a

GAO

United States General Accounting Office

Report to the Honorable

Anthony D. Weiner, House of 

Representatives

April 2003 TELECOMMUNICATIONS

FCC Should Include Call 

Quality in Its Annual 

Report on Competition in 

Mobile Phone Services

GAO-03-501
In establishing a regulatory framework for mobile phone services, the 

Congress directed the Federal Communications Commission (FCC) to 

encourage competition among carriers. FCC believes that competition 

enables consumers to choose carriers that offer a desired level of call 

quality and that regulatory action establishing a minimum level of call 

quality would not be beneficial in a competitive environment. The 

Congress requires FCC to report annually on whether or not there is 

effective competition in mobile phone services. While call quality has 

been identified as a factor that affects consumers’ choices of a carrier, 

FCC does not discuss call quality in this report. 

Common Call Quality Problems Associated with Mobile Phones 

Blocked calls

(hills, tunnels, buildings, 

or temporary conditions 

such as weather)

Insufficient capacity

(no vacant frequencies, 

adjacent cell full, etc.)

Dead spots

(cell within service 

area but lacking base 

station coverage)

Lack of coverage

(calls outside of

carrier's service area)

Source: GAO.

To assess the extent to which consumers are experiencing call quality 

problems—such as blocked or dropped calls, insufficient capacity, dead 

spots, or lack of coverage—we included questions on a national survey 

of adult consumers, conducted in November 2002. Our survey indicated 

that about four-fifths of adult mobile phone users were satisfied with 

their service, about one-tenth were dissatisfied, and the remainder 

indifferent. However, we also found that consumers are experiencing 

some call quality problems. For example, we estimate that about onefifth of users were unable to successfully complete 10 percent or more of 

their calls, because their mobile phone network dropped the calls. Only 

limited information on call quality problems is available to the public or 

FCC. 

Interested parties have proposed actions that could provide consumers 

with better information to help them choose a carrier that matches their 

needs or would set industrywide call quality standards for all consumers. 

However, some of the suggested actions could drive up the price of 

service, limit the entry of new carriers, or lead to a reduction of service 

in regions that are technically difficult or costly to serve. The carriers 

themselves say that they are taking actions to improve call quality and 

further regulation is not needed. 

Over the past decade, Americans 

have come to rely increasingly on 

mobile phones to meet their 

business and personal needs. 

However, because of the nature of 

radio transmission and other 

constraints, consumers are not 

always able to complete calls or to 

hear their calls clearly. As reliance 

on mobile phones has increased, 

state officials, consumer groups, 

the media, and others have raised 

concerns about the extent of call 

quality problems. With regard to 

call quality, GAO agreed to 

describe the regulatory framework; 

determine the extent to which 

consumers are experiencing 

problems; and discuss actions for 

improving call quality suggested by 

interested parties. 

GAO recommends that FCC 

include call quality in its mandated 

annual report analyzing whether 

there is effective competition in the 

market for mobile phone services. 

Including call quality in this 

analysis would provide an ongoing 

record to help FCC and the 

Congress determine whether 

market competition is sufficient to 

ensure that carriers are meeting 

consumers’ expectations and 

desires regarding call quality or 

whether further regulatory action is 

needed. In response, FCC stated 

that to, the extent possible, it plans 

to include information related to 

call quality in its future annual 

reports on competition in mobile 

phone services. 

www.gao.gov/cgi-bin/getrpt?GAO-03-501.

To view the full report, including the scope 

and methodology, click on the link above. 

For more information, contact William B. 

Shear at (202) 512-4325 or shearw@gao.gov.

