In 2008, the Arizona Legislature will consider whether to enact the Cellphone Users Bill of Rights to regulate wireless phone service in the state. Provisions include a ban on wireless contracts with an initial term over one year and several letting consumers rescind their contracts more easily.
The legislation was inspired by a legislators disappointing experience with his wireless phone company. Supporters argue that wireless providers can comply with the law without significant costs. But the Cellphone Users Bill of Rights will not help consumers. The deregulation of wireless service by the U.S. Congress in 1993 has brought consumers a 40 percent price drop in six years, better and less expensive equipment, and an amazing array of service options.
Wireless companies must design their contracts to protect their investments in new networks. More regulation is likely to raise prices, even if the effect is hard to see, because, with the demand for nationwide pricing, it would not be isolated to one state. Even with that demand, nationwide pricing might not be offered in Arizona because wireless carriers would be forced to comply with Arizona regulations. But hidden costs are still real. The bill is likely to reduce consumer choice and lead to higher prices and less investment in new networks.
Legislators should recognize that competition gives consumers the choices they need. Existing laws already control fraud and deception and apply to every business, including wireless carriers. Instead of proposing legislation that could stifle competitive forces, legislators should encourage competition by reducing regulatory delays such as those involved in siting cell phone towers.