Mobile Phone Bills and Regulation: A Brief Cost-Benefit Analysis
– by Jason Llorenz
It should come as no surprise to HTTP members that the Hispanic community is adopting wireless technology and mobile broadband at a tremendous rate, with 87 percent of English speaking Hispanic Americans owning a mobile phone, according to the Pew Research Center’s Internet & American Life Project’s Mobile Access 2010 report.
The main reason for this high rate of adoption is the attractive pricing of mobile phone voice and data plans. Mobile phones have become a convenient and cost-effective alternative to maintaining a home phone and internet connection, and mobile broadband continues to enable increasingly active Hispanics to connect to the internet no matter where they are.
However, there are concerns that the cost-effectiveness of the mobile-only option could be diminished by proposed “bill shock” regulations, if the regulations result in price hikes in mobile phone and data plans – effectively driving many Hispanics off-line and serve as a deterrent against signing up for or continuing mobile service.
For a more detailed discussion of the effects of the FCC’s proposed regulations on the Hispanic community, read the reply comments on this matter filed by The Hispanic Institute. For a succinct summary of the issue please read on.
According to The Hispanic Institute, what the FCC would like to do is to provide protections for the estimated one percent of Americans, according to the Nielsen Company, that experience a significant unexpected voice or data overage in a given year. But these protections must be implemented in a way that would not have the effect of raising costs and increasing the bills of mobile consumers – ultimately placing more pressure on the family budgets of already price-sensitive communities for whom cost is a major factor in technology adoption.
In addition to the cost concerns, there may be some detriments to implementing some of the proposed solutions. For example, one of the FCC’s proposals does little to address the problem of bill overages. The FCC’s proposal calls for a “circuit breaker” provision that cuts off phone service when a person’s limit has been exceeded. This provision would have an especially devastating impact on those who are totally reliant on their mobile devices for all forms of communication. There must be a middle ground that maintains service while also holding unexpected costs down.
HTTP echoes the Hispanic Institute in calling for a low cost to families, high benefit proposal that focuses on efforts to educate mobile consumers in using the tools available to them in managing their usage and avoiding unexpected bills. We look forward to working with the FCC on devising strategies to educate and build consumer awareness of the various usage management options available. We believe that this path will do more to prevent unintended overages and empower Hispanics and other communities in a mobile world.