Proposed law would require carriers to sell contract-free phones

We don't usually take much stock in proposed legislation -- Schoolhouse Rock left out the part where lobbyists gut all the good bits -- but we're willing to root for the Wireless Consumer Protection and Community Broadband Empowerment Act, currently on the floor in the House and Senate. The bill, sponsored by Massachusetts Rep. Ed Markey, would require carriers to sell contract-free phones, provide rate plan information in a "clear, plain, and conspicuous manner," disclose any phone subsidies hidden in the plan's price, and offer price-comparable plans with no subsidy or early termination fee. That means you'd finally know exactly how much a plan would bill you every month including taxes and fees, it'd be easier to see how much devices like the iPhone are marked up, and most importantly, it'd be way easier to switch carriers to get better deals. The House Subcommittee on Telecommunications and the Internet, of which Markey is the chairman, held a hearing on the bill this morning with reps from both the wireless industry and consumer groups present, so progress is being made -- we'll see how things go.

[Via CNET]

Read - Markey's statement to open the hearings
Read - Proposed bill [PDF]

[Isaac @ Feb 27th 2008 3:47PM]

This would be so totally rad.

So don't expect it to pass.

[JLTate @ Feb 27th 2008 3:51PM]

Unfortunately, you're probably right. Stupid politicians.

[everrette powell @ Feb 27th 2008 4:28PM]

you mean a logical bill not getting pass? not our government.

[IndiaTech @ Feb 27th 2008 4:51PM]

I am soo expecting a Ted Stevans speech opposing this.

"Last Thrusday my staff went to buy a phone so that they could send me the intertubes. It took them 5 days to sign up.
Is this acceptable. NO!"

[frozenrubber @ Feb 27th 2008 6:47PM]

Honestly, this initiative would also make the government more accountable. This isn't about penalizing companies for their success (anti-free market)...but adding transparency.

Truth in fees and final bills is very important for consumers and it also highlights the amount of money that has been tacked on by state and federal authorities. The monthly charge service charge(s) should be posted as final price, not before taxes and fake regulatory fees. Hell, some companies are a few dollars more expensive than others because of their own inhouse fees (ah, the regulatory recovery fee...).

This doesn't hamstring companies (financially or in sacrificing sales), it just gives consumers better choices and transparency. Put aside partisan and idealogical differences aside, every taxpayer should support a government that gives you choice and transparency.

[Jeebus @ Feb 28th 2008 1:35PM]

So you don't like freedom? Freedom of a company to provide you with a shitty deal, and your freedom to reject that shitty deal? And the competitors' freedom to provide you with a better deal, and your freedom to still reject it as a shitty deal. Or perhaps take the deal because it's a good deal?
Yeah, let's legislate and regulate. Even more. More rules, more power to congress. Less freedom for the competitive forces to work out the best deals.

[Mike @ Feb 27th 2008 3:47PM]

Finally, some good legislation for consumers.

[John B @ Feb 27th 2008 4:16PM]

That's exactly why it won't go anywhere, unless the politicians can figure out a way to make a few million dollars for themselves out of it.

[Sean @ Feb 27th 2008 4:37PM]

Schoolhouse rocks!

[Graham @ Feb 27th 2008 11:51PM]

....despite the fact that it is completely unconstitutional and inhibits the free market. Yes it would be very nice but giving the government control over what a company can and can not charge is setting us up for failure. The government has no authority to set restrictions like that on the company, government mandated prices, plans, and restrictions only inhibit the free market and will end us up just like communist Russia (please no communist Russia jokes!). I like the idea of contractless but the means of getting it is not good.

