June 2007
Wring Tone
By Todd Spencer
We’ve all been there; at the mercy of a money-grubbing wireless provider. With telecom the least regulated industry in the country, it’s no surprise that cell phone service complaints are the nation’s number one consumer grievance. So why are the feds dropping the call?
At the end of his final few nightly news shows, Dan Rather — ever-cognizant of the value of a solid sound bite — urged viewers to “get the full story” on the day’s news by reading a newspaper. Seemingly embarrassed by what TV journalism had become in his lifetime, Rather didn’t want viewers to rely on his newscast alone for information. It was a gesture that oozed integrity and probably cost him gobs of political currency with his bosses who eventually threw the old-school newsman under the bus.
The sad truth is that, these days, TV news’ traditional competitor, print media — including the dailies that Rather recommended — isn’t “what it used to be” either. As print fights CNN and Fox for eyeballs and becomes increasingly beholden to earning a profit for its traded-on-Wall Street corporate owners, any guarding of democracy’s henhouse — what newspapers used to do best — is now often incidental.
Still, no supposed news medium is more tenaciously vacuous than local TV news, which has sunken to scare tactics (“Don’t let your kids die in a house fire! Tonight at eleven!”), regularly filling its nightly “news” hole with numbing coverage of homegrown bloodshed, warehouse fires and high-speed car chases to appeal to our basest of rubber-necker instincts.
With the stamping-out of investigative reporting, the slave-to-fluff state of American journalism in general and the pandering of local TV news in particular, a series of jaw-droppingly good reports out of one such local station — San Francisco’s CBS-5, one of several actually owned and operated by CBS itself — has made waves nationally (you might have caught reports based directly on the series on the Yahoo! homepage last month). The series, “Wireless Runaround,” tells how cell phone carriers like Sprint, Cingular, Verizon and T-Mobile are bullying and ignoring customers with legal impunity — and it’s shaken up both the California state government and the giant telecommunication companies.
The story, uncovered by veteran consumer reporter Jeanette Pavini and her senior producer Craig Franklin, focuses on consumers who, charged with illegal bills in the tens of thousands of dollars, are at the mercy of their corporate tormentors. One subplot is the enormous amount of money these international wireless companies have put into the pockets of California legislators, like Governor Arnold Schwarzenegger, to keep California — a progressive battleground state — regulation-free, thus ensuring the continued abuse and gouging of customers from coast to coast. Another plot twist is the fact that Pavini and Franklin are hardly political muckrakers — or, in the traditional sense, even investigative reporters. While the duo’s investigations have sent shockwaves across a multi-billion dollar global industry, it all began from a simple inquiry on the part of Pavini, a consumer reporter billed on her station’s website as someone who “will help you get the most out of your dollar.”
The arc of the first report in the series is this: The cell phone of a San Francisco woman, recent college graduate Wendy Nguyen, is stolen at a downtown restaurant the night before she flies to Vietnam for a three-week vacation. When she returns home, she notices her phone missing, reports it to Cingular, and is informed that $26,000 in calls to Central America have been made from her line.
According to her contract, she’s liable for the fraud because the charges were incurred before she reported the phone missing. After countless calls to the company, she finally reaches a supervisor who suggests she file for bankruptcy. Nguyen spends five months fighting the charge — as late fees, interest fees and threats from collection agents mount.
It was our pleasure to sit down with Pavini and Franklin in the CBS-5 studios to talk about their Edward R. Murrow Award-winning investigative series, their behind-the-scenes take on the cell phone giants and their disillusionment over the little-reported, frightening degree to which corporations hold sway over our federal and state governments.
When did the first report in your series air?
Jeanette Pavini: It goes back to the Wendy Nguyen case.
Craig Franklin: She contacted us in mid-summer 2005, and when we started getting into her story, we quickly found out that there was virtually no regulation of the cell phone industry in the United States. And cell phone service has the largest amount of consumer complaints of any industry in the country.
What are the most common complaints that you receive about cell phone carriers?
Jeanette: A lot of it is frustration with customer service, and that they’re not being taken care of. You know, you can debate something with them on the phone about a bill and they’re like, “OK, well, that was nice to hear. You still owe us.”
