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Testimony: 

Before the Committee on Commerce, Science, and Transportation, United 
States Senate: 

United States Government Accountability Office: 
GAO: 

For Release on Delivery: 
Expected at 2:30 a.m. EDT:
Wednesday, June 17, 2009: 

Telecommunications: 

Preliminary Observations about Consumer Satisfaction and Problems with 
Wireless Phone Service and FCC's Efforts to Assist Consumers with 
Complaints: 

Statement of Mark Goldstein, Director:
Physical Infrastructure Issues: 

GAO-09-800T: 

GAO Highlights: 

Highlights of GAO-09-800T, a testimony before the Committee on 
Commerce, Science, and Transportation, United States Senate. 

Why GAO Did This Study: 

The use of wireless phone service in the United States has risen 
dramatically over the last 20 years, with an estimated 270 million 
subscribers as of December 2008. Americans increasingly rely on 
wireless phones as their primary or sole means of telephone 
communication. Concerns have been raised in recent years about the 
quality of this service, including specific concerns about billing and 
carriers’ contract terms, such as fees charged for terminating service 
before the end of a contract period. Under federal law, the Federal 
Communications Commission (FCC) has flexibility in regulating wireless 
phone service carriers. FCC’s rules include procedures for addressing 
consumer complaints. 

This testimony provides preliminary information on (1) consumers’ 
current satisfaction with wireless phone service and problems consumers 
have experienced with this service (2) FCC’s efforts to assist wireless 
consumers with complaints. The statement is based on related ongoing 
work that GAO is conducting for this committee and plans to report on 
later this year. To conduct this work, GAO surveyed 1,143 adult 
wireless phone users from a nationally representative, randomly 
selected sample and interviewed and analyzed documents obtained from 
FCC and various stakeholder organizations representing consumers, state 
agencies and officials, and industry. 

What GAO Found: 

On the basis of its national survey of adult wireless phone users, GAO 
estimates that overall, 84 percent of users are very or somewhat 
satisfied with their wireless phone service. Stakeholders GAO 
interviewed cited billing, terms of the service contract, carriers’ 
explanation of their service at the point of sale, call quality, and 
customer service as key aspects of service in which consumers have 
experienced problems with wireless phone service in recent years. GAO’s 
survey results indicate that while most wireless phone users are very 
or somewhat satisfied with each of these key aspects of wireless phone 
service, the percentages of those very or somewhat dissatisfied with 
these specific aspects ranged from about 9 to 14 percent. GAO’s survey 
results also indicate that some wireless phone service consumers have 
experienced problems with billing, certain contract terms, and customer 
service. For example, GAO estimates that about a third of users 
responsible for paying their bills had problems understanding their 
bills or had unexpected charges at least some of the time. 
Additionally, GAO estimates fees for the early termination of a 
contract were a problem for about 42 percent of users who wanted to 
switch services but did not, and that about 21 percent of users who 
contacted customer service with a specific problem were dissatisfied 
with their carriers’ efforts to address the problem. In response to the 
types of consumer problems noted above, wireless carriers have taken 
some actions, such as prorating early termination fees, offering 
noncontract service options, and spending billions of dollars each year 
on wireless infrastructure, which can improve call quality. 

FCC assists wireless consumers by handling thousands of their 
complaints about carriers’ service each year, but consumers may lack 
awareness of this process and its intended outcomes. FCC reviews 
consumer complaints submitted through its call centers and Web site, 
forwards complaints to carriers for response, reviews the carriers’ 
responses, and closes complaints when it finds the responses 
sufficient. While FCC informs consumers through its Web site and fact 
sheets that they may submit complaints to it, GAO’s survey results 
suggest that most consumers do not know they can do so and many do not 
know where they could complain. FCC has not articulated goals that 
clearly identify intended outcomes of its efforts to address consumer 
complaints and lacks measures to demonstrate how well it is achieving 
intended outcomes. For example, FCC has a goal to “improve customer 
experience” with its call centers and Web site, through which consumers 
submit complaints, but lacks measures of customer experience. Further, 
it is not clear if the intended outcome of FCC’s complaint handling 
efforts is resolving consumer problems or fostering communication 
between consumers and carriers. Consequently, consumers may not 
understand what to expect from FCC’s complaint process, and the 
effectiveness of FCC’s efforts to assist consumers with complaints is 
unclear. GAO plans to complete its ongoing work in the fall, and 
expects to make recommendations at that time. 

View [hyperlink, http://www.gao.gov/products/GAO-09-800T] or key 
components. For more information, contact Mark Goldstein at (202) 512-
6670 or goldsteinm@gao.gov. 

[End of section] 

Chairman Rockefeller and Members of the Committee: 

We appreciate the opportunity to participate in this hearing to discuss 
wireless phone service consumer issues. My statement today is based on 
our ongoing work on consumers' experience with wireless phone service 
and efforts by the Federal Communications Commission (FCC) to assist 
wireless phone service consumers with complaints.[Footnote 1] The use 
of wireless phone service in the United States has risen dramatically 
over the last 20 years, and Americans increasingly rely on wireless 
phones as their primary or sole means of telephone communication. 
According to industry data, wireless subscribership has grown from 
about 3.5 million subscribers in the United States in 1989 to about 270 
million today (see figure 1).[Footnote 2] About 82 percent of adults 
now live in households with wireless phone service, and 35 percent of 
households use wireless phones as their primary or only means of 
telephone service[Footnote 3]. 

