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Panel: Cellular companies labelling fees as 'taxes'

updated 04:20 pm EDT, Wed October 17, 2007

Cellular misnaming 'taxes'

In discussing a proposed bill to limit the severity of cellular cancellation fees, a panel of the US Senate is bringing to light serious ethical problems, Reuters reports. Among these is a practice of some unidentified companies to label charges as "taxes," when they are in fact just corporate fees. The bill -- sponsored by senators Amy Klobuchar (D-MN) and John Rockefeller (D-WV) -- is partly targeted at this concern, and would require companies to avoid the term "tax" except where the charge is mandated by government regulations.

It has further been revealed that cellular networks are frequently charging $100 to $200 for early terminations even in extenuating circumstances, such as a soldier's deployment to the Iraq War. Lawmakers would also like to bar the practice of extending contracts without consent, something which has been done by raising or lowering minutes on a user's statement.

Testifying in front of the Senate panel, Verizon Wireless CEO Lowell McAdam has called for a "light touch" in controlling the cellular industry, insisting that his company has let soldiers out of contracts without charge, and has not padded any regulatory fees. Any success Verizon has had is due to its ethical behavior, he argues. "Competitive markets," says McAdam, "punish bad behavior."



By Electronista Staff
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