On May 25, the Federal Communications Commission released the findings of an agency survey on the consumer mobile experience. The survey indicated that 30 million Americans -- or one in six mobile users -- have experienced "bill shock," a sudden increase in their monthly bill that is not caused by a change in service plan. It also shows that nearly half of cell phone users who have plans with early termination fees (ETFs) -- and almost two-thirds of home broadband users with ETFs -- don't know the amount of the fees they're accountable for. The survey notes that 83 percent of adults in this country have a cell phone, and 80 percent have a personal cell phone (i.e., one for which their employer does not pay the bill). 58 percent of cell-phone users say they are very satisfied with the number of places they can get a good signal.
The survey finds that of the 30 million Americans who have experienced bill shock:
- 84 percent said their mobile carrier did not contact them when they were about to exceed their allowed minutes, text messages, or data downloads.
- 88 percent said their carrier did not contact them after their bill suddenly increased.
The amount of bill shock varies widely but is often sizeable. In the survey, more than a third of people who experienced bill shock said their bills jumped by at least $50, and 23 percent said the increase was $100 or more.
The survey also asked consumers about early termination fees for cell phone and broadband service. Of the respondents with personal cell phones, 54 percent said they would have to pay an ETF should they terminate their contracts before the expiration date, and 18 percent didn't know whether they would have to pay or not. Of those who are subject to an ETF, 43 percent said it was $150 or more, but 47 percent didn't know how much it was. One reason for the confusion is billing practices: Only 36 percent of cell phone customers who are familiar with their bills said that they include "very clear" information on ETFs.
The findings were similar for home broadband termination fees, with some differences. Only 21 percent of home broadband users say that their contracts include an early termination fee. Of those consumers, however, fully 64 percent don't know what the fee is -- a higher level of confusion than for cell phone service.
The survey shows that ETFs are one factor that can keep cell phone customers from switching carriers even when their service is not ideal. Forty-three percent of these customers said ETFs were a major reason they would stay with their current service, almost exactly the same number who said they would be deterred from switching by the cost of setting up a new service or by paying a deposit on a new service.