Figure 1: Estimated Growth in Wireless Phone Subscribers from 1989 
through 2008: 

[Refer to PDF for image: line graph] 

Year: 1989; 
Number of subscribers: 3.5 million. 

Year: 1990; 
Number of subscribers: 5.3 million. 

Year: 1991; 
Number of subscribers: 7.6 million. 

Year: 1992; 
Number of subscribers: 11.0 million. 

Year: 1993; 
Number of subscribers: 16.0 million. 

Year: 1994; 
Number of subscribers: 24.1 million. 

Year: 1995; 
Number of subscribers: 33.8 million. 

Year: 1996; 
Number of subscribers: 44.0 million. 

Year: 1997; 
Number of subscribers: 55.3 million. 

Year: 1998; 
Number of subscribers: 69.2 million. 

Year: 1999; 
Number of subscribers: 86.1 million. 

Year: 2000; 
Number of subscribers: 109.5 million. 

Year: 2001; 
Number of subscribers: 128.4 million. 

Year: 2002; 
Number of subscribers: 140.8 million. 

Year: 2003; 
Number of subscribers: 158.7 million. 

Year: 2004; 
Number of subscribers: 182.1 million. 

Year: 2005; 
Number of subscribers: 207.9 million. 

Year: 2006; 
Number of subscribers: 233.0 million. 

Year: 2007; 
Number of subscribers: 255.4 million. 

Year: 2008; 
Number of subscribers: 270.3 million. 

Source: CTIA - The Wireless Association, used by permission. 

Note: Industry data count a subscriber as any person using a wireless 
phone under a paid subscription. Because an individual could have more 
than one wireless phone, and thus more than one subscription, the 
number of wireless phone service users would be smaller than the number 
of subscribers. 

[End of figure] 

Concerns have been raised in recent years about the quality of wireless 
phone service, including specific concerns about billing, customer 
service, and carriers' contract terms, such as fees carriers charge 
customers for terminating their service before the end of the contract 
period (known as early termination fees). Under federal law, FCC is 
directed to foster a competitive wireless marketplace and the agency 
has the flexibility to exempt wireless carriers from regulation if it 
determines that doing so promotes competition and is in the public 
interest.[Footnote 4] FCC's rules require that wireless carriers, like 
other common carriers, provide their services to consumers at a 
reasonable rate and in a manner that is not discriminatory.[Footnote 5] 
Its rules also establish procedures for FCC to work with carriers to 
address consumer complaints.[Footnote 6] States, which have 
traditionally regulated local telephone service, also retain some 
authority under federal law to regulate the terms and conditions of 
wireless phone service, and many address consumer complaints.[Footnote 
7] 

My testimony today discusses (1) consumers' satisfaction with wireless 
phone service and problems they have experienced with this service and 
(2) FCC's efforts to address consumers' complaints about this service. 
This testimony presents preliminary observations based on ongoing work 
we expect to complete this fall for this committee and the House 
Subcommittee on Communications, Technology, and the Internet. This 
ongoing work will also examine FCC's wireless phone service oversight 
efforts and the extent to which state utility commissions oversee 
wireless phone service and assist consumers. 

To determine consumers' satisfaction with their wireless phone service 
and identify problems consumers have experienced with this service, we 
surveyed a nationally representative, randomly selected sample of adult 
wireless phone users aged 18 or older who had cell phone service in 
2008, from which we completed 1,143 interviews;[Footnote 8] interviewed 
stakeholders from various organizations, including national consumer 
and state agency organizations, state agencies in three selected states 
(California, Nebraska, and West Virginia),[Footnote 9] wireless 
industry associations, the four major wireless carriers and two 
selected smaller carriers, and FCC; and reviewed documents obtained 
from these sources. To determine how FCC addresses consumers' 
complaints, we interviewed FCC officials about these activities and 
reviewed related documentation obtained from the agency. We also 
reviewed relevant laws, regulations, and procedures and FCC's quarterly 
complaint reports, strategic plan, and budget, including the agency's 
performance goals and measures (additional information about our scope 
and methodology appears in appendix I). We are conducting this 
performance audit, which began in September 2008, in accordance with 
generally accepted government auditing standards. Those standards 
require that we plan and perform the audit to obtain sufficient, 
appropriate evidence to provide a reasonable basis for our findings 
based on our audit objectives. We believe that the evidence obtained 
provides a reasonable basis for our findings based on our audit 
objectives. 

According to Our National Survey, Most Consumers Are Satisfied with 
Their Wireless Phone Service, but Some Have Experienced Problems: 

According to our survey results, overall, wireless phone service 
consumers are satisfied with the service they receive. Specifically, we 
estimate that 84 percent of adult wireless phone users are very or 
somewhat satisfied with their wireless phone service, and that 
approximately 10 percent are very or somewhat dissatisfied with their 
service (see fig. 2).[Footnote 10] 

Figure 2: Estimated Overall Satisfaction of Wireless Phone Users with 
Their Service: 

[Refer to PDF for image: pie-chart] 

Satisfied: 84%; 
* Very satisfied: 45%; 
* Somewhat satisfied: 39%; 
Neither: 6%; 
Dissatisfied: 10%; 
* Somewhat dissatisfied: 6%; 
* Very dissatisfied: 3%. 

Source: GAO survey. 

