January 8, 2008

Committee
State House
Phoenix, AZ 85007

Dear Legislator,

I write today to warn you of the potential dangers inherent in the legislative push to regulate the thriving wireless industry with the proposed “Cellphone User’s Bill of Rights,” SB 1010.  Like much legislation, the intentions are good, but the result would be the opposite.  It is for that reason I urge you to oppose SB 1010.

The intention of the bill is to free consumers from what is determined to “unfair” contract aspects that harm consumers, but the reality of the bill is it would do just the reverse. 

Cellphone service packages are as affordable as they are because government has not interfered with them.  By limiting the length of a contract arbitrarily to one year, the cost to consumers will increase, as will the cost of the phone itself. 

The cost of a cellphone is subsidized significantly by the service provider because of the length of contract; those costs can be recaptured over time.  Without that incentive, attracting customers without a corporate subsidized phone would be difficult and cost consumers significantly more to enter the cellphone market.  Or, if a provider still wanted to provide a subsidized phone, the monthly service fee would have to account for that initial outlay, therefore significantly cost consumers more on a monthly basis.

The fact of the matter is the cellular market is still evolving, and consumers are empowered to help themselves already.  While shopping for service and phones, consumers are free to determine with provider and plan best fits their needs and wants.  No one should enter into a contract with anyone without reading and understanding the terms of that agreement.  That burden is on the consumer before they enter into an agreement and should not be interfered with by government. 

I urge you to oppose SB 1010 on the grounds that the market works best when it’s allowed to work on its own.  Consumers do not need protection from themselves, and the government needn’t interfere with an evolving market.  Allow consumers to educate themselves and act in their own best interest without government infringement in private transactions.

Sincerely,

Derek Hunter
Executive Director,
Media Freedom Project