BERLIN — Most mobile operators no longer sell unlimited wireless Internet to consumers, instead marketing plans that link download limits and surfing speeds to price. But while operators have abandoned unlimited offers, which were costing them money, many are still using the marketing language of “all you can eat” and “flat rate.”
The result has been an increase in consumer bill shock in Europe and the United States, according to industry experts, as consumers conditioned to unlimited calling, texting and Internet adjust to the new reality. Bill shock has plagued the mobile industry since its inception, mostly because the terms for services like roaming were opaque and poorly understood.
But now, some consumers are getting big bills even when they don’t leave the country, by exceeding limits on voice, texting or Internet data on their new plans.
“Operators are moving from all-you-can-eat tariff plans, and subscribers don’t understand this,” said Doug Suriano, the chief technology officer at Tekelec, a company in Morrisville, North Carolina, that makes billing software used by 300 operators. “They have not been used to paying attention to limits.”
Bill shock has returned with a vengeance in America and Britain, where a spate of complaints has raised the call for operators to better warn consumers about the limits of new plans. A 2010 study by the U.S. Federal Communications Commission found that one in six Americans had experienced bill shock, and in 23 percent of those cases, the bills were more than $100.
In the United States, mobile operators agreed in October to begin a series of automatic warnings next year, which will probably be text messages, when customers approach the limits of voice, text, Internet and roaming packages. The F.C.C. extracted the agreement, which is voluntary, only after threatening operators with binding rules.
In Europe, consumers may know the number of megabytes or gigabytes in their data plans, but they have no intuitive sense of how much they are consuming, said John Phelan, a spokesman for the European Consumers’ Organization, an advocacy group in Brussels.
“Data download rates are like a secret arithmetic to most consumers,” Mr. Phelan said.
In Britain, the communications ombudsman, a quasi-public agency that arbitrates consumer telecommunication complaints, criticized wireless operators in November for continuing to advertise “unlimited” plans that did not adequately spell out their limits and the costs of overruns.
The U.K. Advertising Standards Authority, a government oversight panel, ruled this year that operators could continue using the term “unlimited” in advertising as long as consumers were warned in fine print that “unlimited,” in effect, was not unlimited. The ombudsman’s office, in Warrington, England, has received many complaints about confusing plans, said the chief ombudsman, Lewis Shand Smith.
“We felt we ought to speak out,” Mr. Shand Smith said during an interview. “It would be simpler to bar companies from using this deceptive marketing language, but the advertising standards authority has authorized this practice as legal.”
If operators don’t eliminate confusing tariff language, Mr. Shand Smith said, the British telecommunications regulator, Ofcom, might step in and require operators to send out text warnings to consumers who were approaching the limits of their domestic voice, text and data plans. Since 2009, operators in the 27-nation European Union have been required to warn customers when they near the limits of mobile roaming packages. In 2009, a new E.U. law limited maximum monthly roaming charges to €50, or $67. But there are still no national requirements on E.U. operators to alert customers who are nearing the limits of domestic voice and data plans, where roaming is not an issue.
“Ofcom is definitely looking at this,” Mr. Shand Smith said. A spokeswoman for Ofcom said the agency planned to make recommendations at the end of January. She declined to say whether one of the options being considered was a domestic warning rule for consumers.
A system of domestic warnings in Britain on voice, text and Internet is long overdue, said Jon Barrow, a principal researcher at Which?, a London consumer reporting magazine and Web site that has lobbied Ofcom for better notifications. In Britain, banks routinely call customers when they observe unusually high spending activity on an account, Mr. Barrow said. But with most mobile carriers, he said, if you go over a limit, there is no warning, just a big bill.
Britons are better protected from bill shock when they leave Britain and travel in the rest of the European Union, where laws on roaming are in effect. Since 2007, the Union has enforced retail price caps on voice and text roaming, and a wholesale cap on data roaming charges.
But the risk of roaming bill shock is still great for non-E.U. citizens, especially Americans and Canadians, and for E.U. residents traveling outside the European Union, according to a study released in May by the Organization for Economic Cooperation and Development in Paris.
The O.E.C.D. ranked roaming costs by nation of consumer, adjusting for national differences in earning and cost of living. The result is that consumers from the United States, Canada, Israel, Japan, Chile and Mexico paid the highest roaming charges when abroad, with prices ranging from $14 to $25 for each megabyte of data downloaded. Residents of Greece, Iceland, Luxembourg, Finland and Norway paid the lowest charges, roughly $5 per downloaded megabyte.
“These prices are still a multiple of what people pay domestically for data downloads and we see no reason why they should be so high,” said Agustín Díaz-Pinés, a policy analyst at the O.E.C.D. in Paris. “Bill shock is still a big issue for most people traveling abroad.”
Article source: http://www.nytimes.com/2011/12/12/technology/12iht-rawdata12.html?partner=rss&emc=rss
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