Note: GAO conducted its survey of adult wireless phone users from 
February 23, 2009, through April 5, 2009. All estimates presented in 
this figure have a margin of error of less than plus or minus 5 
percentage points. The percentage of users very or somewhat 
dissatisfied with wireless phone service is 10 percent but does not add 
up to such in the figure due to rounding. "Neither" refers to 
respondents who indicated they were neither satisfied nor dissatisfied. 
Additionally, we estimate that less than 1 percent of users had no 
opinion or did not know about their overall satisfaction. Numbers may 
not sum to 100 because of rounding. 

[End of figure] 

Stakeholders we interviewed identified a number of areas in which 
consumers have reported problems with their wireless phone service in 
recent years.[Footnote 11] On the basis of these interviews and related 
documents, we identified five key areas of concern (see table 1). 
[Footnote 12] 

Table 1: Key Areas of Consumer Concern Identified by Stakeholders: 

Key area of concern: Billing; 
Nature of concern: 
* Complexity of billing statements leads to lack of consumer 
understanding; 
* Bills contain unexpected charges and errors. 

Key area of concern: Terms of service contract; 
Nature of concern: 
* Consumers are subject to fees for canceling their service before the 
end of their contract term (early termination fees), regardless of 
their reason for wanting to terminate service, effectively locking 
consumers into their contracts; 
* Consumers are not given enough time to try out their service before 
having to commit to the contract; 
* Carriers extend contracts when consumers request service changes. 

Key area of concern: Explanation of service; 
Nature of concern: 
* Key aspects of service, such as rates and coverage, are not clearly 
explained to consumers at the point of sale (when they sign up for the 
service). 

Key area of concern: Call quality; 
Nature of concern: 
* Consumers experience dropped or blocked calls as well as noise on 
calls that makes hearing calls difficult; 
* Consumers experience poor coverage, which in rural areas may be the 
result of lack of infrastructure and in urban areas stems from lack of 
capacity to manage the volume of calls at peak times. 

Key area of concern: Customer service; 
Nature of concern: 
* Consumers experience problems such as long waits, ineffective 
assistance, and insufficient resolution to problems. 

Source: GAO analysis. 

[End of table] 

Based on our survey results, we estimate that most wireless phone users 
are satisfied with these five specific aspects of service; however, the 
percentages of those very or somewhat dissatisfied range from about 9 
to 14 percent, depending on the specific aspect of service (see table 
2). For example, we estimate that 14 percent of wireless phone users 
are dissatisfied with the terms of their service contract. We also 
estimate that 85 percent of wireless phone users are very or somewhat 
satisfied with call quality, while the percentages of those very or 
somewhat satisfied with billing, contract terms, carrier's explanation 
of key aspects of service at the point of sale, and customer service 
range from about 70 to 76 percent. Additionally, we estimate that most 
wireless phone users are satisfied with specific dimensions of call 
quality. For example, we estimate that 86 to 89 percent of wireless 
phone users are satisfied with their coverage when using their wireless 
phones at home, at work, or in their vehicle. 

Table 2: Estimated Levels of Satisfaction with Specific Aspects of 
Wireless Phone Service, by Percentage: 

Level of satisfaction: 

Aspect of service: Billing; 
Satisfied (very or somewhat): 76%; 
Dissatisfied (very or somewhat): 12%; 
Neither satisfied or dissatisfied: 4%; 
No opinion/no basis to judge: 8%. 

Aspect of service: Terms of service contract; 
Satisfied (very or somewhat): 72%; 
Dissatisfied (very or somewhat): 14%; 
Neither satisfied or dissatisfied: 6%; 
No opinion/no basis to judge: 8%. 

Aspect of service: Explanation of service; 
Satisfied (very or somewhat): 76%; 
Dissatisfied (very or somewhat): 9%; 
Neither satisfied or dissatisfied: 5%; 
No opinion/no basis to judge: 10%. 

Aspect of service: Call quality; 
Satisfied (very or somewhat): 85%; 
Dissatisfied (very or somewhat): 11%; 
Neither satisfied or dissatisfied: 4%; 
No opinion/no basis to judge: <1%. 

Aspect of service: Customer service; 
Satisfied (very or somewhat): 70%; 
Dissatisfied (very or somewhat): 12%; 
Neither satisfied or dissatisfied: 6%; 
No opinion/no basis to judge: 12%. 

Source: GAO survey. 

Note: GAO conducted its survey of adult wireless phone users from 
February 23, 2009, through April 5, 2009. All estimates presented in 
this table have a margin of error of less than plus or minus 5 
percentage points. All respondents were asked about their level of 
satisfaction with each of these five aspects of wireless phone service. 
Respondents were also asked not to indicate a level of satisfaction if 
they had no basis to judge a particular aspect of service. For example, 
a respondent may have no basis to judge satisfaction with the contract 
terms if he or she did not sign the contract under which they have 
service. Percentages may not sum to 100 due to rounding. 

[End of table] 

Other results of the survey suggest that some wireless phone consumers 
have recently experienced problems with billing, certain contract 
terms, and customer service since the beginning of 2008. For example, 
we estimate that during this time about 34 percent of wireless phone 
users responsible for paying for their service received unexpected 
charges, and about 31 percent had difficulty understanding their bill 
at least some of the time.[Footnote 13] Also during this time, almost 
one-third of wireless users who contacted customer service about a 
problem did so because of problems related to billing.[Footnote 14] 
Further, among wireless users who wanted to switch carriers during this 
time but did not do so, we estimate that 42 percent did not switch 
because they did not want to pay an early termination fee.[Footnote 15] 
Finally, among those users who contacted customer service, we estimate 
that 21 percent were very or somewhat dissatisfied with how the carrier 
handled the problem. 

