts, consumers should be able to more easily learn about FCC's complaint handling process and take advantage of the process to address concerns they may have with their wireless phone service.
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| Federal Communications Commission | To improve the effectiveness and accountability of FCC's efforts to oversee wireless phone service, the Chairman of the Federal Communications Commission should direct the commission to develop goals and related measures for FCC's informal complaint-handing efforts that clearly articulate intended outcomes and address important dimensions of performance. |
Wireless phones are an important means of communication for most Americans. Under federal law, the Federal Communications Commission (FCC) is responsible for fostering a competitive wireless marketplace while ensuring that consumers are protected from harmful practices. FCC's regulations include procedures for handling consumer complaints and the agency processes tens of thousands of wireless consumer complaints each year. In 2009, GAO reported that FCC lacked goals and measures that articulate the intended outcomes of its efforts to process consumer complaints. Specifically, FCC receives informal consumer complaints and forwards to carriers for response. However, GAO's survey results suggested that most wireless consumers with problems would not complain to FCC and many do not know where they could complain. The Government Performance and Results Act of 1993 requires an agency to establish outcome-related performance goals for its major functions. The act also requires an agency to develop performance indicators for measuring the relevant outcomes of each program activity in order for the agency to demonstrate how well it is achieving its goals. Although FCC had goals and measures related to the complaint effort, GAO found that FCC's goals may not represent all of the important dimensions of FCC's performance in addressing consumer complaints. However, it is not clear whether resolving problems is an intended outcome of FCC's consumer complaint efforts. Because FCC has not clearly articulated the intended outcomes of its complaint-processing efforts, consumers may not know the extent to which FCC can aid them in obtaining a satisfactory resolution to their concerns. Therefore, GAO recommended that FCC develop goals and related measures for FCC's informal complaint-handing efforts that clearly articulate intended outcomes and address important dimensions of performance. In October 2018, GAO confirmed that FCC has developed and implemented goals and measures for its informal complaint process. FCC implemented a new online Consumer Complaint Center with the goal to improve the consumer complaint experience by more clearly explaining the complaint process and outcomes, as well as what the consumer could expect from it. Next, FCC developed and implemented three goals and related measures that address performance on its consumer complaint efforts. These goals and measures set targets and establish associated measures for how quickly FCC forwards a consumer's complaint to a carrier, how quickly carriers respond to consumer complaints, and a consumer's satisfaction with the carrier's response. As a result of these efforts, FCC is in a better position to (1) ensure that consumers with wireless service problems know to seek assistance from FCC and what kind of assistance to expect from the agency and (2) demonstrate the effectiveness of the assistance provided to consumers.
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| Federal Communications Commission | To improve the effectiveness and accountability of FCC's efforts to oversee wireless phone service, the Chairman of the Federal Communications Commission should direct the commission to develop and implement policies and procedures for conducting documented monitoring and analysis of consumer complaints in order to help the agency identify trends and emerging issues and determine whether carriers are complying with existing rules or whether new rules may be needed to protect consumers. |
Under federal law, the Federal Communications Commission (FCC) is responsible for fostering a competitive wireless marketplace while ensuring that consumers are protected from harmful practices. FCC's rules (or regulations) include procedures for handling consumer complaints. In 2009, we reported that FCC processes tens of thousands of wireless consumer complaints each year, but has conducted little additional oversight of services provided by wireless phone service carriers because the agency has focused on promoting competition. FCC monitors informal complaints submitted by consumers to determine whether further regulation is needed and if the wireless industry is complying with the agency's rules, but such monitoring is limited. FCC does not routinely conduct more in-depth reviews of the nature of wireless consumer complaints unless they are needed to support an FCC decision-making effort. FCC does not document its monitoring of consumer complaints and does not have written policies and procedures for routinely monitoring complaints. Lacking in-depth analysis of its consumer complaints, FCC may not be aware of trends or emerging issues related to consumer problems, if specific rules--such as the truth-in-billing rules--are being violated, or if additional rules are needed to protect consumers. Our standards for internal control in the federal government state that agencies should have policies and procedures as an integral part of their efforts to achieve effective results. Without adequate policies and procedures for conducting such analyses of its consumer complaints, FCC may not be able to ensure that its decisions to exempt carriers from regulation promote competition and protect consumers. Therefore, we recommended that FCC develop and implement policies and procedures for conducting documented monitoring and analysis of consumer complaints in order to help the agency identify trends and emerging issues and determine whether carriers are complying with existing rules or whether new rules may be needed to protect consumers. In 2015, FCC launched a new online consumer help center, and in 2016, FCC launched a new consumer complaint data center, which, together, made improvements to how the agency monitors and analyzes complaints. According to FCC officials, the new complaint center allows FCC to better and more quickly analyze incoming complaints. FCC officials said they review complaints as they come in and route them, as appropriate, to different parts of the agency to inform both policy and enforcement actions. To support this work, FCC hired a data analyst and economist to analyze complaints and added an escalation process for addressing issues with carriers that appear in the complaints. Additionally, FCC's online consumer complaint data center provides the public more information and transparency about consumer complaints. The data center includes visualizations of various communications issues raised in consumer complaints, and allows the public to view information from individual complaints, representing an expansion of the complaint data FCC had previously provided. These changes should enhance FCC's ability to identify consumer concerns and protect consumers from harm.