Highlights of GAO-03-501, a report to the 

Honorable Anthony D. Weiner, House of 

Representatives 

April 2003

TELECOMMUNICATIONS 

FCC Should Include Call Quality in its 

Annual Report on Competition in Mobile 

Phone Services 
Page i GAO-03-501 Mobile Phone Call Quality

Contents

Letter 1

Results in Brief 2

Background 5

Under the Regulatory Framework for the Mobile Phone Industry, 

FCC Relies on Competitive Market Forces to Determine Call 

Quality and Has Not Set Specific Quality Standards 11

Concerns Have Been Raised, but Available Data Are Inconclusive on 

Extent of Call Quality Problems 20

Interested Parties Have Suggested Actions for Improving Call 

Quality 30

Conclusions 35

Recommendation for Executive Action 36

Agency Comments 36

Appendixes

Appendix I: Scope and Methodology 38

Appendix II: Results of Consumer Survey on Mobile Phone Service 42

Appendix III: FCC Fact Sheet on Mobile Phone Service 47

Appendix IV: Comments from the Federal Communications Commission 56

Appendix V: Key Contacts and Major Contributors 59

GAO Contacts 59

Staff Acknowledgments 59

Tables Table 1: Consumer Complaints about Mobile Phone Service Filed 

with the California Public Utilities Commission, 

1999-2002 26

Table 2: Mobile Phone Call Quality Problems Based on November 

2002 Consumer Survey 29

Figures Figure 1: Key Components of a Mobile Phone System 6

Figure 2: Estimated Average Number of Minutes of Mobile Phone 

Service Used Per Month in the United States, 1997-2002 9

Figure 3: Common Call Quality Problems Associated with Mobile 

Phones 11

Figure 4: U. S. Market Shares and Annualized Turnover Rates for 

Mobile Phone Service Carriers, Third Quarter, 2002 16

Figure 5: FCC Mobile Phone Consumer Complaints by Category, 

2002 25
Contents

Page ii GAO-03-501 Mobile Phone Call Quality

Figure 6: Overall Customer Satisfaction with Call Quality, 

November 2002 Consumer Survey 28

Abbreviations

CDMA code division multiple access

CTIA Cellular Telecommunications & Internet Association

FCC Federal Communications Commission

FTC Federal Trade Commission

GSM global system for mobile communications

MHz megahertz

NARUC National Association of Regulatory Utility Commissioners

OFTEL Office of Telecommunications

TDMA time division multiple access

This is a work of the U.S. Government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. It may contain copyrighted graphics, images or other materials. 

Permission from the copyright holder may be necessary should you wish to reproduce 

copyrighted materials separately from GAO’s product.
Page 1 GAO-03-501 Mobile Phone Call Quality

United States General Accounting Office

Washington, D.C. 20548

A

April 28, 2003 Letr

The Honorable Anthony D. Weiner

House of Representatives

Dear Mr. Weiner:

Over the past decade, mobile phone service has gone from being a luxury 

item to an everyday part of life.1

 In 2002, over 140 million Americans had 

mobile phone service, and these customers used about 55.5 billion minutes 

of mobile phone service a month.2

 As the public has come to rely more on 

mobile phones for its business and personal needs, concerns have been 

raised by state officials, consumer groups, the media, and others about call 

quality—the ability to make and complete calls with good sound quality.

You asked us to examine several issues related to the regulation and 

assessment of mobile phone call quality. We agreed to (1) describe the 

regulatory framework that exists regarding mobile phone call quality, (2) 

determine the extent to which consumers are experiencing call quality 

problems, and (3) discuss actions for improving call quality suggested by 

interested parties.

To meet these objectives, we reviewed laws and regulations governing the 

mobile phone industry. At the federal level, we spoke to officials at the 

Federal Communications Commission (FCC)—the agency that oversees 

the mobile phone industry—regarding their views on the regulatory 

framework; the extent of problems with call quality, including consumer 

complaints; and potential actions to improve call quality. We contacted 

state public utility commissions to determine how they regulate mobile 

phone service in their states. Thirty-three states provided information. We 

also spoke to officials in attorney general offices and/or public utility 

commissions in California, New York, Illinois, Massachusetts, Nebraska, 

New Jersey, and Texas. To obtain data on call quality and other 

information, we contacted officials at the six largest national mobile phone 

service carriers: AT&T Wireless Services, Inc. (AT&T Wireless); Cingular 

1

For purposes of this report, the term mobile phone service includes the provision of mobile 

phone services by cellular, broadband personal communications service, and digital 

specialized mobile radio carriers.

