It isn’t immediately clear how such a scheme could be implemented at scale. The FCC is likely to give carriers some additional flexibility, such as allowing them to exempt high-cost rural areas from the new rules or allowing wireless companies to use their own pricing schemes instead of the ones prescribed by regulators.
The rules call for carriers to take a portion of the $1.5 billion that they charge to wireless subscribers — or about 30 percent — and give it back to customers in the form of credits. Carriers will also be expected to offer two lower-cost, unlimited-data plans.
Consumers are most likely to get relief in an area that has long vexed wireless consumers: service outages. If a cellphone loses signal, service providers often say that they can’t offer to restore service until the customer is off the network and no longer connected to another carrier.
Cellphones are typically designed to lose connection after a certain period of time, such as 30 days. Service can also be terminated for customers who owe cellphone companies money. The industry has made big investments in technology to fix the problem, including “healing” technologies that aim to help cellphones find the weakest connection, which can help bring the network back online.
A lot of the rules would require cellphone companies to be upfront about what kinds of situations would cause them to terminate service.
Some customers might not see much benefit from a new rule. If a customer subscribes to a particular wireless plan — for instance, one that offers unlimited calls and data but only lets them make four phone calls a month or allows a certain amount of data per month — they’re unlikely to get service from another wireless provider because they’re locked into that plan. So they would be unable to switch to another cellphone company under the new rules.
The final rules, in place by next June, would also bar cellphone companies from slowing down data speeds for wireless customers with unlimited plans if they were connecting to the Internet from a public hotspot. The FCC’s move would effectively prevent Comcast, Verizon and other Internet service providers from taking steps that would throttle the connection speeds of customers who are using its Internet service. (Read about what the new net neutrality rules would do.)
“Those who use wireless service to conduct business for a living — from doctors and plumbers to lawyers and teachers — will see the biggest benefit from the rule,” FCC Chairman Tom Wheeler said in a statement. “This is a simple concept: Everyone should have access to a fast, competitive Internet.”
It is possible, however, that mobile carriers will try to find ways around the new rules. For example, if an unlimited plan required customers to buy certain hardware or accessories, cellphone companies could argue that those items were the reason for providing access to their service, and thus were necessary to provide the service. Or cellphone companies could also require customers to stay on their networks in order to access certain paid apps.
The Federal Trade Commission is also expected to issue new net-neutrality rules that take effect on the same day as the FCC’s new rules. The FTC plan, which the FCC had encouraged the FTC to pursue, would give wireless carriers more authority to manage data speeds on their networks.
Wireless carriers have argued that cellphone plans are becoming more complex as consumers use smartphones for more than just phone calls. The wireless industry would like the FCC and FTC to adopt the concept of “bright line” rules — standards that would make it illegal for carriers to do certain things, including exempting high-cost areas from net neutrality and exempting services like Amazon Prime and Netflix from certain types of data caps.
The wireless industry is also pushing to allow carriers to use tiered data pricing, which would let wireless companies offer some customers unlimited data while charging others for a certain amount of data per month. Some wireless companies such as AT&T and Verizon offer tiered pricing to consumers, but the pricing differs depending on the customer’s plan.
AT&T is the nation’s largest wireless carrier, with 24.3 million wireless subscribers. Verizon Wireless and T-Mobile US are the nation’s second- and third-largest carriers, with a combined total of about 61.1 million subscribers.
In a statement, T-Mobile US Chief Executive John Legere called the rules “unfair, unnecessary and anti-consumer.” Verizon has also complained about the rules, calling them “overly prescriptive.”
But other consumer advocates and independent experts have said the rules could be a net positive for consumers. Net neutrality proponents have pushed the FCC to adopt rules that would apply to all types of online access, including traditional broadband and wireless Internet. That type of sweeping net neutrality could help prevent ISPs like Comcast and AT&T from charging extra fees for certain online services and potentially making their own online services — like Hulu or Netflix — unavailable to customers who aren’t paying for certain services.
The FCC is expected to accept public comments on its net-neutrality proposal for the next 90 days.
This story was updated at 11:10 a.m. ET on Wednesday with additional information about carriers’ policies and the possible impact of the new rules.
Meredith is a reporter for MarketWatch. The Atlanta Journal-Constitution quoted her work in “Best Business Cities” and "Best Cities for Business and Careers" publications. Meredith holds a master's degree in journalism from the University of Missouri and a bachelor's degree in English with a minor in communications from the University of Nevada, Reno. She is originally from New Hampshire, but calls the Peach State home. Meredith can be reached at [email protected]
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To view all documents from former Google CEO Eric Schmidt’s new cybersecurity initiative, the Center for New American Security, click here.
The Center for New American Security—a D.C.-based think tank that provides research, analysis and policy recommendations for foreign and defense policy, global security, technology and the economy—has formed a new partnership with Schmidt’s project, the New Digital Age.
Schmidt will serve
