S 2033
110th CONGRESS
1st Session
S. 2033
To provide for greater disclosure to, and empowerment of, consumers
who have entered into a contract for cellular telephone service.
IN THE SENATE OF THE UNITED STATES
September 7, 2007
Ms. KLOBUCHAR (for herself and Mr. ROCKEFELLER) introduced the following
bill; which was read twice and referred to the Committee on Commerce, Science,
and Transportation
A BILL
To provide for greater disclosure to, and empowerment of, consumers
who have entered into a contract for cellular telephone service.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `Cell Phone Consumer Empowerment Act of 2007'.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Some current wireless telephone contracts do not clearly and uniformly
disclose to the customer the relevant terms and conditions, including
charges, minutes, service plans, and taxes and surcharges.
(2) Some current wireless telephone bills are not clearly organized, do
not clearly describe in plain language the products and services for which
charges are imposed, and contain separate, line-item fees that--
(A) are not included in the advertised price of wireless services;
(B) fail to adequately inform consumers of the specific costs being
recovered; and
(C) fail to indicate whether such charges are required by government
law or rule, or alternatively, are imposed at the discretion of the
carrier.
(3) The current lack of clarity and uniformity in wireless telephone contracts
and bills can lead to consumer confusion and can impede the delivery of
basic information necessary for consumers to compare the cost of wireless
services offered by different carriers.
(4) Competitive markets function properly only when consumers have access
to accurate, meaningful information in a format that they readily understand.
(5) Wireless companies often charge early termination fees of $175 or
more whenever a customer ends his or her service before the expiration
of the contract. In many instances, the same fee is charged regardless
of whether the contract is terminated a day or a year after it is signed
so long as the contract period has not expired.
(6) The term of the contract is often extended whenever a customer makes
a change in the service, so an early termination fee may apply years after
a customer first subscribed to a company's service.
(7) Early termination fees imposed in this way, do not bear a strong relationship
to legitimate business practices such as recovery of the cost of a wireless
device.
(8) Customers very often are unaware that their contracts can be, and
in fact are--
(A) extended based on changes, often minor changes, to their service;
and
(B) modified in materially adverse ways.
(9) In some instances, wireless providers do not make available service
maps with sufficient levels of granularity for customers, especially customers
in rural areas, to know with any confidence whether and where they will
have wireless telephone service.
(10) Wireless customers do not have ready access to information on the
service quality of wireless providers, including dropped calls, coverage
gaps, and signal strength.
(11) Customers very often learn that the service quality and coverage
of their wireless device is insufficient only after they have signed a
2-year contract and have begun using the device.
SEC. 3. DEFINITIONS.
In this Act, the following definitions shall apply:
(1) COMMISSION- The term `Commission' means the Federal Communications
Commission.
(2) TELECOMMUNICATIONS CARRIER- The term `telecommunications carrier'
has the meaning given that term by section 3(44) of the Communications
Act of 1934 (47 U.S.C. 153(44)).
(3) TELECOMMUNICATIONS SERVICE- The term `telecommunications service'
has the meaning given that term by section 3(46) of the Communications
Act of 1934 (47 U.S.C. 153(46)).
(4) WIRELESS TELEPHONE SERVICES- The term `wireless telephone services'
has the same meaning given the term `commercial mobile radio services'
as such term is defined in section 332(c) of the Communications Act of
1934 (47 U.S.C. 332(c)).
(5) WIRELESS TELEPHONE SERVICE PROVIDER- The term `wireless telephone
service provider' means any entity that provides wireless telephone service.
SEC. 4. DISCLOSURE REQUIREMENTS FOR PLANS AND CONTRACTS FOR WIRELESS TELEPHONE
SERVICE.
(a) Disclosure Requirements- Not later than 180 days after the date of enactment
of this Act, the Commission shall promulgate regulations requiring that
any publication, including publication on the Internet, of the terms of
a plan or contract for wireless telephone service of a wireless telephone
service provider shall set forth, in a plain and conspicuous manner, the
following information:
(1) CONTRACT TERMS- Information on plan and contract terms, including
the length of such contract, early or other termination fees, the length
of any trial period, and start-up fees.
(2) CHARGES- Information on charges, including calling-from area, monthly
base charge, per-minute charges for minutes not included in the plan,
and the method of calculating minutes charged.