Craig: California regulates tattoo parlors, psychics, vending machines and the big utilities, but not cell phones. When you get the amount of emails Jeanette has gotten, and the overwhelming complaints that both the [Public Utilities Commission, which regulates other utilities in California but has no clout with cellular service providers] and the Better Business Bureau have gotten, it’s just — it’s not hard to see that something wrong is going on.
Jeanette: And they fight regulation every step of the way. “It’ll raise the prices.”
Craig: “It’ll hurt competition. It’ll take away jobs in this state if you do this.” But how is that possible? The amount of money the wireless companies are making is going up by tens of billions of dollars every year. So, how is that going to be affected by simply offering some additional protections to consumers? Make larger print, for example. Make understandable contracts. Thirty-day return policy. Things like that.
Could you give us some insights as to what you’ve learned about who has more power or sway with the elected officials? Is it the voters, or is it the campaign contributors?
Jeanette: I’d say that on my research of this particular topic of the wireless industry, it seems that the facts lean toward the industry having a lot of political power. But one thing I have heard from politicians that we spoke with is that when people do send emails and when they write letters — when they get enough — they do take notice.
Craig: It is eye opening though, to walk into a state meeting on wireless regulation and see a fairly packed auditorium and just a small group of consumer advocates. The rest, as far as we can tell or as we’ve been told, are lobbyists and wireless representatives. Consumers are clearly outgunned. And so are the members of the media.
Jeanette: And in every case that we’ve reported on, consumers are not helped until we get involved.
Meaning until it’s a PR concern.
Jeanette: The minute I call about something that someone has been battling [on their own] for six months, it’s taken care of that day. Sometimes within an hour.
How do you feel when a corporation suddenly bends over backward to help someone only once they’ve gone to the media?
Jeanette: Oh, I can answer that. I’m disgusted by it. I am disgusted by the fact that I’m on the phone with people who are facing bankruptcy, who — one woman couldn’t get an apartment because her credit was so screwed up by something her wireless company had done to her and reported to her credit — how their lives are devastated and these companies do nothing, nothing at all. And I make one phone call and suddenly it was an “oversight.” It infuriates me. I am disgusted by it. They should be ashamed of themselves. They really should. How dare they?!
In “Wireless Runaround” you show stark examples of how Governor Schwarzenegger serves special interests that contributed to his party. SB440 — the bill that was inspired by your first “Wireless Runaround” report — was vetoed by the governor.
Craig: And [the democrat who introduced the legislation] was actually surprised that that bill passed both houses, because nothing had ever passed for cell phone regulation before in the legislature — most of it never gets out of committee. And then the light bulb went off and it’s like, “The governor’s going to veto it.” She said it was mostly Republicans who voted for it because they knew that they could safely vote for consumer protection because the governor would take the hit for it.
Jeanette: In fact, that was something that our sources told us that we didn’t include in the story.
So Republicans got on board to look good to voters come election time.
Jeanette: They could be comforted by the fact that the governor was the keynote speaker [at the cell phone industry convention] while this bill was on his desk.
Do you think the average voter understands the degree to which elected officials serve corporations over the non-monetized interests of the man on the street; the Wendy Nguyens of the world?
Craig: Professionally, I guess we kind of expect it. Personally I’m still always shocked because I’ve got sort of a Mr. Smith Goes to Washington kind of ideal of people wanting to get into public life to make a difference. And I like to think that’s the preponderance of what’s going on and maybe that’s how people start out… but I don’t think anybody even has any real idea of how much influence is being peddled.
Jeanette: And I don’t know if it’s that they’re so much shocked by it as much as it’s that they feel, what can they do?
Craig: Yeah, and again, there are people who do look at campaign contributions in great detail, but I’m not sure anybody has a real handle on how corrosive it really is. That should be one of the top three things we should be reporting on all the time, and yet, it doesn’t get reported on, I don’t think, very often.
How much extra money does staying deregulated earn the industry every year?
Jeanette: In just one way, if you look on the cell phone contracts, they say you’re liable for charges on a stolen phone up until the day you call. Now, if I read my contract, I’m going assume that that’s the truth, and pay whatever they ask, if I can.
And you’re saying that it’s not the truth.
Jeanette: I’m saying that it’s not the truth, it’s not the law.
Craig: It’s not the law. Their contracts are not in accordance with the law. And that’s what we didn’t realize until months and months into it.
So there is a law out there, but the Telecom industry wasn’t following it.
