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Ask Maggie: Bill shock, iPhone deals, new review feature

This week's Ask Maggie tech advice column helps readers with questions about bill shock, waiting for the Verizon iPhone, and getting audio samples in CNET phone reviews.

Imagine opening your wireless bill and finding a charge for $8,000.

Ask Maggie

That's exactly what happened to one family, who wrote to Ask Maggie for some advice. These victims of "bill shock" are not alone. The Federal Communications Commission said earlier this week that it gets nearly 1,500 complaints every year about outrageous phone bills. To help curb this problem, the FCC this week voted to consider new regulation that would require operators to provide alerts when subscribers are about to go over their voice, text, or data limits.

In this week's Ask Maggie I share some tips for avoiding "bill shock," and I provide information on where people affected by this issue can file their complaints or share their stories.

I also address yet another question about the rumored Verizon iPhone. This time, a reader wants to know if a Verizon iPhone might prompt AT&T to lower its prices or offer other deals to entice new customers.

And finally, I share with readers news of a new feature added to CNET cell phone reviews that lets you actually listen to audio samples to help determine call quality.

Ask Maggie is a weekly advice column that answers readers' wireless and broadband questions. If you've got a question, please send me an e-mail at maggie dot reardon at cbs dot com. And please put "Ask Maggie" in the subject header.

'Bill shock'

Hi, Maggie,
My husband and I bought wireless Internet service from Verizon Wireless. We were offered a package that included data for when we travel to Mexico. But when our daughter went to Mexico and used her computer, we got a bill for $8,000. We immediately called Verizon. But the customer care representative said that data usage in Mexico wasn't included in our plan. I have the paper showing that it was included. We have refused to pay the bill. And now we are in collections. Could you let us know to whom we should file a complaint?

Thank you for your help.

Lupe and Guillermo

Dear Lupe and Guillermo,
Your situation is a classic example of what the Federal Communications Commission is calling "bill shock," a sudden and unexpected increase in monthly bills that is not caused by a change in service plans. Often people don't even realize they are racking up hefty charges until it is too late.

The FCC views this as a major problem for consumers, and it's doing what it can to help consumers negotiate with their wireless providers to reduce the bills. To get help with your bill, you can file a complaint online at the FCC's Consumer Help Center by clicking on "File a Consumer Complaint," or you can call the FCC toll free at 1-888-CALL FCC (1-888-225-5322).

The agency also proposed this week new regulation that would require wireless operators to alert customers with a text or voice message when they are about to exceed a bundle of voice, text, or data. The FCC also suggested that wireless operators notify customers when they are about to incur international or other roaming charges that are not covered by their monthly plans, and if they will be charged at higher than normal rates. And finally, the agency proposed that all wireless carriers offer easy to find and use tools that help customers monitor usage and review usage balances.

Before it formally writes regulation, the commission is taking comments from the public, namely the wireless industry, consumer groups, and the public at large, to weigh in on the FCC proposals. If you're interested in sharing your story with the FCC and entering it into the public record as part of these proceedings you can do so on the FCC's Consumer Help Center Web site. Use the "File a Comment With the FCC" button to make your views known.

In a report issued Wednesday, the FCC said it had received 764 complaints of bill shock in the first half of 2010. This is not a huge number, given that there are more than 292 million cell phone subscribers in the U.S. Still, of these complaints, the agency found that 67 percent of them were for amounts over $100. And 20 percent were regarding bills over $1,000. The largest complaint received during this time was for $68,505.

The agency has listed some tips on its Web site to help consumers avoid bill shock:

  • Understand your calling pattern for making voice calls, and ask your carrier for a plan that would be best for your kind of use.
  • If you are an infrequent phone user, consider a prepaid plan. Because you "prepay" for all your minutes, these plans make it impossible to go over your set limit.
  • Understand what your roaming charges are and where you will incur them.
  • Understand your options for data and text plans.
  • If you are going to use your mobile phone outside the U.S. for voice, e-mail, and other services, make certain to find out beforehand what charges may apply. (Visit Wireless World Travel for more information about using a wireless phone in other countries.)
  • Ask how your carrier can help you avoid bill shock--with phone or text alerts, by letting you monitor your account online, or by giving you other information.

I reached out to Verizon Wireless for a comment on your situation. But a representative told me she could not comment specifically on this circumstance. "But we never want a customer to be dissatisfied with our service," she said.

Instead, she said that Verizon encourages customers planning a trip abroad to call Verizon Wireless customer service before they leave to make sure their mobile device is set up on the correct plan. Additionally, customers can check their data or voice usage at any time through My Verizon, the online portal that lets customers monitor their service, pay their bill, change plans, or order services. Last, you can check both data roaming rates and global plans online on the Verizon Wireless Web site.

Update 8:20 a.m. PDT: I wanted to clarify my advice for this particular reader.

Some readers have commented that they don't think that I have really addressed the issue. My first suggestion is that this family contact the FCC and file a complaint. The reason I recommend doing this is that the FCC has become very active in addressing these issues, and it is actually facilitating interactions with carriers in cases where consumers have not been satisfied. Earlier this week, FCC Chairman Julius Genachowski highlighted three cases of bill shock. In each case, consumers were only able to get the carriers to take action after the FCC got involved.

In some instances, the FCC has helped these consumers significantly reduce their bills. For example, Kerfye Pierre, who had a $30,000 bill for texting and e-mailing while in Haiti after the earthquake, was only able to reduce her bill by $25,000 after she got the FCC involved. She is still working with the FCC to negotiate an agreement with her carrier for the remaining $5,000.