2

Data provided by the Cellular Telecommunications & Internet Association (CTIA), an 

industry trade association.
Page 2 GAO-03-501 Mobile Phone Call Quality

Wireless, LLC (Cingular); Nextel Communications, Inc. (Nextel); Sprint 

PCS; T-Mobile USA, Inc. (T-Mobile USA, formerly VoiceStream); and 

Verizon Wireless, LLC (Verizon Wireless). We also contacted officials at 

other firms—Telephia, Inc.; LCC International, Inc.; and Scoreboard—that 

collect network data. In addition, we spoke to an official at the Federal 

Trade Commission (FTC) concerning consumer complaints they have 

received about mobile phone service. We also spoke to consumer 

advocates, financial analysts, and attorneys engaged in class-action 

lawsuits against carriers about various aspects of the mobile phone 

industry.

We contracted with a market research firm to administer 26 questions as 

part of a national telephone survey conducted in November 2002. Our 

questions addressed issues such as experiences with certain call quality 

problems, satisfaction with the quality of mobile phone service, complaintmaking practices, and factors involved in decisions to change companies. 

We projected the results of the survey to the population of adult mobile 

phone users. However, we are concerned about the potential for those who 

did not respond to the survey to differ from those who did respond in some 

way that could affect the results. We have no explicit reason for suspecting 

that the survey suffers from this shortcoming. Instead, our concern arises 

out of the large sample of telephone numbers (about 19,000) dialed to 

produce about 1,000 survey respondents, about 550 of whom use mobile 

phones.

In addition, we contacted a number of experts who are knowledgeable 

about mobile phone issues to give us their opinions about potential actions 

the federal government might take to improve call quality. This report also 

draws on information collected for our recent report on spectrum 

management issues.3 We conducted our work from March 2002 through 

March 2003 in accordance with generally accepted government auditing 

standards. For a more detailed discussion of our scope and methodology, 

see appendix I. 

Results in Brief Under the regulatory framework for mobile phone service, FCC generally 

relies on competitive market forces to determine mobile phone call quality. 

3

See U.S. General Accounting Office, Telecommunications: Comprehensive Review of U.S. 

Spectrum Management with Broad Stakeholder Involvement Is Needed, GAO-03-277 (Washington, 

D.C.: January 2003).
Page 3 GAO-03-501 Mobile Phone Call Quality

The Omnibus Budget Reconciliation Act of 1993 provided a regulatory 

framework that directed FCC to encourage the promotion of competitive 

market conditions for mobile phone service and limited the ability of the 

states to regulate it. In the 1993 Act and other legislation, the Congress 

granted FCC flexibility in regulating mobile phone services. In 

implementing this legislation, FCC has taken actions to encourage the 

growth of competitive markets that have resulted in most parts of the 

country having several competing carriers. FCC believes that this 

competitive market will provide consumers with the level of call quality 

they desire and that adopting federal regulations that require a certain 

minimum level of call quality are not necessary. At the direction of the 

Congress, FCC reports annually on whether or not there is effective 

competition in the market for mobile phone services. Over the last 7 years, 

these reports have included key aspects of mobile phone service—such as 

the number of competitors in the marketplace, trends in subscribership 

and the prices of service, deployment in rural areas, and features provided 

by carriers—but have not included information on call quality.

Concerns about mobile phone call quality have been raised by state 

officials, consumer groups, the media, and others. Based on the results of 

our consumer survey, conducted in November 2002, we estimate that 

nearly 83 percent of mobile phone users were satisfied with their service at 

that time, about 9 percent were dissatisfied, and the remainder were 

indifferent.4

 In addition, we estimate that about 47 percent of adult mobile 

phone users believed their call quality was improving, while about 5 

percent believed that their call quality was getting worse. We also found 

that users were experiencing some call quality problems, including a lack 

of coverage, limited network capacity at times, dropped calls, and poor 

sound quality. For example, we estimate that 22 percent of users were 

unable to successfully complete 10 percent or more of their calls, because 

the calls were dropped by the network. Data sources other than consumer 

surveys would be useful in assessing the extent of mobile phone call quality 

problems; however, these data were either not available or were of limited 

usefulness because they were not collected systematically. The major 

carriers are not required to report data on the performance of their mobile 

phone networks (such as the number of dropped calls or detailed coverage 

information) to FCC, and they declined to provide us with those data as 

well. The carriers said that this information was proprietary and would be 

4

All percentage estimates from the survey have sampling errors of plus or minus 8 

percentage points or less, unless otherwise noted. For details, see appendix I. 
Page 4 GAO-03-501 Mobile Phone Call Quality

difficult to interpret, even if made available. Carriers also declined to 

provide us with their data on customer complaints. Complaint data from 

other sources, such as state public utility commissions, were not useful in 

determining the extent of call quality problems for a number of reasons, 

including inconsistencies in the method of collecting and classifying 

complaints. 