In response to the areas of consumer concern noted above, wireless 
carriers have taken a number of actions in recent years. For example, 
officials from the four major carriers, Verizon Wireless, AT&T, Sprint 
Nextel, and T-Mobile, reported taking actions such as prorating their 
early termination fees, offering service options without contracts, and 
providing Web-based tools consumers can use to research a carrier's 
coverage area, among other efforts.[Footnote 16] In addition, according 
to CTIA-The Wireless Association, the wireless industry spent an 
average of $24 billion annually between 2001 and 2007 on infrastructure 
and equipment to improve call quality and coverage. Also, carriers told 
us they use information from third-party tests and customer feedback to 
determine their network and service performance and identify needed 
improvements. 

FCC Assists Consumers with Wireless Complaints but Lacks Clear Goals 
and Outcome Measures for These Efforts: 

FCC assists wireless consumers by handling thousands of their informal 
complaints each year,[Footnote 17] but consumers may lack awareness of 
this process and its intended outcomes. FCC has a process to receive 
consumers' complaints and forward them to carriers for a response. 
However, the results of our consumer survey suggest that most consumers 
are not aware of FCC's complaint process. Furthermore, FCC has not 
articulated goals that clearly identify the intended outcomes of its 
efforts to address wireless consumer complaints and lacks related 
measures. As a consequence, FCC's effectiveness in assisting wireless 
consumers with complaints is unclear and consumers may not understand 
what to expect from FCC's complaint process. 

FCC Assists Consumers with Wireless Complaints: 

Each year, FCC receives thousands of complaints submitted by consumers 
about problems with telecommunications services, including wireless 
service, via its Web site, telephone, e-mail, mail, or fax.[Footnote 
18] In 2008, the agency received over 430,000 informal complaints from 
consumers, including over 19,000 complaints related to services 
provided by wireless carriers.[Footnote 19] The top categories of 
wireless complaints FCC reported receiving were for problems related to 
billing and rates, service-related issues, and contract early 
termination fees.[Footnote 20] According to FCC officials, the agency 
informs consumers they may complain to FCC about problems with their 
wireless service or other telecommunications services by providing 
information on how to complain to the agency on its Web site and in 
fact sheets that are distributed to consumers through its Web site and 
other methods.[Footnote 21] 

After reviewing a complaint received, FCC responds by sending the 
consumer a letter about the complaint's status. If FCC determines that 
the complaint should be forwarded to the carrier for a response, the 
agency sends the complaint to the carrier and asks the carrier to 
respond to FCC and the consumer within 30 days. Once FCC receives a 
response from the carrier, the agency reviews the response, and if FCC 
determines the response has addressed the consumer's complaint, marks 
the complaint as closed.[Footnote 22] FCC officials told us they 
consider a carrier's response to be sufficient if it responds to the 
issue raised in the consumer's complaint; however, such a response may 
not address the problem to the consumer's satisfaction. When FCC 
considers a complaint to be closed, it sends another letter to the 
consumer, which states that the consumer can call FCC with further 
questions or, if not satisfied with the carrier's response, can file a 
formal complaint. FCC officials also told us that if a consumer is not 
satisfied, the consumer can request that FCC mediate with the carrier 
on his or her behalf; however, the letter FCC sends to a consumer whose 
complaint has been closed does not indicate this is an option.[Footnote 
23] 

Since, based on our survey results, we estimate that about 21 percent 
of wireless phone users who contacted their carriers' customer service 
were dissatisfied with how their carriers addressed their concerns, 
FCC's efforts to handle complaints are an important means by which 
consumers may be able to get assistance in resolving their problems. 
However, the results of our consumer survey suggest that most consumers 
would not complain to FCC if they have a problem that their carrier did 
not resolve. Specifically, we estimate that 13 percent of wireless 
phone users would complain to FCC if they had such a problem and that 
34 percent do not know where they could complain. 

FCC Lacks Clear Goals and Measures for Its Complaint Handling Efforts: 

FCC has not articulated goals that clearly identify intended outcomes 
for its efforts to address wireless consumer complaints and lacks 
measures to demonstrate how well it is achieving intended outcomes. The 
Government Performance and Results Act of 1993 (GPRA) requires an 
agency to establish outcome-related performance goals for the major 
functions of the agency.[Footnote 24] GPRA also requires an agency to 
develop performance indicators for measuring the relevant outcomes of 
each program activity in order for the agency to demonstrate how well 
it is achieving its goals.[Footnote 25] 

FCC's key goal related to its consumer complaint efforts is to "work to 
inform American consumers about their rights and responsibilities in 
the competitive marketplace." Under this key goal, one of FCC's 
subgoals is to "facilitate informed choice in the competitive 
telecommunications marketplace." According to FCC officials, "informed 
choice" means consumers are informed about how a particular 
telecommunications market works, what general services are offered, and 
what to expect when they buy a service. FCC's measure pertaining to its 
efforts to address wireless consumer complaints under this subgoal is 
to respond to consumers' general complaints within 30 days.[Footnote 
26] According to FCC officials, this measure reflects the time it takes 
FCC to initially respond to the consumer about the status of a 
complaint. This measure does not clearly or fully demonstrate FCC's 
achievement of its goal to facilitate informed consumer choice. 
Additionally, this is a measure of a program output, or activity, 
rather than of the outcome the agency is trying to achieve. Another 
subgoal is to "improve customer experience with FCC's call centers and 
Web site." While this subgoal does identify an intended outcome, FCC 
does not have a measure related to this outcome that pertains to 
consumers who complain about services provided by their wireless 
carrier.[Footnote 27] FCC officials told us that they do not measure 
customer experience with the agency's call centers and Web sites, but 
sometimes receive anecdotal information from customers about their 
experiences.[Footnote 28] 

