Dealing with that $30,000 phone bill ... without regulation

There is a "mounting dossier" of complaints to communications regulators concerning unexpectedly high mobile phone bills, reports the Australian Financial Review today.

It's hard to be too sympathetic with somebody who couldn't figure out they had spent nearly $30,000 in a single month - they must now have an extraordinary library of downloaded ring tones.

But this surge in complaints is partly due to technological convergence.  As mobile phones increasingly provide the same sort of internet connection that consumers are used to at home, those consumers expect it to be just as accessibly priced.

Unexpectedly high bills were the subject of a high-profile Australian Communications Authority investigation in 2004.  The services the ACA fingered as culprits less than three years ago, MMS and subscription services, are strikingly different from those now.  In 2007, it is mobile data and download services on 3G handsets that are at fault.

The industry ombudsman says that complaints over high bills have increased thirty percent over the last year.

Mobile providers need to develop processes to deal with the high account activity that leads to these extraordinarily high bills.  Neither the consumer nor the firm is helped by the sudden appearance of a multi-thousand dollar debt.

Firms offering home broadband services have dealt with the unexpectedly high bill problem before.  Early plans punished consumers with high "excess" data prices, but now most firms have structured their prices to "shape" data to a lower speed once consumers reach a certain limit.

This is a model that the mobile industry may be able to adopt.  Indeed, some major mobile carriers apply hard caps to a range of premium services.

Furthermore, in the United States, the iPhone/ AT&T deal offers unlimited data plans, which may indicate that the price of mobile data is trending towards zero.  Certainly, in Australia mobile data is now much cheaper than it was when the only technology available was GPRS on a standard GSM phone.  And some Blackberry plans offer unlimited email data already.

Horror stories like those in the AFR today tend to encourage regulatory responses.  In this case, legislators should be wary of knee-jerk reactions - mandating specific pricing models for high data usage could raise prices for consumers across the board.

Instead, the phenomenon of unexpectedly high mobile bills simply illustrates how the communications industry needs to adjust their business models to changes in technology and consumer demand.