Interested parties, such as state officials and consumer advocates, have 

suggested possible actions to address call quality concerns. These actions 

would have varying potential benefits and drawbacks. For example, some 

of the possible actions that have been proposed would give consumers 

more information on carriers’ coverage areas, their rates of dropped and 

blocked calls, or complaints against them prior to consumers choosing a 

carrier. Some interested parties have also suggested that carriers give 

consumers longer trial periods before they commit to a long-term contract 

with a carrier. These actions could better enable consumers to choose the 

carrier that best meets their needs regarding call quality. Some parties 

would also like to see minimum industrywide call quality standards set for 

the carriers. Others have noted, however, that some of the suggested 

actions have drawbacks that could potentially drive up the price of mobile 

phone service, limit the entry of new carriers and thus affect competition in 

the marketplace, or lead to a reduction of service in regions that are 

technically difficult or costly to serve, such as mountainous or sparsely 

populated rural areas. The carriers say that they are taking actions to 

improve call quality and further regulation is not needed. However, they 

maintain that their ability to improve call quality is hampered by financial 

and regulatory constraints, such as local government land use and zoning 

restrictions on the siting of new base stations for transmitting and receiving 

mobile phone signals. 

To assist FCC in determining whether further action concerning mobile 

phone call quality is necessary, we are recommending that FCC include call 

quality in its mandated annual report analyzing whether there is effective 

competition in the market for mobile phone services. In commenting on a 

draft of this report, FCC generally agreed with our recommendation stating 

that, to the extent possible, it would include information related to call 

quality in its future reports on competition in mobile phone services. 

However, FCC noted some difficulties in implementing the 

recommendation, such as data not being readily available, the lack of 

objective performance standards, and difficulties in measuring call quality 

against consumer expectations.
Page 5 GAO-03-501 Mobile Phone Call Quality

Background Carriers deliver mobile phone service by subdividing large geographic 

areas into smaller overlapping sections called cells.5

 Each cell has a base 

station equipped with an antenna to receive and transmit radio signals to 

the mobile phones within its coverage area. This area can vary in size from 

under a mile to 20 miles from the base station. Mobile phones are lowpowered radio transceivers (a combination radio transmitter and receiver) 

that use radio waves to communicate with the base stations. A mobile 

phone’s communications are generally associated with the base station of 

the cell in which it is presently located. When a call is initiated, the base 

station assigns a radiofrequency to the mobile phone from among the group 

of frequencies that the station controls. The number of frequencies 

available at a base station will depend primarily on the amount of 

radiofrequency spectrum assigned to the carrier by FCC, the number of 

base stations in the carrier’s service area, and the carrier’s signaling 

standard.6 Each base station is linked to a mobile phone switching office, 

which is also connected to the local wireline telephone network. The 

mobile phone switching office directs calls to the desired locations, 

whether to another mobile phone or a traditional wireline telephone. This 

office is also responsible for handing off calls from one cell to another in a 

smooth and seamless manner as a customer changes locations during a 

call. Figure 1 provides a simplified picture of the key components of a 

mobile phone system.

5

Mobile phone service carriers offer three types of service—cellular, personal 

communications service, and digital specialized mobile radio—each with specific system 

characteristics that are not apparent to users.

6

The radiofrequency spectrum is the medium that enables wireless communications of all 

kinds, such as mobile phone and paging services, radio and television broadcasting, radar, 

and satellite-based services.
Page 6 GAO-03-501 Mobile Phone Call Quality

Figure 1: Key Components of a Mobile Phone System

FCC is the federal agency that oversees interstate telecommunications in 

the United States, including mobile phone service. The mobile phone 

industry began to develop in the mid-1980s when FCC awarded 

radiofrequencies to two cellular carriers in each geographic market. FCC 

awarded one cellular license to the incumbent wireline telephone company 

Source: GAO.

