Consumer Reports’ best cell phone deals

By the editors

updated 10:47 a.m. ET Jan. 4, 2008

Cell-phone service seems to stubbornly resist improvement. The Annual Survey of Cell-Phone Service conducted by the Consumer Reports National Research Center found that fewer than half of respondents were completely or very satisfied with their service. That makes cell service among the lower-rated services we survey, as it has been for the past six years.

S till, there are bright spots. Verizon and Alltel scored better than other providers this year, as they have in the past. T-Mobile matched satisfaction rates for Verizon in almost all the cities we surveyed. And T-Mobile plans generally offer more for the money than those of Verizon and Alltel.

Meanwhile, cell carriers are getting more consumer-friendly. Last fall, all of our rated service providers pledged to join Verizon and prorate their hefty $150 to $200 early-termination fees. Holdouts also said they would join Alltel and T-Mobile and end their heavy-handed practice of mandatory contract extensions when you make changes to your service plan.

Mandatory contract extensions were one of the top two complaints of survey respondents, tied with high costs for service. More than 60 percent of respondents who made changes to their cell-phone service plan in the past year said they were required to extend their contract as part of the deal. That number might understate the problem because some carriers haven't always been up front with customers about such extensions, according to allegations in recent legal filings.

In the past five years, consumer advocates such as the Foundation for Taxpayer and Consumer Rights, in Santa Monica, Calif., and class-action lawyers have filed more than 100 lawsuits coast to coast, according to an analysis by Thomson West, a legal-information-services firm. The cases involve issues such as early-termination fees, calculation of airtime, arbitration requirements, class-action prohibitions, rebates and other contract provisions.

One important outcome was a spate of recent court decisions in several states that struck down as "unconscionable" cell-phone service contract provisions that had forced customers to arbitrate disputes individually and prohibited them from banding together into class actions. "In the last 18 months, there has been a sea change and a run of court decisions favoring consumers," says Paul Bland, staff attorney with Public Justice, a nonprofit public-interest law firm in Washington, D.C., and an expert on class-action bans in consumer contracts.

The proposed settlement in another California suit might signal new flexibility about taking your phone with you when you switch carriers. Most phones in the U.S. are locked to a specific carrier. But Sprint has agreed to provide departing customers with a code that unlocks their phone, with the promise of making it usable with other compatible carriers.

Also, in late November Verizon announced that it will by the end of 2008 provide customers the option to use, on its nationwide wireless network, wireless devices, software and applications offered by other companies which meet Verizon's technical specifications. Advocates at Consumers Union , the nonprofit publisher of Consumer Reports , said the news was encouraging but its full impact will not be clear until more details are available.

Congress has joined in and ratcheted up pressure on the industry with public hearings and the threat of consumer-rights legislation. "People want their cell service to work, they believe it's a necessary part of life, and they don't want to get ripped off," says Sen. Amy Klobuchar, D-Minn. Klobuchar has introduced legislation that would require prorated cell-phone service termination fees and public disclosure of the incidence of dropped calls and coverage gaps by location.

Prospects for the bill were unclear as we went to press. But a day before hearings on the legislation in October, AT&T announced that it would prorate its fees beginning in early 2008. Other carriers began easing up some restrictions last summer and fall, albeit modestly.

Despite such positive developments, you still need to take charge of fixing problems with your cell-phone service. Here are some steps to consider.

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