The FCC also helped Alexander Cullison reduce his son's $400 texting bill by 50 percent.

In other cases, the FCC has helped consumers completely eliminate charges on their bills. Robert St. Germain received an $18,000 bill after his free data downloads expired without warning. He talked to lawyers and tried to get his state attorney general's office to help fight his cause. But only after involving the FCC was he able to negotiate his bill to zero.

Some readers have suggested that Lupe and Guillermo hire an attorney. They could do this, but the amount of money that they would likely spend on fighting this bill in court could end up equaling or exceeding the $8,000 they owe Verizon. All I am suggesting is that they first try to work with the FCC to get some resolution. The documentation that they mentioned in their letter will help them fight their case whether it's in court or through the FCC.

I hope this clarifies my answer.

Will a Verizon iPhone mean better deals on AT&T?

Dear Maggie,
I've been lusting for an iPhone for months. I just have a cheap prepaid that I am eager to get rid of so I can upgrade to a smartphone. I was all set to buy an iPhone when I read the recent news about Verizon Wireless getting the iPhone in January. I live in New York City and AT&T is notorious for dropped calls here, but I think that I would still like an iPhone because of the ability to use it abroad and to run multiple apps. Do you know if AT&T will be offering any more flexible plans or other incentives to continue to attract new users after Verizon enters the market? And which phone service do you recommend? I've considered switching to Verizon because I live in NYC and continuous service is definitely preferable to dropped calls!


Dear Jenn,
It seems like every few weeks a new iPhone-coming-to-Verizon-Wireless rumor surfaces. I'm going to be perfectly honest with you. I have no idea when this will happen. But based on my conversations with Verizon executives, I can say with some degree of certainty that it will eventually happen. Whether it's January or June or sometime in 2012, I can't say. But Thursday's news that Apple's iPad will be available in more than 2,000 Verizon Wireless stores starting October 28, is a good sign that Verizon and Apple are forming a relationship that will eventually lead to a Verizon iPhone.

So stay tuned.

As for your question regarding whether AT&T might lower its prices or offer more flexible plans to entice new customers, let me share some thoughts. There's been a lot of speculation that once the iPhone is introduced on Verizon, many existing iPhone users will flee AT&T. But considering that many current iPhone users are locked into a two-year contract, I don't see a mass exodus initially.

The bigger threat for AT&T when it comes to a Verizon iPhone is in attracting new customers. My prediction is that AT&T will likely see subscription growth slow, since most of AT&T's mobile subscriber growth today comes from the iPhone.

Still, I doubt that AT&T will move aggressively to lower prices or reconfigure its wireless data plans to attract new customers right away. My guess is the company will hold out as long as it can with its current pricing and data plans. Instead, I predict the company will try to push other devices, such as the new Windows Phone 7 devices, Google Android phones, and new BlackBerry phones.

If other markets are any indication of how the U.S. might react once competition is introduced, prices will likely fall only slightly, if at all. I wrote a story several months ago looking at how iPhone pricing was affected when multiple carriers entered the market in the U.K. In that market, the iPhone went from being available on one carrier to being available on four carriers. Six months after competition for the iPhone was introduced, pricing dipped only slightly. It seems that the iPhone and the services supporting it hold their value pretty well.

Now, for your final question: Which phone service do I recommend? If avoiding dropped calls is your priority, I'd say wait until the iPhone comes to Verizon and buy it on that network. But since you also mentioned in your note that one of the reasons you want the iPhone is so that you can take it overseas when you travel, I'd suggest getting the AT&T iPhone.

Unless Apple includes a GSM radio, along with CDMA technology, in the Verizon version of the iPhone, it will likely only work domestically. Verizon's cellular network is built on CDMA technology, but most carriers around the world use a technology called GSM. AT&T and T-Mobile USA have built their networks around GSM technology, which is why their phones can roam on carrier networks abroad.

Verizon offers some "world" phones, but these devices have an additional GSM radio built in to allow them to roam onto other networks.

Apple and Verizon could include a GSM radio in the Verizon version of the iPhone. And if the phone supports 4G, then it would eventually be able to roam onto other 4G networks around the globe that will use the same LTE technology that Verizon is using. But there are two reasons why this won't benefit you in the near term. First, Verizon is the first major carrier in the world deploying 4G using LTE. So in the immediate future, there won't be any 4G networks to roam onto while traveling. And second, Verizon will still use its 3G network to deliver voice services, so even if you could roam onto a 4G network overseas, you'd only be able to get data service. And you'd still need a radio in the phone to connect to a GSM network for voice service.

Voice samples come to CNET cell phone reviews

Dear Maggie,
For me, the primary use of a cell phone is as a phone. How can I compare the call quality of various phones? CNET Reviews provides only subjective and anecdotal information, but nothing really usable.


Dear Marty,
CNET Reviews has actually started adding audio clips to some of its reviews of new phones. The first reviews that got the audio samples were for the iPhone 4 and HTC Evo 4G. Since then, reviewers have been including audio in some other reviews, including the one for the Samsung Fascinate and the T-Mobile G2.

Starting next week, all new cell phone reviews will include snippets of audio that will allow readers to gauge for themselves the quality of a voice call on a phone.

"We've always evaluated and described audio quality in our reviews," says Kent German, senior editor at CNET Reviews. "But until now we haven't been able to let CNET readers experience it for themselves. With these audio samples, you can compare call quality right on CNET. It's been interesting because you do notice a difference in the audio."