Local wireline

phone company

Mobile phone 

switching office

Mobile phone

Mobile phone

Cell

Base station with antenna
Page 7 GAO-03-501 Mobile Phone Call Quality

and a second license to an independent carrier. If there was only one 

applicant for the second license, that applicant received the license. When 

more than one applicant applied, FCC used comparative hearings, which 

give competing applicants a quasi-judicial forum in which to argue why 

they should be awarded a license instead of other applicants. Later, at the 

direction of the Congress, FCC held lotteries to award licenses. In 

establishing the rules under which the cellular phone industry would 

operate, FCC made several key decisions:

• All carriers would use the same analog technology to provide service. 

• Within 3 years of receiving a construction permit, carriers would have to 

build networks that could theoretically serve the areas for which they 

obtained a license. At the end of the 3 years, licenses for those areas that 

could not theoretically be served might be made available to some other 

carrier.

• Carriers would have to inform customers of the area in which reliable 

service could be expected.

• No other call quality standards would be required. That is, no minimum 

requirements concerning the probability that calls would be completed 

with good sound quality were established. FCC considered establishing 

such standards, but decided to let the marketplace determine the level 

of call quality.

• Carriers would have to notify FCC if they turned away a customer 

because of a lack of capacity and state how they intended to remedy this 

lack of capacity.7

Since it was first launched, the industry has migrated from using only 

analog technologies to primarily using digital technologies. Originally 

carriers used an analog technology that is similar to that used for the 

transmission of FM radio broadcasts. While analog technologies are still 

being used, most service is now provided with digital technologies, which 

have several advantages over analog technologies: they provide for better 

security, allow for services such as caller identification, allow noise to be

7

As other mobile phone services began to develop, FCC granted carriers greater flexibility. 
Page 8 GAO-03-501 Mobile Phone Call Quality

reduced on calls, and conserve on the use of scarce spectrum resources.8 

FCC did not specify a single digital technology. Instead, carriers were free 

to adopt one of several signaling standards: code division multiple access 

(CDMA), time division multiple access (TDMA), and global system for 

mobile communications (GSM). In addition, Nextel Communications uses a 

technology called integrated Digital Enhanced Network, a derivative of 

TDMA.9

The industry has grown dramatically over time. In terms of annual 

revenues, the industry has mushroomed: from about $482 million in 1985 to 

over $27 billion in 1997 and then to over $76 billion in 2002. In recent years, 

from 1997 through 2002, average monthly minutes of use of mobile phone 

use grew almost 900 percent, from about 5.6 billion minutes per month in 

1997 to about 55.5 billion in 2002 (see fig. 2). This growth resulted not only 

from an increase in subscribership but also from a marked increase in the 

average number of minutes used by each subscriber. 

8

In 1988, FCC permitted cellular carriers to use digital technology but required carriers to 

continue to offer analog service as well. In 2002, FCC provided a 5-year period to sunset the 

rules governing the provision of analog service by cellular carriers.

9

With CDMA, a spread spectrum approach to digital transmission, each conversation is 

digitized and then tagged with a code. The mobile phone is than instructed to decipher only 

a particular code to pluck the right conversation off the air. TDMA allows a large number of 

users to access (in sequence) a single radio frequency channel without interference by 

allocating unique time slots to each user within each channel. GSM, a standard that was 

developed in Europe, uses a TDMA scheme, under which separate time slots are used to 

send and receive calls.
Page 9 GAO-03-501 Mobile Phone Call Quality

Figure 2: Estimated Average Number of Minutes of Mobile Phone Service Used Per 

Month in the United States, 1997-2002 

Note: GAO analysis of CTIA data.

To subscribe to mobile phone service, a customer must sign-up with a 

mobile phone service carrier, either by signing a contract and choosing a 

plan, or by purchasing prepaid minutes of airtime and buying a phone that 

works with the prepaid service. Most customers sign contracts that specify 

a geographically based rate plan and the size of the block of minutes the 

customer is buying for a flat monthly fee. New customers sometimes pay 

up-front fees for “network activation” of their phones and usually agree to 

pay an “early termination fee” if they should quit a carrier’s network before 

the date specified on the contract. In return for signing the contract, 

customers often receive mobile phones, suitable for their carrier’s network, 

at a price lower than that which they would have to pay without a service 

contract. 