(3) MINUTES- Information on minutes included in the plan, including weekday/daytime
minutes, nights/weekend minutes, and any other different method by which
a subscriber is charged a fee, such as for long distance-calls, roaming
calls, incoming calls, and directory assistance calls.
(4) TAXES AND SURCHARGES-
(A) TAXES- Information on taxes to be collected by the provider for,
and paid to, a State, local, or other governmental agency.
(B) SURCHARGES- Information on surcharges imposed by the provider for
the costs of compliance with regulations or for any other purposes.
(5) E-911- A statement notifying the customer that the service includes
basic wireless 911 service.
(6) OTHER INFORMATION- Any other information that the Commission considers
appropriate to ensure that wireless consumers are fully informed of the
terms of the plan or contract.
(b) Information Required To Be Given to Any Purchaser- Each wireless telephone
service provider shall provide the information required under subsection
(a) to a consumer prior to entering into any contract with that consumer
for wireless telephone service.
(c) Format- The Commission shall complete a rulemaking requiring that the
information required by subsection (a) be published by wireless service
providers in a tabular format, in a clear and uniform manner.
(d) Advertising- A wireless telephone service provider shall, to the extent
possible allowed by the advertising medium chosen by such provider, satisfy
the requirements of this section in any advertisement related to a plan
or contract for wireless telephone service.
SEC. 5. CONTRACT BILLING.
(a) Organization of Bills- A wireless telephone service provider shall provide
that each bill sent to a subscriber for wireless telephone service is clearly
organized, clearly describes in plain language the products and services
for which charges are imposed, and conforms to such format standards as
are established by the Commission.
(b) Taxes and Other Fees-
(1) IN GENERAL- Taxes and fees which are required by a Federal, State,
or local statute or regulation to be collected from a subscriber shall
be set forth in a separate section of each bill sent to a subscriber,
and itemized separately.
(2) LIMITATION- No charge which is not required to be recovered from a
subscriber under a Federal, State, or local statute or regulation may
be included in the section of the bill described in paragraph (1).
(c) Roaming Charges- Roaming or off-network charges associated with any
call placed by a subscriber shall be itemized on each bill sent to such
subscriber not later than 60 days after such call was placed and shall identify
the date and originating location of such call.
(d) Itemized Bills- Upon request of a subscriber, a wireless telephone service
provider shall provide an itemized bill to such subscriber at no cost to
such subscriber.
(e) Rulemaking- Not later than 180 days after the date of enactment of this
Act, the Commission shall promulgate regulations implementing the provisions
of this section.
(f) Truth-in-Telephone Billing Regulations- Except as otherwise provided
in this Act, not later than 180 days after the date of enactment of this
Act, the Commission shall initiate and conclude a proceeding under the Communications
Act of 1934 to prevent a telecommunications carrier from listing any charge
or fee on the billing statement of a subscriber as a separately stated charge
or fee other than a charge or fee--
(1) for telecommunications service or other services provider to a subscriber;
(2) for nonpayment, early termination of service, or other lawful penalty;
(3) for Federal, State, or local sales or excise taxes; or
(4) expressly authorized by a Federal, State, or local statute, regulation,
or rule to appear on a subscriber's billing statement as a separately
stated charge or fee.
SEC. 6. PROVISION OF INFORMATION ON WIRELESS TELEPHONE SERVICE COVERAGE
AND QUALITY TO CONSUMERS.
(1) IN GENERAL- Each wireless telephone service provider shall make available
a map showing the wireless telephone service area of such provider and
the wireless telephone service area of such provider within each State.
(2) GRANULARITY- Each map required under paragraph (1) shall be prepared
to reflect the county level of wireless telephone service, shall be updated
quarterly, and shall be in sufficient detail to--
(A) identify all geographic areas within such county larger than a number
of square miles to be determined by the Commission where wireless telephone
service is not regularly available; and
(B) identify whether or not a consumer shall be able to receive wireless
telephone service where the consumer's primary residence is located.
(3) TIMES OF PROVISION- A map of the service area of a wireless telephone
service shall be provided to a consumer--
(A) upon request of the consumer;
(B) whenever a plan or contract for the service is entered into; and
(C) at such other times as the Commission shall provide.
(4) ELECTRONIC AVAILABILITY- Each map of a service area under paragraph
(1) shall be available--
(A) on the Internet website of the provider concerned; and
(B) on the Internet website of the Commission.
