Subject: [NEXTEL-1] Newspaper: 911-Related Cell Phone Charges Under Scrutiny

From: Marcel <[email-masked]>
Date: Wed, 27 Nov 2002 23:55:03 -0500

http://www.kolr10.com/Global/story.asp?S=1025626&amp;nav=0RXJCZa9

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November 27, 2002

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by the Associated Press
Newspaper: 911-Related Cell Phone Charges Under Scrutiny

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On the heels of a class-action lawsuit questioning some monthly charges on cellular telephone bills, Missouri's top law enforcer has begun investigating whether the bills are illegally deceptive, the St. Louis Post-Dispatch reported in a copyright story Monday.

At issue is whether cell phone customers are being forced to pay for a 911-related service they're not getting.

"We're not really challenging their rates," said Tim Van Ronzelen, a Jefferson City attorney behind the class-action lawsuit. "We're challenging a billing practice, especially the way it's placed on a customer's bill, under all these federal and state taxes. It makes a person think it's a tax - when it's not."

The issue stems from the federal government's wanting your location and cell phone number to pop up on a computer screen at the local 911 emergency center. Calls for help on corded phones have had that ability for years; cell phones require different technology just now starting to be used.

To accomplish this, local public safety departments and cell companies are spending millions of dollars on new equipment. In August, Missouri voters rejected for the second time a referendum to pay for the changes with a 50-cent-per-month fee on cell phone bills.

Some cell phone companies say they are paying for the equipment without extra charges to their customers. In Missouri, three companies - Nextel, Alltel and Sprint - have added separate charges on monthly customer bills for the 911 update.

None of the three companies offers the emergency 911 service yet, said R.D. Porter, the Missouri state 911 coordinator, meaning that emergency dispatchers can't tell where someone is when he or she calls for help on a cell phone.

"They are telling customers they have the service when in reality it's not available," Porter said. Because of funding problems, he added, the service won't be available for months - perhaps years.

Consumer fraud lawyers in the state attorney general's office also are probing whether they have jurisdiction and whether any laws have been broken, spokesman Scott Holste said.

Missouri's unfair merchandising law bars deception, misrepresentation, concealment or omission of facts and other unfair practices. State prosecutors have subpoenaed records from Nextel and Alltel.

Nextel's description of its fee on monthly bills has drawn the ire of several customers. The company calls the charge "federal-programs cost recovery" - and lists it, along with federal, state and local taxes, under the heading "taxes, fees and assessments" on customer bills.

In January, Nextel - the nation's fifth-largest wireless phone company, with about 10 million customers - began charging each customer, except government agencies, an extra 55 cents a month. In October, Nextel upped its monthly fee to $1.55, amounting to an estimated $15 million a month, or more than $180 million a year.

After learning about that fee in August, St. Louis County personal trainer James Sanders, with acquaintance Van Ronzelen, enlisted two other lawyers and a second client and filed suit in Jackson County Circuit Court in Kansas City.

Class-action lawyers usually believe they have a better chance with state court juries than with federal judges, though Nextel moved the case to federal court in Kansas City and asked a judge to dismiss the lawsuit.

Nextel's lawyers, including Missouri Republican Party treasurer Harvey Tettlebaum, argue that the company acted legally, is only doing what is required by the Federal Communications Commission, and is more straightforward in describing its fee than any other cell phone company.

Nextel's chief defense: Missouri and other states are "pre-empted" from regulating cell phone rates by federal law and the FCC.

"We determined that the fee had to be higher in order to offset the many costs mandated" by the FCC, spokeswoman Leigh Horner said, adding that Nextel notified customers in advance of the fees and made it clear it was not a tax and not required by federal law.

Some customers may have overlooked the notifications because Nextel included them in bills sent a month before it began charging the fees.

Three of four other big cell companies - AT&T Wireless, Cingular and Verizon - say they don't charge a separate 911 fee in Missouri.

Sprint, the fourth-largest company, charges a 2 percent fee, spokesman James Fisher said.

Nextel says it will offer to cancel the contract of any customer who objects to the fee within 30 days of when it began.

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