[mabhatter @ Feb 28th 2008 12:56AM]

this isn't interfering, unless you mean making confusing terms with hidden agendas. My wife got one of those "cheap" plans and by the time all the "fees" and "taxes" are added the price of the plan is close to double. No where up front can you get anybody to identify all the fees, hell, even the sales staff can't answer what half of them are... just that you have to pay them on your first bill. Why shouldn't the Real, what-you-will-pay, monthly cost be advertised up front? Before you sign up.
As far as the non-contract prices, the cell phone companies are under contract to provide service with the federal govt. If they think that certain terms should be "basic" on the federal leased property, then the companies should comply. Again, this is about consumer contract honesty... perhaps the $175 contract fee is reasonable if they are heavily subsidizing my phone, although it's not subject to sales tax or FCC "fees" they are probably making a years worth of profit by trying to trick me into paying it.
The point is that right now, phone companies are playing games with contract terms, constantly shifting and rescheduling them. That's dishonest, and hard for the government to enforce.... you know when they send the collections agency to GET those fees people didn't know about... the cell companies have made it the Govt's problem... they are fixing it.

[John @ Feb 27th 2008 3:48PM]

Consumer groups: This will make it possible for us to actually get fair deals
Industry reps: We object!

[Aguiluz @ Feb 27th 2008 3:50PM]

Consumers: We will go on strike!

Industry: Yeah, strike yourselves and make your "digital lives" harder. Suckers.

Consumers: Awww Man!

Industry: Hahaha!

[jdeuel @ Feb 27th 2008 4:03PM]

america: built on capitalism and the free market

which means don't like it don't buy it, not punish companies for their success

[phanbouy @ Feb 27th 2008 4:07PM]

jduel, go back to being a caricature on south park will ya?

[Brian @ Feb 27th 2008 7:59PM]

Now that people have icons next to their names, I'm never sure if jabs are aimed to icons (or past icons) or if I'm just missing the joke. Sigh.

[Aguiluz @ Feb 27th 2008 3:48PM]

Yeah! Now I (and we) want that! Now I don't need to go back to the Philippines to get a contract free, unlocked phone. I am waiting for an unlocked PSPhone and my dad wants an unlocked iPhone.

[Curtis the Claw Game Master V2 @ Feb 27th 2008 4:19PM]

Have fun waiting for that PSPhone.

[Jesse S @ Feb 27th 2008 3:51PM]

I don't get it. Verizon sells phones without a contract, but you get no subsidiary. You get a small one with a one-year, and a larger one with a 2-year. The only undisclosed fees I have are pretty much just taxes. Aren't other carriers like this?

I don't get the point of this bill...

[Michael @ Feb 27th 2008 3:59PM]

That's what I thought too. Can't you get a contract-less phone if you cough up the $200-$500 sticker price of a phone?

[kjb434 @ Feb 27th 2008 6:30PM]

Unless the law would force subsidized phones to be sold without a contract. That would be a horrible law then.

[g00n @ Feb 27th 2008 3:52PM]

Bout time...

The dark days of tyranny are numbered.

Make your time, cell providers!

[Jason @ Feb 27th 2008 3:53PM]

I just want people to start realizing how valuable that 1, 2 or 3 year contract is. In Canada Fido offers you $25 credit for signing on for 2 years, when it's really worth hundreds of dollars.

It's the new usury.

[apeguero @ Feb 27th 2008 3:55PM]

I thought Ed Markey was no longer a Congressman. Didn't he leave the House to be president of UMASS Lowell or something?

[Kaemon @ Feb 27th 2008 3:58PM]

I'm prepared for some bad responses... but...

Screw you government! Get out of this, this isn't your place to be. You should not be messing in this business. If they wanna do contracts then its THEIR RIGHT to do so. You have no right to go in and FORCE them to sell things a certain way. When the government controls how businesses do things everything gets worse.

I'd rather stick with contracts that suck then have them be FORCED by the government to do it.

[Tim Ficke @ Feb 27th 2008 4:01PM]

You sound like you work for a cell phone company

[Mike @ Feb 27th 2008 4:01PM]

Of course the government has the right to do that. Saying that they don't is the second silliest thing I've ever heard.

[Kaemon @ Feb 27th 2008 4:04PM]

Nope. I don't have a job. Don't own a cell phone anymore... and, yeah, I don't work for them.

"Of course the government has the right to do that. Saying that they don't is the second silliest thing I've ever heard."

