Wireless Industry Group Says All Those Overages Are Actually Saving Us Money

There has been a lot of talk in recent years about cellphone bill shock and overages and what can be done to stop it. Now comes a new study by a wireless industry trade group that claims consumers are actually saving money because of all these overage.

“Most consumers who exceed their current cellphone plan limits are better off financially if they pay extra charges occasionally rather than change to a more expensive plan to eliminate overages,” reads a statement from the Wireless Communications Association International (WCAI, not to be confused with our WCIA), a group that represents various elements of the mobile phone world.

The organization says that “one-size fits all” legislation for cell phone bills would “likely have the unintended consequence of reducing choice, flexibility, and consumer savings.”

The study says that just 13.5% of all cell phone users are hit by overage fees, and that this only happens one or two months out of the year. According to their calculations, “consumers save between $882 million and $2.4 billion per year by effectively creating personalized price plans that combine set monthly fees with the occasional overage.”

Okay… the only problem with this line of argument is that the main plan being considered by the FCC — much like the anti-bill shock legislation introduced by New Mexico Senator Tom Udall — wouldn’t create a one-size fits all system. Rather, it would require wireless providers to notify customers by text or e-mail when they are about to cross over into overage territory.

The study’s author has an answer for that too: “Their behavior suggests it is unlikely that usage notifications or usage controls would change their behavior because they are either indifferent to the overage charges or have determined that the occasional overage charge is more economical for them than choosing a more expensive plan.”

Or maybe because they don’t know they’re going over and then don’t feel like arguing with their wireless providers afterward?

A congressional source close to the bill shock issue calls shenanigans on this study. “The reason these guys put this together is to give some ammo to their supporters on the Hill,” explains the insider. “Specifically the House, who could in theory zero out any appropriation funds that would be needed to implement the regulation.”

Here’s a link to a PDF of the WCAI white paper.