Because of the nature of radio transmission, the amount of radiofrequency 

spectrum allocated by FCC for mobile phone service, and the challenge of 

building the infrastructure to meet a rapidly growing consumer base, 

consumers are not always able to complete their phone calls or to hear 

them clearly. The following, some of which are illustrated in figure 3, are 

examples of such call quality concerns.

Source: Cellular Telecommunications & Internet Association.

Minutes of use in billions

Years

0

10

20

30

40

50

60

1997 1998 1999 2000 2001 2002
Page 10 GAO-03-501 Mobile Phone Call Quality

• Consumers may not be able to complete calls because the 

radiofrequencies used for mobile phone service can be blocked by 

terrain, such as hills, or by man-made structures. The structural features 

of some buildings can block signals from reaching the interior of the 

buildings. Similarly, signals may not be able to penetrate into subways 

or tunnels.

• Consumers’ calls may be disrupted by temporary conditions, such as 

weather or interference from other wireless devices. 

• A consumer may be unable to initiate a call because the local base 

station’s available radiofrequencies are all in use by other consumers. 

The consumer may receive a fast busy signal instead of a dial tone or 

some other indication that frequencies are not available.

• Consumers’ calls may be dropped when moving from a cell that has 

capacity to an adjacent cell that cannot handle additional calls because 

it is already at capacity. 

• A consumer’s call may not be connected because of a “dead spot” within 

a carrier’s service area where there is no base station coverage. This 

may be due to decisions made by carriers concerning the building of 

base stations, or difficulties in finding a suitable location or obtaining 

zoning approval to construct additional base stations.

• Consumers may be unable to initiate calls because their service carrier 

does not cover the area from which the call is being made and the 

carrier does not have an agreement with a competitor to serve its 

subscribers under a “roaming” agreement.
Page 11 GAO-03-501 Mobile Phone Call Quality

Figure 3: Common Call Quality Problems Associated with Mobile Phones

Under the Regulatory 

Framework for the 

Mobile Phone Industry, 

FCC Relies on 

Competitive Market 

Forces to Determine 

Call Quality and Has 

Not Set Specific 

Quality Standards

Beginning in 1993, the Congress enacted legislation aimed at developing a 

regulatory framework that would treat commercial carriers in a consistent 

manner and encourage the growth of competitive markets for mobile 

phone services. FCC has acted to implement this regulatory framework and 

is relying on consumer choice in a competitive marketplace to determine 

the level of call quality, rather than setting a minimum standard for the 

industry to meet. At the direction of the Congress, FCC analyzes and 

reports on competitive market conditions in the mobile phone industry 

annually. To date, these reports have included issues such as the number of 

carriers, prices, and subscribership but not call quality.

The Congress Has Promoted 

Development of 

Competitive Mobile Phone 

Markets 

In the early 1990s, types of mobile phone services other than cellular had 

been or were about to be developed. These new services were 

demonstrating that greater competition could exist in this marketplace; 

however, two different regulatory regimes had developed: one for the 

original cellular service and another for newer mobile phone services that 

used other technologies or portions of the radiofrequency spectrum. In 

1993, the Congress enacted legislation—the Omnibus Budget 

Reconciliation Act (1993 Act)—that promoted consistent regulation of 

commercial mobile phone service carriers and established the promotion 

of competition as a fundamental goal for the development of mobile phone 

Blocked calls

(hills, tunnels, buildings, 

or temporary conditions 

such as weather)

Insufficient capacity

(no vacant frequencies, 

adjacent cell full, etc.)

Dead spots

(cell within service 

area but lacking base 

station coverage)

Lack of coverage

(calls outside of

carrier's service area)

Source: GAO.
Page 12 GAO-03-501 Mobile Phone Call Quality

policies and regulation. The 1993 Act included several provisions to 

achieve these goals:

• All commercial mobile phone services were to be regulated similarly, 

without regard to the specific technology or radiofrequency spectrum 

used by a carrier.10 

• FCC was to auction spectrum licenses when more than one user wanted 

to use certain frequencies for the transmission of mobile phone calls. 

This method of assigning licenses requires mobile phone service 

carriers to pay for the right to use the spectrum and awards the 

spectrum to the carrier willing to pay the highest price for it under 

certain conditions. 