We have previously reported that to better articulate results, agencies 
should create a set of performance goals and measures that address 
important dimensions of program performance. FCC's goals may not 
represent all of the important dimensions of FCC's performance in 
addressing consumer complaints. A logical outcome of handling 
complaints is resolving problems, or, if a problem cannot be resolved, 
helping the consumer understand why that is the case.[Footnote 29] 
However, it is not clear whether resolving problems is an intended 
outcome of FCC's consumer complaint efforts. While FCC's goals in this 
area indicate that informing consumers is a goal of the agency, some 
information from FCC implies that another intended outcome of these 
efforts is to resolve consumers' problems. For example, FCC's fact 
sheets state that consumers can file a complaint with FCC if they are 
unable to resolve a problem directly with their carrier. This may lead 
consumers to believe that FCC will assist them in obtaining a 
resolution. However, FCC officials told us that the agency's role in 
addressing complaints, as outlined in the law, is to facilitate 
communication between the consumer and the carrier and that FCC lacks 
the authority to compel a carrier to take action to satisfy many 
consumer concerns. Thus, it is not clear if the intended outcome of 
FCC's complaint handling efforts is resolving consumer problems, 
fostering communication between consumers and carriers, or both. 
Furthermore, FCC has not established measures of its effectiveness in 
either resolving consumer problems or fostering communication between 
consumers and carriers.[Footnote 30] For example, FCC does not measure 
consumer satisfaction with its complaint-handling efforts. Without 
clear outcome-related goals and measures linked to those goals, the 
purpose and effectiveness of these efforts are unclear and the agency's 
accountability for its performance is limited.[Footnote 31] Moreover, 
consumers may not understand what to expect from FCC's complaint 
process. 

Chairman Rockefeller and members of the committee, this concludes my 
prepared statement. Our future work, which we expect to complete this 
fall, will provide more definitive information about many of the 
matters covered in my statement today, including detailed information 
about oversight of wireless phone service carried out by FCC and state 
utility commissions. We also expect to make recommendations at that 
time. I would be pleased to respond to any questions that you or other 
members of the committee might have. 

[End of section] 

Appendix I: Scope and Methodology: 

To obtain information about consumers' satisfaction and problems with 
their wireless phone service, we commissioned a telephone survey of the 
U.S. adult population of wireless phone service users. Our aim was to 
produce nationally representative estimates of adult wireless phone 
service users' (1) satisfaction with wireless service overall and with 
specific aspects of service, including billing, terms of service, 
carriers' explanation of key aspects of service, call quality and 
coverage, and customer service; (2) frequency of problems with call 
quality and billing; (3) desire to switch carriers and barriers to 
switching; and (4) knowledge of where to complain about problems. 
Percentage estimates have a margin of error of less than 5 percentage 
points unless otherwise noted. We conducted this survey of the American 
public from February 23, 2009, through April 5, 2009. A total of 1,143 
completed interviews were collected, and calls were made to all 50 
states. Our sampling approach included randomly contacting potential 
respondents using both landline and cell phone telephone numbers. Using 
these two sampling frames provided us with a more comprehensive 
coverage of adult cell phone users. 

Because we followed a probability procedure based on random selections, 
our sample is only one of a large number of samples that we might have 
drawn. Since each sample could have provided different estimates, we 
express our confidence in the precision of our particular sample's 
results as a 95 percent confidence interval. This is the interval that 
would contain the actual population value for 95 percent of the samples 
we could have drawn. As a result, we are 95 percent confident that each 
of the confidence intervals in this report will include the true values 
in the study population. Each sampled adult was subsequently weighted 
in the analysis to account statistically for all the adult cell phone 
users of the population. The final weight applied to each responding 
adult cell phone user included an adjustment for the overlap in the two 
sampling frames, a raking adjustment to align the weighted sample to 
the known population distributions from the 2009 supplement of the U.S. 
Census Bureau's Current Population Survey and the Centers for Disease 
Control's 2008 National Health Interview Survey, and an expansion 
weight to ensure the total number of weighted adults represent an 
estimated adult population eligible for this study.[Footnote 32] 

Telephone surveys require assumptions about the disposition of 
noncontacted sample households that meet certain standards. These 
assumptions affect the response rate calculation. For this survey the 
response rate was calculated using the American Association of Public 
Opinion Research (AAPOR) Response Rate 3. Based on these assumptions, 
the response rate for the survey was 32 percent; however, the response 
rate could be lower if different assumptions had been made and might 
also be different if calculated using a different method. We used 
random digit dial (RDD) sampling frames that include both listed and 
unlisted landline numbers from working blocks of numbers in the United 
States. The RDD sampling frame approach cannot provide any coverage of 
the increasing number of cell-phone-only households and limited 
coverage of cell-phone-mostly households (i.e., households that receive 
most of their calls on cell phones in spite of having a landline). 
Because of the importance of reaching such households for this survey 
about wireless phone service, we also used an RDD cell phone sampling 
frame. The RDD cell phone sampling frame was randomly generated from 
blocks of phone numbers that are dedicated to cellular service. About 
43 percent of the completed interviews were from the RDD cell phone 
sample. 

