4G Disclosure Law Introduced in Congress

Rep. Anna G. Eshoo (D-Palo Alto), the top Democrat on the U.S. House of Representatives' Energy and Commerce Subcommittee on Communications and Technology, detailed on her website her introduction of the Next Generation Wireless Disclosure Act.

4G is “hot.” U.S. mobile services providers are racing to quench the thirst for speed to enable the exploding population of smartphones, tablets and other devices to have improved user experiences. Fortunately or unfortunately, providers are going their separate ways on upgrading or overlaying their networks to provide 4G services – LTE (Long Term Evolution), WiMAX (Worldwide Interoperability for Microwave Access),or HSPA+ (Evolved High Speed Packet Access). The result is that confusion reigns as to what consumers are actually purchasing when they subscribe to a 4G package. 

“Consumers need to know the truth about the speeds they're actually getting,” Eshoo's announcement explains. “My legislation is simple – it will establish guidelines for understanding what 4G speed really is, and ensure that consumers have all the information they need to make an informed decision.”

Better Disclosure

It remains to be seen if educated consumers, armed with knowledge about the speeds and feeds of various 4G services, will increase carrier customer churn rates. After all, on any given 4G network the actual user experience is a function not just of the inherent capabilities of the technology but also where, when and at what time the customer is actively engaged. However, as has been pointed out, just as with the average miles per gallon stickers on automobiles, a little bit of knowledge could go a long way in helping consumers make the best decision for their needs. It could also proactively cut down a tsunami of complaints about misleading advertising.

Eshoo's Next Generation Wireless Disclosure Act would require sellers of “advanced mobile broadband service directly to a consumer” to disclose the following details about their plans at the point of sale:

• Guaranteed minimum data speed – defined as IP packets to and from on-network hosts and expressed in megabits per second. The minimum would not be defined as “guaranteed” unless it is available “for a percentage of the time in a calendar month,” as determined by the FCC.

• Network reliability rating – based on “data session start success percentage (network accessibility)” and the “data session completion success percentage (network retainability)” of a carrier’s plan.

• Coverage area maps – intended so consumers in essence know before they go.

• Pricing – all charges be stated in clear terms (including those not cited as part of the price) based on whether they are based on volume or time (particularly detailing any time limitations).

• Technology used to provide 4G service – self-explanatory.

The specific language in the bill is interesting. For instance, carriers would be required to disclose “any business practices or technical mechanisms employed by the service provider, other than standard best-effort delivery, that allocate capacity or prioritize traffic differently on the basis of the source of the applications, content, or services.” It goes on that this would include “any limits or prohibition” on the use of various applications or services, and any “traffic shaping or throttling mechanisms that affect the service as a result of exceeding certain usage limits”.

Other provisions in the bill relate to: dealing with pre-paid services; the treatment of resellers; and instructions to the FCC giving it 180 days to publish provisions and standards and one year to complete a study evaluating advanced wireless broadband speeds in the US as provided by the ten biggest carriers.

Reaction from various quarters was predictable. Parul Desai of the Consumers Union, which publishes Consumer Reports, is quoted on the Congresswoman’s website as saying, “the Eshoo bill will help people cut through the clutter so we can compare prices and options, and we can better understand what really constitutes 4G data service…right now, there aren't a lot of consumer protections for mobile broadband customers.” Other favorable comments from consumer groups were also cited.

CTIA - The Wireless Association took a more cautionary stance, stating in a press release that, “we are concerned that the bill proposes to add a new layer of regulation to a new and exciting set of services…while ignoring the fact that wireless is an inherently complex and dynamic environment in which network speeds can vary depending on a wide variety of factors.”

The Next Generation Wireless Disclosure Act has been referred to the House Energy and Commerce Committee with its prospects of passage in this session in doubt. It thus is problematic as to whether in the 4G market the famous tag line of New York City area clothier Syms that “An Educated Consumer is our Best Customer,” will hold true.

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