(1) MONITORING- The Commission shall monitor the quality of wireless telephone
service provided in the United States by requiring semiannual reports
of wireless service providers on the following:
(A) Dropped calls within geographic areas to be determined by the Commission.
(B) Known coverage gaps (including average signal strength) or dead
zones within geographic areas to be determined by the Commission.
(C) Any other matters the Commission considers appropriate.
(2) PUBLIC COMMENTS- The Commission shall establish an Internet website
at which members of the public can submit to the Commission their comments
and views on the quality of service of any wireless telephone service
provider.
(3) PUBLICATION- The Commission shall make available to wireless telephone
service providers and to the public on a semiannual basis the information
received under this section on the quality of wireless telephone service.
(c) Regulations- Not later than 180 days after the date of enactment of
this Act, the Commission shall promulgate regulations implementing the provisions
of this section.
SEC. 7. EARLY TERMINATION FEES.
(a) Requirements- Not later than 180 days after the date of enactment of
this Act, the Commission shall promulgate regulations requiring that early
termination fees be prorated over the term of a wireless subscriber's contract,
in a manner that reasonably links the fee to recovery of the cost of the
device or other legitimate business expenses.
(1) MINIMUM- The Commission shall have appropriate discretion to implement
the terms of this section, but at a minimum the early termination fee
for a 2-year contract should be reduced by 1/2 after 1 year.
(2) CONSIDERATIONS- In conducting this rulemaking, the Commission should
consider, among other things, the effect of early termination fees on
competition and on the ability of consumers to choose their wireless provider,
as well as the legitimate business reasons for early termination fees.
SEC. 8. CONTRACT EXTENSION, MODIFICATION, OR RESCISSION.
(a) Validity of Extensions-
(1) IN GENERAL- An extension of a contract for wireless telephone service
shall not be valid unless--
(A) the wireless telephone service provider provides point-of-sale notice
of the extension to the subscriber; and
(B) the subscriber may cancel the extension for any reason within 30
days after the notice required by subparagraph (A) is provided.
(2) NO CANCELLATION PENALTY- If a subscriber cancels the extension of
a contract for wireless telephone service within the 30-day period provided
by paragraph (1)(B) the wireless telephone service provider may not impose
a penalty or other cost for the cancellation on the subscriber. A charge
for wireless telephone service provided to the subscriber during the extension
period before cancellation shall not be considered to be a penalty or
cost of cancellation for purposes of this paragraph.
(b) Notice of Any Modifications-
(1) IN GENERAL- A wireless telephone service provider shall provide subscribers
with written notice of any change in rates, terms, or conditions of service
at least 30 days before such change is to take effect.
(2) RIGHT TO TERMINATE FOR MATERIAL ADVERSE CHANGES- If any change in
rates, terms, or conditions of service will result in higher rates or
more restrictions on service or otherwise will result in a material, adverse
change for a subscriber, such subscriber may, not later than the day such
change is to take effect, terminate the service without penalty and receive
a pro rata refund of the charges, if any, paid for the handset used for
such service.
(3) REQUIRED CONTENT OF NOTICE- The notice of change required under paragraph
(1) shall inform a subscriber of--
(A) the right of that subscriber to terminate the service and to a handset
refund; and
(B) the steps necessary to implement such a termination.
(1) IN GENERAL- A contract for wireless service may be canceled upon the
request of a subscriber for any reason up to 30 days after the date on
which the contract was executed.
(2) NO PENALTY- If a subscriber exercises the right of rescission under
paragraph (1), there shall be no penalty or other costs to such subscriber
for such rescission, except that such subscriber shall be responsible
for the cost of the wireless service used during the time period the contract
was in effect.
(3) HANDSET- On the return of any handset purchased or leased in connection
with the purchase of wireless service, a subscriber may receive a pro-rated
refund of any amount paid for the handset.
SEC. 9. REPORT ON HANDSET LOCKING AND PORTABILITY.
(a) Report- Not later than 180 days after the date of enactment of this
Act, the Commission shall submit a report to Congress that analyzes--
(1) the practice in the United States of handset locking;
(2) the practice of handset portability in European and Asian markets;
(3) the effects on competition and the effect of consumer behavior, of
the practices described in (1) and (2); and
(4) potential methods of regulating handset locking and portability in
the United States.