Are you stupid? Your the same type of person who thinks the government should pay for your healthcare, or your food. Or your house. And while your at it, make banks give you loans when you obviously can't handle them.
Government needs to stay out of the cell phone business. They can only screw things up.

[looseinthedeuce @ Feb 27th 2008 4:08PM]

Bad responses? How about enlightened ones?

The government steps in when big companies start pulling the wool over people's eyes, trying to create a greater good. Things become better for most people at the cost of CEOs paychecks. Of course, I think you can pay a crap load of money for a phone and not be obligated to a contract, so I'm not sure what they're trying to accomplish.

So yeah, you can complain about this particular topic, but you sound like a jackass when you rant.

[Kaemon @ Feb 27th 2008 4:10PM]

I really don't see whats wrong with the cell phone thing currently, didn't cause me problems when I was doing it. Your signing up for a service, if you don't want to go along with their conditions, well you can just go somewhere else. There are places that have contract free ones already.

[phanbouy @ Feb 27th 2008 4:15PM]

Kaemon's logic:

I'm satisfied with current choices ergo Cell Phone Oligopoly can and should do whatever they want without consumer protection or regulation like every other competition-deprived industry. QED.

[Kaemon @ Feb 27th 2008 4:26PM]

Phanbouy logic:

I actually ignore the truth and think that all big companies are out to get us and are evil. They need to be regulated by the government!

[phanbouy @ Feb 27th 2008 4:36PM]

I'll bet you think Standard Oil was a great idea, and Microsoft have never done anything wrong? But way to put words in my mouth, tool. You're a sad little power worshiper.

[wickedpheonix @ Feb 27th 2008 4:37PM]

I think that you're an asshole BUT:

We all (at least most of us) agree that the government should not be regulating a lot of areas that are tech-related - from video game law and media headaches to dumb municipalities not allowing superior ISP's to come in (like Verizon FiOS) to "regulation" of the airwaves. But, if we think that the government has no place in our industry, then that means that we also have to accept things like contracts and the like - we can't have it both ways, and quite frankly, I would rather have FiOS than contract-less iPhones.

[looseinthedeuce @ Feb 27th 2008 4:39PM]

Joe America (read: jobless Kaemon) doesn't want the "big bad government" to take his money, so he believes the government shouldn't take a large company's money, after all, they "earned" it. He elects officals that let him keep his money but also lets the large companies keep theirs. In the end, Joe America is far worse off because he's now over-paying on everything he buys. Poor Kaemon...I mean Joe.

[Gary Combs @ Feb 27th 2008 5:04PM]

Kaemon, props. Government shouldn't involve itself when there are already free market solutions.

[William @ Feb 27th 2008 5:17PM]

If the government shouldn't regulate the cell phone companies does that mean that they shouldn't have ever started regulating the meatpacking companies as well? After all it's their "right" to treat workers horribly, advertise falsely and sell disgusting and unsanitary products.

Also if any municipalities prevented fiber-optic internet it's only because current inferior isps lobbied them in order to eliminate competitors. Their's a great nova on the subject, you should watch it.

If corporations have the benefits of being legal "persons" they need to have the responsibility as well.

[Kaemon @ Feb 27th 2008 5:40PM]

looseinthedeuce, "Joe America (read: jobless Kaemon) doesn't want the "big bad government" to take his money, so he believes the government shouldn't take a large company's money, after all, they "earned" it. He elects officals that let him keep his money but also lets the large companies keep theirs. In the end, Joe America is far worse off because he's now over-paying on everything he buys. Poor Kaemon...I mean Joe."

Hmm, actually yes. You are almost correct, I don't want the government (Though they aren't big or bad) to take what I earn, and I think that companies should be able to have what they earn as well.

But as for worse off? Hardly.

Oh, and Jobless, yeah, I'm jobless at the moment. But thats because I'm working on a International Business and Japanese degree, so I'm focusing on that. I have enough money saved at the moment in order to be able to focus on school.

William, Yes, the US regulates meat and stuff... but whats the difference:

Bad Cell phone service: You can't make a call
Bad Meat: People die.

Theres a difference. No one is gonna die without their own cellphone, bad meat will kill you.