Because many households contain more than one potential respondent, 
obtaining an unbiased sample from an RDD frame of landline numbers 
requires interviewing a randomly selected respondent from among all 
potential respondents within the sampled household (as opposed to 
always interviewing the individual who initially answers the phone). We 
obtained an unbiased sample by using the most recent birthday method, 
in which the interviewer asks to speak to the household member aged 18 
or older with a wireless phone who had the most recent birthday. If the 
respondent who was identified as the member of the household with the 
most recent birthday was unavailable to talk and asked to schedule a 
callback, the call representative recorded the person's name and 
preferred telephone number for the callback. There were also cases when 
a respondent from the cell phone sample asked to be called back on his 
or her landline. These respondents, if they completed the survey, were 
considered a completed interview from the cell phone sample. There were 
no respondent selection criteria for the cell phone sample; each number 
dialed from the cell phone sample was assumed to be a cell phone 
number, and each cell phone was assumed to have only one possible 
respondent to contact. 

The results of this survey reflect wireless phone users' experience 
with their current or most recent wireless phone service from the 
beginning of 2008 through the time they were surveyed. Not all 
questions were asked of all respondents. For example, questions about 
the prevalence of billing problems were asked only of respondents who 
indicated they were solely or jointly responsible for paying for their 
service. Additionally, satisfaction with wireless coverage for 
particular locations (i.e. at home, at work, and in a vehicle) was 
calculated only among respondents who indicated they used their 
wireless phone service in those locations. 

To identify the type and nature of problems consumers have experienced 
in recent years with their wireless phone service, we interviewed 
officials from the Federal Communications Commission (FCC), consumer 
organizations,[Footnote 33] national organizations that represent state 
agency officials,[Footnote 34] and state agency officials from three 
selected states--California, Nebraska, and West Virginia--representing 
utility commissions, offices of consumer advocates, and offices of 
attorneys general. We selected these states based on their various 
geography, populations, and region, and their varying approaches to 
providing wireless phone service oversight based on information 
obtained from national organizations representing state agency 
officials. We also interviewed officials from the four major wireless 
carriers,[Footnote 35] two selected smaller carriers that serve mostly 
rural areas,[Footnote 36] and wireless industry associations.[Footnote 
37] In addition, we reviewed documents obtained from some of these 
sources and FCC's recent quarterly reports about consumer complaints. 
We also used the information obtained from these stakeholders to 
develop some of the questions in the consumer survey. 

To determine how FCC addresses consumer complaints, we interviewed FCC 
officials about these activities and reviewed related documentation 
obtained from these officials. We also reviewed relevant laws, 
regulations, and procedures, as well as FCC's quarterly complaint 
reports, strategic plan, and budget with performance goals and 
measures. In addition, we reviewed the Government Performance and 
Results Act of 1993 requirements and our prior recommendations on 
performance goals and measures and determined whether FCC's efforts to 
measure the performance of its consumer assistance efforts are 
consistent with these requirements and recommendations. 

[End of section] 

Appendix II: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Mark Goldstein, (202) 512-6670 or goldsteinm@gao.gov: 

Staff Acknowledgments: 

In addition to the individual named above, Judy Guilliams-Tapia, 
Assistant Director; James Ashley; Scott Behen; Nancy Boardman; Andrew 
Huddleston; Eric Hudson; Ophelia Robinson; Andrew Stavisky; and Mindi 
Weisenbloom made key contributions to this testimony. 

[End of section] 

Footnotes: 

[1] For the purposes of this report, the term wireless phone service 
includes the provision of wireless phone service by cellular, broadband 
personal communications service, and digital specialized mobile radio 
carriers. Federal law and FCC regulations refer to wireless phone 
service as "commercial mobile service" or "commercial mobile radio 
service." This service may generally be referred to as wireless phone 
service, mobile phone service, or cellular (or cell) phone service 
interchangeably. 

[2] CTIA-The Wireless Association (CTIA), a nonprofit membership 
organization representing all sectors of wireless communications, 
estimated there were 270.3 million wireless phone service subscribers 
in the United States as of December 2008. CTIA, since 1985, has 
surveyed its members semi-annually about their subscriber numbers. 
Industry data count a subscriber as any person using a wireless phone 
under a paid subscription. Because an individual could have more than 
one wireless phone, and thus more than one subscription, the number of 
wireless phone service users would be smaller than the number of 
subscribers. 

[3] The Centers for Disease Control's National Center for Health 
Statistics estimated that as of December 2008, about 20 percent of 
American households had only wireless phones and another 15 percent 
that also had landlines received all or most calls on wireless phones. 

[4] 47 U.S.C. § 332(c). FCC was given the authority to refrain from 
applying certain provisions of the Communications Act of 1934 to 
wireless carriers that it found to be unnecessary under specific 
statutory criteria. For example, FCC did not apply provisions that 
restricted market entry or exit. 

[5] 47 C.F.R. § 20.15(a). Section 201(b) of the Communications Act of 
1934 requires just and reasonable rates and 202(a) prohibits rates that 
are unreasonably discriminatory. 47 U.S.C. §§ 201, 202. A common 
carrier, such as a telephone company, provides communications services 
for hire to the public. 