SEC. 10. TERMINATION OF CONTRACTS FOR CELLULAR PHONE SERVICES FOR ARMED
FORCES PERSONNEL.
(1) INCLUSION OF CONTRACTS UNDER TERMINATION AUTHORITY- Title III of the
Servicemembers Civil Relief Act (50 U.S.C. App. 531 et seq.) is amended
by adding at the end the following new section:
`SEC. 309. TERMINATION OF CONTRACTS FOR CELLULAR PHONE SERVICE.
`(a) Termination by Servicemember- A servicemember who is a party to a contract
described in subsection (b) may, at the option of such servicemember, terminate
the contract at any time after--
`(1) the date of the entry of that servicemember into military service;
or
`(2) the date of the military orders of the servicemember described in
paragraphs (1) or (2) of subsection (b), as the case may be.
`(b) Covered Contracts- This section applies to any telecommunications contract
for cellular phone service--
`(1) the contract is executed by or on behalf of a person who thereafter
and during the term of the contract enters military service (or receives
an order to enter military service) under a call or order specifying a
period of not less than 90 days (or who enters military service under
a call or order specifying a period of 90 days or less and who, without
a break in service, receives orders extending the period of military service
to a period of not less than 90 days); or
`(2) the person enters into the contract while in military service and
thereafter receives military orders for a permanent change of station
outside of the continental United States, or to deploy with a military
unit for a period of not less than 90 days, to a location that does not
support continuation of the service under the contract.
`(c) Manner of Termination-
`(1) IN GENERAL- Termination of a contract under subsection (a) is made
by delivery by the servicemember of written notice of such termination
to the other party to the contract (or that person's grantee or agent).
`(2) NATURE OF NOTICE- Delivery of notice under paragraph (1) may be accomplished--
`(B) by private business carrier; or
`(C) by placing the written notice in an envelope with sufficient postage
and with return receipt requested, and addressed as designated by the
party to be notified (or that party's grantee or agent), and depositing
the written notice in the United States mails.
`(d) Effective Date of Contract Termination- Termination of the contract
is effective on the day on which the notice is delivered.
`(1) MISDEMEANOR- Any person who knowingly seizes, holds, or detains the
personal effects, security deposit, or other property of a servicemember
(or of a dependent of a servicemember) who lawfully terminates a contract
covered by this section, or who knowingly interferes with the removal
of such property from premises covered by such contract, for the purpose
of subjecting or attempting to subject any of such property to a claim
for contract payments accruing subsequent to the date of termination of
such contract, or attempts to do so, shall be fined as provided in title
18, United States Code, or imprisoned for not more than 1 year, or both.
`(2) PRESERVATION OF OTHER REMEDIES- The remedy and rights provided under
this section are in addition to and do not preclude any remedy for wrongful
conversion otherwise available under law to the person claiming relief
under this section, including any award for consequential or punitive
damages.
`(f) Definitions- In this section, the following definitions shall apply:
`(1) MILITARY ORDERS- The term `military orders', with respect to a servicemember,
means official military orders, or any notification, certification, or
verification from the servicemember's commanding officer, with respect
to the servicemember's current or future military duty status.
`(2) CONUS- The term `continental United States' means the 48 contiguous
States and the District of Columbia.'.
SEC. 11. ENFORCEMENT.
(a) Enforcement by the FCC-
(1) IN GENERAL- The Commission shall have the power and authority to enforce
the provisions of this Act as if such provisions were provisions of the
Communications Act of 1934.
(2) PENALTIES- Penalties authorized by title V of the Communications Act
of 1934 may be imposed under this subsection for a violation of a provision
of this Act.
(b) Enforcement by States-
(1) AUTHORITY- The attorney general of a State, or the public utility
commission of a State if authorized by the laws of the State, may--
(A) bring a civil action on behalf of the residents of the State in
a district court of the United States of appropriate jurisdiction to
enforce the provisions of this Act; or
(B) establish or utilize existing administrative procedures to enforce
the provisions of this Act.
(2) PENALTIES- Penalties authorized by title V of the Communications Act
of 1934 for a violation of a provision of that Act may be imposed in a
civil action under the subsection for a violation of a provision of this
Act.
SEC. 12. PREEMPTION.
This Act preempts the laws of any State to the extent that such laws are
inconsistent with this Act, except that this Act shall not preempt any State
laws that provide additional protection to subscribers of wireless telephone
service.
END