[phanbouy @ Feb 27th 2008 6:44PM]

So anti-collusion law only applies to things that can directly kill you? Wow, move over Nilay! Engadget's got a new lawyer!

[MBN @ Feb 27th 2008 7:13PM]

Gotta back you up on this Kaemon. I'm for limited government regulation in general. Of course there are appropriate times when the government should get involved, but this isn't one of them. The market's got this handled. There are plenty of non-contract choices available.

A lot of these comments scare me about where our country is headed. Letting companies keep the money they "earned"? Of course they earned it. Companies are made up of people, of us! When companies earn more money, the people they employ earn more money. Shareholders earn more money. It's not us vs. them. We are in this together. Everyone can participate weather you're one of the employees, or one of the owners (read stockholders).

[Kaemon @ Feb 27th 2008 7:33PM]

MBN, finally someone who agrees with me. Yes. This isn't something that needs to be regulated by the government.
And it is so hilarious how people can't realize that People are what make up a company.

[dBs @ Feb 27th 2008 7:45PM]

Kaemon is correct...but then Im just an evil republican =P

[Dave @ Feb 27th 2008 8:15PM]

Have you ever heard the statement, "Give them inch and they'll take a mile?"
That is why we need government regulation of corporations.
If you had it your way Kaemon, you'd still be breathing asbestos and eating people sausage. (read The Jungle)
Yes, corporations are made up of people, and 'people' will try to screw you over every time.

[NeedOne @ Feb 27th 2008 11:09PM]

So I bet when Big Brother government wants to regulate content on the Web you all will be for it?

Government can barely deliver my mail properly and collect my trash let alone regulate/run businesses.

[Derbeste @ Feb 28th 2008 12:53PM]

I will also back up Kaemon.

If the free market is not mandating these changes, it's OUR fault.

The government should not have to get involved. There are too many laws and regulations as it is.

The free market is in someways more important than government. because, unlike government, in a free market your vote actually matters to someone.

[Kaemon @ Feb 28th 2008 1:13PM]

"Have you ever heard the statement, "Give them inch and they'll take a mile?"
That is why we need government regulation of corporations."

I like how you say something so... compleatly foolish.

Give them a inch and they'll take a mile? Leaving the company to CONTINUE doing something perfectly fine isn't giving them a inch. Letting the government take control over a business IS.

Huh, what was it called again, where the government controls business... oh yeah.

Socialism.

[Tim Ficke @ Feb 27th 2008 4:00PM]

So what about all of us who already have cell phone plans? Would we get to cancel our contracts early without a fine too? Or do we get screwed and still have to wait?

[Jimmy Jones @ Feb 27th 2008 4:05PM]

tell me about this ....i just clocked 1 yr on my 2yr contract w/Sir T.Mob. Another yr to go with the tt---mobbing... of my contract woes.

[Brian @ Feb 27th 2008 4:06PM]

Yeah I don't understand this either. You can buy phones without a contract anytime you want. How stupid do you have to be to not understand that the $29.99 phone on a 2 year contract actually costs $249.99 without a contract? And, if anyone actually took the time to read the cellular trade journals, you would realize that startup costs for new accounts are as high as $300 for any carrier. So what, you need new laws to get what? New service without a contract but with a $250 activation fee? Yeah I can see people lining up for that deal. Morons.

[Pip @ Feb 27th 2008 4:17PM]

I think this is in response to the iPhone, and other big name phones. You cannot buy a contract free iPhone, to activate it, it REQUIRES you to purchase a 2 year contract at 60/mo. You can obviously hack it, but this law will make it so if someone really wants the latest and greatest, they can go buy the iPhone and just use whatever contract they want: An expensive $60/mo contract, a cheap pre-paid contract that only costs $10 every three months, or something else.

The governments job is to govern! The entire idea of a "free market" being 100% free is absurd, because you end up with this silly stuff to begin with. Every company is governed by hundreds of thousands of laws, this one will be no different. If you're that against it, you can take your own advice and just live somewhere else? Right? See how silly that sounds? Good.