• Numerous licenses were to be auctioned in each mobile phone market 

so that a wide variety of bidders could participate.

• FCC was given the authority to refrain from applying certain provisions 

of the Communications Act of 1934 that FCC found to be unnecessary 

under specific statutory criteria. For example, FCC did not apply 

provisions that restricted market entry or exit.11

• FCC was required to report annually on competitive market conditions 

in the industry. The report was to include an identification of the 

number of competitors in various commercial mobile services, an 

analysis of whether or not there is effective competition, an analysis of 

whether any competitors have a dominant share of the market, and a 

statement of whether additional providers or classes of providers would 

be likely to enhance competition.

In addition, the 1993 Act preempted states and local governments from 

regulating the entry of or the rate charged by any mobile service carrier. 

However, states could petition FCC for authority to regulate commercial 

10Commercial mobile phone service carriers were to be treated as common carriers and 

regulated under Title II of the 1934 Communications Act.

11FCC was authorized to refrain from applying certain provisions of Title II that they found 

to be unnecessary under specific statutory criteria. However, FCC was required to apply 

sections 201, 202, and 208 of the Communications Act of 1934. Respectively, these 

provisions provide for service and interconnection upon reasonable request and terms; no 

unjust or unreasonable discrimination; and complaint procedures. 47 U.S.C. §§ 201, 202, and 

208.
Page 13 GAO-03-501 Mobile Phone Call Quality

rates under certain conditions. Shortly after the 1993 Act was enacted, 

eight states12 sought the right to continue regulating wireless rates. FCC 

denied all of the petitions. One state appealed the denial of its petition, and 

the court affirmed FCC’s decision.13 However, the 1993 Act expressly 

reserved to the states the right to regulate other “terms and conditions” of 

commercial mobile phone service, and FCC has provided guidance over 

time on the scope of these rights. For example, FCC has concluded that 

billing information, practices, and disputes fall within other terms and 

conditions and may be regulated under state contract or consumer law. 

Similarly, FCC has found that state contract or consumer fraud laws 

governing disclosure or rates are generally not preempted and that as a 

general matter, state courts are not preempted from awarding damages to 

customers of commercial mobile phone carriers, based on violations of 

state contract or consumer fraud laws. Several lawsuits are now before 

state courts making claims against carriers under state fraud or consumer 

protection laws. 

In the 1996 Telecommunications Act (1996 Act), a law that deregulated 

various aspects of the telecommunications industry, the Congress provided 

FCC with additional tools that could be used to promote competition in the 

mobile phone service industry. The 1996 Act requires FCC to refrain from 

imposing unnecessary regulation on telecommunications carriers, 

including mobile phone carriers.14 The 1996 Act also requires that every 2 

years FCC engage in a review (the biennial review) of its rules, including 

those related to mobile phone service, to determine whether any of them 

are no longer necessary as a result of meaningful competition among the 

carriers. In addition, the 1996 Act requires FCC to take actions that would 

allow consumers to keep their phone number when changing among 

wireline telephone companies, referred to as local number portability. 

Further, the 1996 Act preserved the rights of states and localities to use 

land-use and zoning laws to regulate the placement of carriers’ base station 

12The states were Arizona, California, Connecticut, Hawaii, Louisiana, New York, Ohio, and 

Wyoming.

13Connecticut Dept. for Pub. Util. Control v. FCC, 78 F.3d 842 (2nd Cir 1996).

14The 1996 forbearance standard is similar to the standard included in the 1993 Act. See 47 

U.S.C. §160, 47 U.S.C. §332(c).
Page 14 GAO-03-501 Mobile Phone Call Quality

antennas.15 This has enabled states and localities to affect both the level of 

competition and the quality of mobile phone calls. 

FCC Has Promoted 

Competitive Markets to 

Determine the Level of Call 

Quality

In implementing the 1993 and 1996 Acts, FCC has taken several actions to 

promote competition in the mobile phone market. These actions included 

auctions, spectrum caps, and local number portability.

Auctions: From 1994 through 2002, FCC conducted 42 auctions for 

spectrum dedicated to various kinds of wireless phone services. In accord 

with the 1993 Act, FCC’s licensing scheme has also helped to ensure that 

many carriers were available in each geographic market. In every region, 

FCC authorized up to eight different mobile phone licenses. 