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| Federal Communications Commission | To better ensure a systemwide focus in providing oversight of wireless phone service and improve FCC's partnership with state agencies that also oversee this service, the Chairman of the Federal Communications Commission should direct the commission to develop and issue guidance delineating federal and state authority to regulate wireless phone service, including pulling together prior rulings on this issue; addressing the related open proceedings on truth-in-billing and early termination fees; and, if needed, seeking appropriate statutory authority from Congress. |
Wireless phones are an important means of communication for most Americans. Under federal law, the Federal Communications Commission (FCC) is responsible for fostering a competitive wireless marketplace while ensuring that consumers are protected from harmful practices. States also have some authority to oversee some aspects of wireless phone service. Specifically, in 1993, Congress developed a wireless regulatory framework that expressly prohibited states from regulating the market entry or rates charged by wireless phone service carriers, while retaining states' authority to regulate other "terms and conditions" of wireless service. In 2009, GAO reported that states' authority under federal law to regulate wireless phone service was not clear, based on the views of various stakeholders that GAO analyzed through examination of FCC proceedings, court cases, interviews, and a survey of state utility commissions. For example, courts had been grappling with cases about whether states can regulate fees that wireless carriers charged customers for terminating service before the end of a contract term. GAO also reported that FCC had provided some guidance on this issue but had not fully resolved disagreement over states' authority to regulate billing line items and early termination fees. As a result, the lack of clarity regarding states' authority to regulate wireless service had led to delays in deciding some legal matters and some state-level officials said that their states had been reluctant to regulate wireless phone service until their authority is clarified. Therefore, GAO recommended that FCC develop and issue guidance delineating federal and state authority to regulate wireless phone service, including pulling together prior rulings on this issue; addressing the related open proceedings on truth-in-billing and early termination fees; and, if needed, seeking appropriate statutory authority from Congress. In July 2018, GAO confirmed that FCC took action to address this recommendation. Although FCC has not developed the guidance as GAO recommended, the agency has taken other actions that essentially meet the intent of the recommendation, as the agency provided further clarification on federal and state wireless regulatory authority, particularly with regard to billing. For example, in March 2018, FCC released a declaratory ruling in a proceeding related to FCC's truth-in-billing rules that clarified FCC's authority to regulate wireless service, citing a Supreme Court ruling that FCC has the authority to make rules implementing all provisions of the Communication Act of 1934, including those that apply to intrastate communications. Also, in June 2018, FCC issued new rules in a proceeding examining the billing practices known as "slamming" (carriers changing a customer's voice service provider without permission) and "cramming" (carriers billing customers for bogus charges). Specifically, these rules codified FCC's position and authority to regulate "cramming," as well as reiterated that FCC's rules allow states to administer FCC's "slamming" rules. Additionally, FCC staff said that FCC continues to work with state officials on a number of issues related to wireless phone service billing, including engaging in enforcement actions with states' attorneys general, participating in conference calls with state officials, and soliciting and receiving comments from states in proceedings related to wireless service oversight. As a result of these efforts, FCC has provided assurance that it has taken steps to further delineate federal and state authority to oversee wireless phone service and has continued to coordinate and communicate with state-level agencies about this issue.
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| Federal Communications Commission | To better ensure a systemwide focus in providing oversight of wireless phone service and improve FCC's partnership with state agencies that also oversee this service, the Chairman of the Federal Communications Commission should direct the commission to develop and implement policies and procedures for communicating with states about wireless phone service oversight. |
In 2009, we surveyed state utility commissions about their efforts to oversee wireless phone service and found that state commissions reported that communication with the Federal Communications Commission (FCC) about wireless phone service oversight was infrequent. Federal law gives FCC responsibility for regulating wireless service competition and protecting consumers from certain harms; however, states also retain some authority under federal law to regulate wireless phone service and many states also process consumer complaints. Lacking such communication between FCC and the states, we concluded that FCC was missing opportunities to partner with state agencies in providing effective oversight and to share information on wireless phone service consumer concerns. We recommended that FCC better ensure a systemwide focus in providing oversight of wireless phone service and improve FCC's partnership with state agencies that also oversee this service by developing and implementing policies and procedures for communicating with states about wireless phone service oversight. In February 2010, FCC stated it planned to use several of its existing methods of communicating with state officials and national organizations to coordinate and improve wireless service oversight. Specifically, FCC intended to include discussion of wireless service oversight in its regular meetings with state agencies and national organizations representing state agencies. In June 2011, FCC stated that it was continuing to hold regular meetings with associations representing state agency officials, including conducting regular webinars, monthly phone conferences, and in-person meetings with state officials that oversee wireless phone service. In subsequent years, FCC continued holding these webinars on a twice-yearly basis. According to FCC, the two most recent webinars to share information with states were held in September 2012 and June 2013. FCC stated that wireless regulation is a topic of these meetings.
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