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CTIA, FCC agree on 'bill shock' plan

Wireless subscribers should not be shocked if they start receiving text or voicemail alerts telling them when they're about to hit their monthly limits on voice, data and SMS.

That's because the FCC and the CTIA Wireless Association have reached an agreement where CTIA member carriers will send out free alerts to subscribers who are about to exceed their monthly service limits and incur overage charges on their accounts. In addition to sending alerts for users about to incur overage charges, the carriers will also issue alerts to users when they are about to incur international roaming charges. The policies are designed to help users avoid "bill shock," a term used by the FCC last year to describe large, unexpected overage charges that appear on users' wireless bills.

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FCC Chairman Julius Genachowski, appearing at a joint press conference Monday with CTIA President Steve Largent, said that carriers would offer the alerts automatically and consumers would not be required to opt in to start receiving wireless usage notes. He also said that the FCC would soon launch a Web portal in tandem with the Consumers Union advocacy organization to help users learn what kinds of alerts are offered by different carriers and to track whether carriers are complying with their own standards and policies.

While carriers such as Sprint and AT&T have already developed their own alert systems to warn consumers of additional charges, the deal with CTIA will not only bring more carriers into the fold but will provide a uniform way for consumers to understand their carriers' system for setting up alerts. And as Consumers Union policy counsel Parul P. Desai noted today, some carriers had been charging their customers to receive alert notices before the FCC-CTIA deal, meaning that the agreement to provide free alerts will save some wireless subscribers additional money every month.

The FCC has been working on ways to help consumers avoid bill shock for the past year. The FCC commissioned a survey last year showing that 17% of U.S. cellphone users said their cellphone bills had "increased suddenly from one month to the next" even if they "did not change the calling or texting plan" they subscribed to. The survey also found that carriers didn't do a good job of contacting people when they were about to hit their monthly limits on voice or data, as only 14% of users hit with bill shock said that their carrier tried to contact them when they were about to exceed their monthly voice, SMS or data usage, while only 10% of users said their carrier contacted them after their bill suddenly increased.

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