[6] 47 C.F.R. § § 1.711-1.736. 

[7] See 47 U.S.C. § 332(c)(3)(A). The House Committee Report on the 
Omnibus Budget Reconciliation Act of 1993, in reference to section 
332(c)(3)(A), explained that "other terms and conditions" of wireless 
service, which are regulated by the states, "include such matters as 
customer billing information and practices and billing disputes and 
other consumer protection matters." H.R. Rep. No. 103-111 (1993). Under 
§ 332(c)(3)(A) states are preempted from regulating rates and market 
entry but are not precluded from regulating the other terms and 
conditions of service. 

[8] The response rate was calculated as 32 percent using a survey 
research industry accepted method; however, since response rates can be 
calculated in other ways, the response rate could be different. We use 
the terms "user" and "consumer" in our report. "User" refers 
specifically to the population sampled for our survey, while "consumer" 
is used more generally. 

[9] We selected these states based on their various geography, 
populations, and regions, and their varying approaches to providing 
wireless phone service oversight based on information obtained from 
national organizations representing state agency officials. 

[10] Estimates we present based on our survey results have a margin of 
error of less than 5 percent unless otherwise noted. 

[11] The stakeholders we interviewed represent consumer organizations, 
state agencies in selected states, national organizations that 
represent state officials, wireless carriers, industry associations, 
and FCC. 

[12] Unsolicited telemarketing on wireless phones was also cited as a 
key area of consumer concern by the stakeholders we interviewed. 
Congress passed the Telecommunications Consumer Protection Act (TCPA), 
as well as the Controlling the Assault of Non-Solicited Pornography and 
Marketing Act (CANSPAM), to protect consumers against unsolicited 
telemarketing. Because such problems generally deal with telemarketers, 
not the services provided by wireless carriers, we did not examine this 
issue within the scope of our review. However, from our survey, we 
estimate that unsolicited calls or text messages to users' wireless 
phones are not a problem at all for 48 percent of wireless phone users, 
a little problem for 24 percent, somewhat of a problem for 10 percent, 
and a moderate or major problem for 17 percent. 

[13] We estimate that about 83 percent of wireless users are 
responsible for paying for their wireless phone service. Respondents 
were asked about the extent of such billing problems since the 
beginning of 2008. 

[14] We estimate that about 44 percent of wireless users contacted 
customer service about a problem since the beginning of 2008. 

[15] We estimate that about 19 percent of wireless users wanted to 
switch carriers since the beginning of 2008 but did not do so. The 42 
percent of these wireless phone users who wanted to switch but did not 
because of the early termination fee has a margin of error of 7.4 
percent. Additionally, among the wireless users who did not indicate 
they were satisfied with the terms of their wireless phone service, we 
estimate that 25 percent were not satisfied because of early 
termination fees. Wireless users were asked about their satisfaction 
with the terms of their service in general, not specifically since the 
beginning of 2008. The margin of error for the estimate of wireless 
phone users that were not satisfied with the terms of their service 
because of early termination fees is 6.7 percent. 

[16] In addition, in 2003, the industry adopted a voluntary code that 
includes a number of requirements carriers that sign the code agree to 
abide by. These requirements include disclosing to consumers at the 
point of sale and on their Web sites certain service terms and rates, 
providing a 14-day trial period before customers must commit to 
contracts, providing access to customer service, and separately 
identifying certain fees and charges on customers' bills, among other 
requirements. Carriers submit information annually to CTIA for review 
to demonstrate compliance with the code. 

[17] In addition to addressing informal complaints, FCC also assists 
wireless consumers through other outreach and education efforts, such 
as answering consumer inquiries and publishing fact sheets about 
wireless phone service issues and complaints. The information presented 
here represents a description of FCC's process for handling informal 
consumer complaints. The agency also has a formal complaint process, 
and consumers may file formal complaints if they are not satisfied with 
the results of filing an informal complaint. However, there is a cost 
for filing a formal complaint, the process for doing so is similar to a 
court proceeding, and it is governed by specific rules about what 
information must be submitted. According to FCC, the formal complaint 
process is typically used by corporations, not consumers, and FCC has 
held only one proceeding in response to a consumer's formal wireless 
complaint within the past 5 years. 

[18] In addition to wireless complaints, FCC reported receiving 
complaints about wireline services, cable and satellite services, and 
television and radio broadcasting. To be considered a complaint by FCC, 
a consumer's contact must identify a particular entity under FCC's 
jurisdiction, allege harm or injury, and seek relief. Other consumer 
contacts seeking information about matters under FCC's jurisdiction are 
inquiries. 

[19] FCC reports quarterly on the number and types of consumer 
complaints it receives. Although the agency includes complaint totals 
in these reports, FCC officials explained that the figures do not 
represent the total number of complaints received--only the totals of 
the top categories reported. We are conducting an analysis of FCC's 
complaint data that we intend to report on at a later date. FCC also 
reported receiving over 42,000 wireless complaints in 2008 about 
unsolicited telemarketing. 

[20] Service-related issues could include problems related to call 
quality, coverage, and roaming. 

[21] In addition to addressing complaints, FCC also assists wireless 
consumers through other outreach and education efforts, such as 
answering consumer inquiries and publishing fact sheets about wireless 
phone service issues and complaints. 

