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AARP Report Examines Switching Costs Among Wireless Providers

Washington, DC –Older Americans are increasingly dependent on their cell phones and other electronic communication devices for basic communication and personal safety. However, for too many, finding the right wireless provider remains a challenging task.

More than a decade ago, Congress focused on the promotion of competition as the fundamental goal of wireless policy. Unfortunately, this policy approach assumes that consumers can and will switch freely among wireless carriers in response to differences in the price and quality of service.

A recent report by AARP’S Public Policy Institute examined the use of switching costs, or costs associated with changing wireless providers, and how they affect consumers. The report comes at a critical time as lawmakers are scheduled to begin hearings looking into consumer wireless issues, including switching costs and industry competition.

“Hidden fees, software that locks phones to a single carrier and complex pricing structures are only a few of the ways wireless providers keep consumers strapped into their plans,” said John Rother, Director of Policy and Strategy at AARP. “The Federal Communications Commission (FCC) should exercise greater oversight in the wireless industry to protect consumer choice in the marketplace and promote competition.”

The AARP report found that national wireless providers have largely ignored requests by the FCC to provide coverage and customer service information. The report also cited statistics by the Better Business Bureau showing cell phone services led consumer complaints for three consecutive years (2004-2006).

AARP maintains that transparency, flexibility and accurate, helpful reporting are the fundamental basics for arming any consumer to make the right choice.. The wireless industry is no different.

“Regulations to prohibit unreasonable and undisclosed fees—along with standards for disclosing coverage information to consumers—will foster competition and allow consumers to make informed choices,” said Rother.

With a cell phone, consumers have more freedom and flexibility to stay connected with family and friends, conduct business, coordinate their increasingly busy schedules, and enhance their own personal safety. Each consumer needs and deserves a marketplace that offers a choice of high quality products at stable, reasonable prices without fraud, deception, and unfair business.

For more information and to view this report please click here.

AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, published bimonthly; AARP Bulletin, our monthly newspaper; AARP Segunda Juventud, our bimonthly magazine in Spanish and English; NRTA Live & Learn, our quarterly newsletter for 50 + educators; and our website, www.aarp.org. AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

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