Dead Zones, Bogus Fees and Dropped Calls

Jane lives and works in Huntington Beach. She uses her cell phone a lot for work and personal calls, but lately, she has found she spends most of her phone time complaining to Cingular, her wireless provider.

"I have many issues with Cingular," says Jane, who asked that her last name not be used for this story. "It's been very frustrating."

Her phone doesn't work in buildings, so she is forced to walk outside to make or receive calls. It cuts out on the 5 freeway near Camp Pendleton, usually during what seems like the most crucial parts of her conversations. That site is remote, but her phone also doesn't work on Beach Boulevard near her home.

There's currently a $36 fee on her phone bill for a problem she says Cingular created. She hasn't fought it, she says, because she doesn't have 30 minutes to waste calling the company. Canceling her service isn't an option because of the hassle getting a new phone number would impose on her work and life.

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According to the California Public Utilities Commission (CPUC), there are thousands of people like Jane across the state. People trapped in bad wireless service contracts for phones that rarely—if ever—work. But now things may change.

Since June 6, the CPUC has been investigating Atlanta-based Cingular. The cause of the investigation: more than 3,000 consumer complaints against Cingular—more than the number of complaints to Cingular's major competitors combined. According to its strongly worded complaint, the commission is trying to determine whether "Cingular's system has inadequate coverage in customers' area of use and insufficient system capacity to carry their calls as needed, contrary to the customers' reasonable expectations."

The state investigation is historic.

"The wireless utility has never been regulated," says Jodi Beebe of the San Diego-based consumer group Utility Consumers' Action Network (UCAN). "We believe the industry should be somewhat regulated, especially since there are so many wireless customers and many of them no longer have land lines."

The reason Cingular service seems so disproportionately bad stems from its heavy initial marketing in the wireless industry. By selling cheaper service to undercut its competitors, Cingular overloaded its network. The end result is that Cingular's claim that customers can "call nationwide at any time"—the entire rationale for owning a cell phone—seems a bitter joke.

"There is a natural imbalance in the knowledge available to Cingular on the one hand, and the knowledge available to the average consumer on the other hand," states the CPUC complaint. "The availability of such information is crucial to the healthy functioning of the telecommunications marketplace."

Translation: Cingular allegedly hid from customers the limits of its service.

Cingular is the second-largest wireless company in the U.S., raking in $14.3 billion in revenue in 2001. Dedication to its 22 million customers nationwide is a constant theme of Cingular's corporate public relations. Sometimes that PR takes on an almost New Age tone, promising that the cell-phone company is "determined to promote the individual to a new level" and suggesting that the company can "create a personal relationship with each of its customers." That relationship, the company's website suggests, is based on the company's role as expert guide: "Cingular's vision is to simplify the wireless experience for its consumer and business customers by offering easy-to-understand, affordable rate plans and excellent customer service."

But complaints to the CPUC and UCAN detail many dozens of instances in which customers signed up for wireless service thinking they were signing up for service that would allow them to place and receive calls at any time and from anywhere within the company's clearly marked "coverage zone" maps. The truth was very different.

"There does not appear to be any point in the chain of Cingular's advertising, marketing and sales that the limitations to coverage and capacity are clearly and conspicuously disclosed," concludes the CPUC complaint. "Cingular makes the implied promise that adequate system coverage and capacity will exist in the subscriber's area of use. This promise is taken back—in some of Cingular's marketing materials—by a fine-print disclaimer of warranty. The limitations of Cingular's system often defeat the customer's reasonable expectations of coverage and capacity."

According to Beebe, who testified before the CPUC on Oct. 23, the consumer group documented 21 instances in which Cingular customers specifically asked if their new cell phone would work where they lived and worked. After being assured that coverage did indeed serve their particular areas, they purchased the phones and service plans, only to find later their phones wouldn't work as promised.

"[T]he service coverage claims were grandiose and extravagant, at times covering high mountainous areas, remote desert locations and even other states," testified Beebe.

When the phones did work, UCAN and the CPUC found customers would often receive busy signals as calls overloaded the Cingular network. "[M]any customers noted that at times, calls to their number were not picked up by voice mail, that some calls terminated in a busy signal, causing friends and family to try their number repeatedly," Beebe testified. "When voice mail did pick up, oftentimes it would take from [half an hour] to 2 hours for the message to appear."

Customers complaining to Cingular often got one of two excuses. First, that the problems stemmed from having a bad phone. Cingular sales associates then allegedly told some customers that the problems would cease once they upgraded to a newer, usually more expensive phone. Both UCAN and the CPUC say the consumers they dealt with insisted upgrading didn't help.

Other times, Cingular simply told customers that problems would disappear once the company finished building new network transmission towers. But Beebe told the CPUC that in 18 instances, Cingular falsely claimed new towers would solve the coverage problems.

Customers who tried to leave Cingular found themselves trapped in draconian contracts, often for two years, forced to pay steep termination fees to get out. In addition, those who bought their phones from Cingular kiosks in shopping malls found they'd have to pay additional termination fees of often $400 or more.

"Customers leave a retail outlet bearing all the risk as to whether the just-purchased service and equipment will actually work in their homes and businesses and on their commute routes," states the CPUC complaint. "To date, the risk does not appear to be adequately disclosed to consumers."

Cingular was "disappointed to learn that the CPUC has decided to initiate an investigation," according to a written statement provided by a Cingular spokesman. The company, which considers 2002 "the Year of the Customer," insists that customer satisfaction is its highest goal. "We have aggressively invested in our network and sought to improve our customer satisfaction with enhanced computer systems, state-of-the-art retail stores, and consumer-friendly policies on contracts and returns."

One new policy, instituted just a couple of weeks before the CPUC began its investigation, is a "No Questions Asked" cancellation policy, giving customers a 15-day grace period after purchase to cancel service without termination fees. The company also insists it will spend nearly a billion dollars this year on its network infrastructure in the western U.S.

Those assurances haven't slowed the CPUC's investigation, which is scheduled to continue into the summer of 2003. Until then, people like Jane will simply have to contend with dropped calls, busy signals and bogus charges.

"I'm very familiar with wireless service," she said. "I sold cellular for 13 years, starting in 1987 when it was very new. But I've never seen anything like this."

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