[22] According to FCC officials, if the response is not sufficient, FCC 
contacts the carrier again. FCC may also close a complaint for other 
reasons and not serve it to a carrier, such as if a consumer does not 
submit complete information with the complaint, if the complaint is not 
related to an issue within FCC's jurisdiction, if the consumer 
withdraws the complaint, or if FCC rejects the complaint because it is 
invalid, incomplete, a duplicate, a false submission, or submitted on 
the wrong form, among other reasons. According to FCC officials, a 
valid complaint that can be served to a carrier must identify a 
particular carrier, allege harm, and seek relief. 

[23] The mediation process described here is informal and conducted by 
FCC's Consumer and Governmental Affairs Bureau. FCC officials told us 
that the agency's Enforcement Bureau has a separate formal mediation 
process that handles resolving complaints by market participants, 
entities, or organizations against common carriers. 

[24] This act is the centerpiece of a statutory framework that Congress 
put in place during the 1990s to help resolve the long-standing 
management problems that have undermined the federal government's 
efficiency and effectiveness and to provide greater accountability for 
results. See GAO, Results-Oriented Government: GPRA Has Established a 
Solid Foundation for Achieving Greater Results, [hyperlink, 
http://www.gao.gov/products/GAO-04-38] (Washington, D.C.: Mar. 10, 
2004). 

[25] 31 U.S.C. § 1115. 

[26] This goal has a separate measure for responding to TCPA-related 
complaints (junk fax and do-not-call list complaints) within 20 days. 

[27] For this subgoal, FCC does have a measure to inform consumers with 
TCPA-related complaints about the status of their complaints within 20 
days and to refer all such eligible complaints to the Enforcement 
Bureau. 

[28] FCC officials told us they do take steps to review the quality of 
their complaint handling efforts internally, such as having supervisors 
review complaints and monitor staff performance. 

[29] An agency's complaint-handling effort may lead to various 
resolution outcomes for the consumer. For example, we reported that the 
Office of the Comptroller of the Currency's process for resolving 
consumers' complaints about banks could lead to the agency providing 
the consumer with additional information, a complaint being withdrawn 
or tabled because of litigation, or the agency determining that the 
bank did, or did not, make an error. See GAO, OCC Consumer Assistance: 
Process Is Similar to That of Other Regulators but Could Be Improved by 
Enhanced Outreach, [hyperlink, http://www.gao.gov/products/GAO-06-293] 
(Washington, D.C.: Feb. 23, 2006). 

[30] FCC does track its closures of consumer complaints and the amount 
of money that is refunded to consumers as a result of its complaint 
handling efforts. 

[31] We have identified inadequate performance management practices as 
a recurring problem in our recent reviews of FCC programs. 
Specifically, we reported in March 2009 that FCC's E-rate program for 
universal service lacked performance goals and adequate performance 
measures; in June 2008 that the high-cost universal service program 
also lacked performance goals and measures; in February 2008 that FCC's 
enforcement efforts lacked measurable goals and related performance 
measures, as well as management tools to fully measure outcomes; and in 
April 2006 that FCC's efforts to address junk fax complaints lacked 
long-term and annual goals for monitoring and enforcement, as well as 
analysis needed to demonstrate the effectiveness of current enforcement 
measures. See GAO, Telecommunications: Long-Term Strategic Vision Would 
Help Ensure Targeting of E-rate Funds to Highest-Priority Uses, 
[hyperlink, http://www.gao.gov/products/GAO-09-253] (Washington, D.C.: 
Mar. 27, 2009); Telecommunications: FCC Needs to Improve Performance 
Management and Strengthen Oversight of the High-Cost Program, 
[hyperlink, http://www.gao.gov/products/GAO-08-633] (Washington, D.C.: 
June 13, 2008); Telecommunications: FCC Has Made Some Progress in the 
Management of its Enforcement Program but Faces Limitations, and 
Additional Actions Are Needed, [hyperlink, 
http://www.gao.gov/products/GAO-08-125] (Washington, D.C.: Feb. 15, 
2008); and Telecommunications: Weaknesses in Procedures and Performance 
Management Hinder Junk Fax Enforcement, [hyperlink, 
http://www.gao.gov/products/GAO-06-425] (Washington, D.C.: Apr. 5, 
2006). 

[32] U.S. Census Bureau, Current Population Survey: March 2008 Annual 
Social and Economic Supplement (Washington, D.C.: Feb. 5, 2009); S.J. 
Blumberg and J.V. Luke, Wireless substitution: Early release of 
estimates from the National Health Interview Survey, January-June 2008, 
Centers for Disease Control, National Center for Health Statistics 
(Available from: [hyperlink, http://www.cdc.gov/nchs/nhis.htm].: Dec. 
17, 2008). 

[33] We met with the national organizations AARP, Consumers Union, and 
the Council of Better Business Bureaus. We also met with The Utility 
Reform Network and Consumer Action in California. 

[34] The National Association of Attorneys General, the National 
Association of Regulatory Utility Commissioners, and the National 
Association of State Utility Consumer Advocates. 

[35] AT&T, Sprint Nextel, T-Mobile, and Verizon Wireless. 

[36] The two rural carriers, nTelos and Viaero, were selected because 
they operated in two of the states from which we interviewed state 
officials based on referrals from those officials. 

[37] CTIA-The Wireless Association and the Rural Cellular Association. 

[End of section] 

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