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E-mail Print Too many wireless regulations
ePolicy
1.29.2003



ePolicy

ANYONE who uses wireless phone services will be interested to know that a new move by California officials threatens to raise prices, slow service, quash improvements and increase hassles.

For example, right now a consumer can buy a cell phone in a box at a variety of kiosks and then simply call the wireless provider to have it activated. The new proposal by Carl Wood, one of five members of the California Public Utilities Commission, would change that, making the consumer sign a long paper contract, mail it to the wireless carrier, and wait for the carrier to receive and process the paperwork before the new service can be activated.

Indeed, Wood has proposed a huge raft of regulations commanding every wireless carrier to disclose in excruciating detail every term and legal condition for every service plan offered. This would apply every time the customer contacts the carrier, whether to activate new service, to change to a cheaper rate plan or to add a product such as voice mail. Those who find annoying those radio ads that rattle off legal disclaimers will be horrified by this plan.

In typical bureaucratic form, the proposal contains dozens of complex rules dictating precisely how wireless providers must interact with consumers. It is astounding to see such lack of confidence in the competitive forces of the marketplace. Most people recognize, and indeed act, on the reality that the market will punish companies with poor customer service and reward those that do a good job.

While Wood's proposal may be well-intended, the results would be anti-consumer. The hassle and delay is unnecessary and annoying, a throwback to an age before real-time customer service and Internet speed. Not only that, but wireless companies would be forced to spend untold amounts of money complying with unnecessary rules at a time when the economic slowdown has vaporized the healthy profit margins of the past.

This means higher rates for wireless service and less investment in improving wireless coverage areas and call capacity. And it's worth noting that cell phone companies have consistently worked to offer better services.

Today, wireless phones work better and across a far greater area than when cellular service was first introduced, but there are other benefits too.

A cell phone used to be the size of a brick and the cost to make a five-minute call could surpass the price of movie ticket. Today, phones are small and sleek and weekend service usually free. People from every socioeconomic group possess one of these devices - all without government programs.

One key reason these goods have improved and spread across such a wide swath of society can be explained by competition among providers, but that competition would decrease if more regulations are piled on wireless carriers. It's basic economics: a less-regulated marketplace means greater entry by competitors and more competition means better products for consumers. Currently, six major national carriers compete vigorously against one another, and a host of smaller regional carriers add to that competitive brew. The vast majority of Californians have at least four wireless carriers tripping all over themselves for their business. As with most business transactions, consumers ask questions before signing up with a wireless carrier, and for those who don't, most carriers offer grace periods that allow cancellation of the contract without paying an early termination fee (generally about 14 days, though longer for some carriers).

The PUC should resolve to shelve any plans to further regulate the wireless area. This will ensure that wireless companies keep re-investing to satisfy consumers.


Sonia Arrison is director of the Center for Technology Studies at the California-based Pacific Research Institute . This column originally appeared in the Oakland Tribune (www.oaklandtribune.com). She can be reached at sarrison@pacificresearch.org.

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