Craig: They cite [the existing law protecting consumers from fraudulent charges made from stolen cell phones] as a reason, as did Governor Schwarzenegger, as to why we didn’t need SB440. And yet their contract language, as I read it, is written very cleverly so that they can interpret [the current law] either way. This loophole that they have created to drive their contracts through… it’s not just as simple as they’re breaking the law. We think sometimes they are breaking the law, but it’s a very clever manipulation.
Jeanette: And that’s why SB440 would have been helpful. It would have clarified that existing law and it would have actually enforced it.
The namesake of the award you received for this investigation, Edward R. Murrow, worked in a very different environment than you do now.
Jeanette: In regards to specifically this two-year consumer investigation that we’ve done, I have to honestly say that we’ve had incredible support.
Craig: Yeah, I think, I mean one reason I came over to CBS-5 is because they still seemed to have a lot of that old-fashioned — I hate to call it “old-fashioned” — but old-fashioned philosophy that the way to win viewers and help the bottom line is through actual reporting. But, you asked about changes. One that I’ve at least heard about — I haven’t experienced directly — is that for many, many years the rule in investigative reporting was, “Don’t lose the lawsuit.” Nowadays, what I hear — and I haven’t experienced this directly, either — it’s, “Don’t get sued.” And that’s a big difference.
If the wireless industry has the power to keep itself from being regulated — and it does, so far — would you be surprised if it were also exercising its power to keep health and safety concerns from being addressed, a la the tobacco industry? I’m talking cell phone base stations being placed in dense population areas, radiation, lowering sperm counts, brain cancer, stuff like that.
Jeanette: Well, there’s “Wireless Runaround 3!” You know, nothing would surprise me after the things that we’ve heard and seen. It would be devastating. I will say there were several bills that were on the state senate for cell phones, and the industry was lobbying hard against all of them except the one that says that in 2008, you have to drive hands-free. And that’s gonna make the cell phone industry a lot of money because now everyone has to go out and buy that device, and that measure was signed by Governor Schwarzenegger.
Craig: It wouldn’t be beyond belief that they would have the potential power, money and influence to affect [scientific] studies or the information getting out.
Jeanette: We’re not saying that factually. But it wouldn’t surprise us.
Todd Spencer has covered the media for Salon and NPR’s “On The Media.”
For Health Hazards, Please Hold
Studies on the safety of cell phones sponsored by Wireless carriers and cell phone manufacturers have been “inconclusive.” Critics claim the results of those studies are distorted, but the industry, its trade association — the Cellular Telecommunications Industry Association (CTIA) — and the FCC (a Republican-controlled pro-business regulatory body heavily lobbied by CTIA) contend that since there’s no conclusive evidence, cell phones must therefore be safe.
CNET, a leading media source on all things tech and “gadget,” admits that “the jury is still out” when it comes to health risks posed by cell phone use. But independent research and anecdotal information not hinged on the political pressure of a multi-billion dollar industry offer an alternative view:
• For men, carrying a cell phone or wireless PDA on a belt or in a pocket could potentially reduce sperm counts by as much as 30 percent. (ACA, Hungarian research)
• The UK’s Chief Medical Officers strongly advise children under the age of 16 to restrict cell phone use to essential purposes only and keep all calls short.
• Teenagers talk on cell phones an average of 2,600 minutes each month. (Safe Wireless Initiative study)
• Using a cell phone for more than 2,000 hours in a lifetime raises the risk of getting a type of brain tumor called a glioma by 40 to 270 percent on the side of the head preferred for using the phone. The risk was highest among people under the age of 20. (Study conducted by a collection of researchers from several universities, coordinated by the Radiation and Nuclear Safety Authority in Finland and published in the International Journal of Cancer in February, 2007. This is considered the second study firmly correlating cell phone usage with an increased risk of developing certain brain tumors).
• Based on levels of adult cell phone use in the ’90s, Dr. George Carlo, a cell phone researcher and industry whistleblower, predicts 40,000 to 50,000 new cases of brain and eye cancer caused by mobile phones each year worldwide. By 2010, he estimates the number to be near half a million cases.
Many of those concerned about cell phone safety believe that pending class action lawsuits against the industry will reveal a major scandal, a la Big Tobacco in the 1980s. In the meantime, we talk on our phones until our ears buzz, hoping the cumulative effects of the radiation on our bodies won’t cause a health disaster just around the corner, or a few years down the road.
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