By Jared Newman | Tuesday, March 8, 2011 at 12:40 pm
Call me crazy, but I almost believed a study on “bill shock” that landed in my inbox today, despite being commissioned by the Wireless Communications Association International trade group.
Bill shock refers to the high charges that occur when you use more cell phone minutes than your plan allows. According to the study, conducted by Recon Analytics and based on a Nielsen Company survey, only 0.3 percent of U.S. wireless customers would be better off moving to a bigger bundle of minutes — totaling $120 or $240 per year depending on carrier — instead of paying occasional overage charges.
I agree that most people who pay an occasional overage are better off that way, but here’s where things get silly: The study concludes that because overage charges are beneficial to most people, the FCC shouldn’t enact safeguards against bill shock, such as notifying customers when they’re about to exceed their monthly limit of minutes. If you read the actual study, this is a logical leap based on conjecture.
The study says that customers who typically exceed their allotment of minutes do so of their own volition:
“For accounts that repeatedly go into overage, it is reasonable to infer that it is a matter of consumer choice. These customers are either indifferent to overages or are making the deliberate decision to incur overages because it is the most cost-efficient solution for their usage patterns.”
Well, no. There’s also the possibility that the consumer would like to curtail usage but lacks the appropriate tools, such as a text message notification when minutes are running out. After all, the average customer who pays a 45-cent per minute overage every month has only talked for 55 minutes beyond his or her monthly limit (based on a $24.80 median monthly charge). That could be a single conversation, so is the study assuming that customers are cognizant of their remaining minutes every time the phone rings?
In any case, this argument distracts from the main issue, that some people are shocked to see overage charges of $100 or more on their monthly bills. The study tries to explain this away by saying it’s a rare occurrence, and that carriers will often credit customers back when the charges are excessive, but the study offers no clear argument for why notifying customers of overages is an outright bad idea.
Instead, it concludes with this vague premonition:
“It would be an unfortunate unintended consequence if FCC policy actually reduced the amount of consumer choice and flexibility in rate plans and overage notifications by prescribing a one-size fits all approach”
Consequence for whom? Unfortunately, the study doesn’t spell out how bill shock safeguards would hurt customers or take away their choices. It only falls back on the argument that most customers already make smart decisions, and therefore don’t need any additional assistance. That’s a weak argument to begin with — more knowledge is always better — and one that I hope the FCC doesn’t spend much time entertaining.