Spectrum cap: Until recently, FCC limited the number of radiofrequencies 

any one carrier could have rights to in any one market. By limiting any one 

carrier to 45 megahertz (MHz) of spectrum in any metropolitan market or 

55 MHz in any one rural market, FCC aimed to prevent any one mobile 

phone service carrier from dominating a market. As a result of the 2000 

biennial review, FCC phased out the cap, fully eliminating it on January 1, 

2003. In doing so, FCC asserted that competition in mobile phone markets 

was robust enough that it was no longer appropriate to impose caps on 

spectrum rights. 

Local number portability: FCC extended the 1996 requirement that local 

number portability be implemented for wireline telephone customers to 

include mobile customers as well. FCC concluded that while the 1996 Act 

did not specifically require local number portability for mobile phone 

service carriers, making it a requirement would serve the public interest by 

promoting competition among the various types of telephone services and 

facilitating consumer choice. Because of certain implementation issues, 

FCC has extended the deadline for mobile phone service carriers that 

operate within the 100 largest metropolitan areas to offer local number 

portability from the original deadline of June 30, 1999, until November 24, 

2003.

As a result of these actions, industry developments, and consumer interest, 

FCC, in its most recent annual report on competitive conditions in the 

15Certain limitations were placed on this authority. For example, states or local governments 

must not unreasonably discriminate among carriers of functionally equivalent services.
Page 15 GAO-03-501 Mobile Phone Call Quality

mobile phone industry,16 noted that the industry has experienced increased 

numbers of competitors in various markets, innovation, lower prices for 

consumers, and increased diversity of service offerings. Regarding the 

number of competitors, for example, FCC reported that 94 percent of the 

U.S. population lives in counties with access to three or more mobile phone 

carriers, and 80 percent lives in counties with at least five carriers. FCC 

reported further that there are six national carriers: AT&T Wireless, 

Cingular, Nextel, Sprint PCS, T-Mobile USA, and Verizon Wireless. Other 

large regional carriers, including ALLTEL Corp., Western Wireless Corp., 

United States Cellular Corp., and Dobson Communications Corp., are also 

active in the market. 

Data we obtained from Yankee Group, Inc. (a market research firm 

specializing in telecommunications issues) for the third quarter of 2002 are 

consistent with the competitive picture of the industry provided by FCC’s 

annual report. These data, presented in figure 4, show that none of the six 

national carriers dominates the national market. Their market shares range 

from T-Mobile USA’s 7 percent to Verizon Wireless’s 24 percent. This figure 

also shows that each of the carriers was experiencing a substantial level of 

customer turnover during 2002, ranging on an annualized basis from 

Nextel’s 24 percent to T-Mobile USA’s 50 percent. The percentage of mobile 

phone customers who change carriers in a given year suggests that carriers 

are actively competing. 

16See Federal Communications Commission, Annual Report and Analysis of Competitive 

Market Conditions With Respect to Commercial Mobile Services, FCC 02-179 (Washington, 

D.C.: July 3, 2002).
Page 16 GAO-03-501 Mobile Phone Call Quality

Figure 4: U. S. Market Shares and Annualized Turnover Rates for Mobile Phone Service Carriers, Third Quarter, 2002

Note: GAO analysis of Yankee Group data.

FCC has concluded that competition is sufficient to provide incentives for 

carriers to meet consumers’ expectations and desires for call quality. For 

example, in its 2000 biennial review to determine whether any of its rules 

were no longer necessary as a result of the development of meaningful 

competition among mobile phone service carriers, FCC removed 

requirements that carriers provide consumers with information showing 

their reliable coverage areas. These requirements had been placed on the 

original cellular services, but had not been placed on newer mobile phone 

services. FCC found that although carriers providing newer mobile phone 

services were not required to supply consumers of these services with 

coverage information, they nevertheless provided these consumers with 

the same types of information that they provided to consumers of the 

original cellular services. As a result, FCC concluded that competitive 

pressures were strong enough to ensure that carriers would continue to 

supply consumers with information on coverage, even after FCC removed

7%

8%

13%

14%

17%

24%

17%

Source: Yankee Group.

T-Mobile USA

Other

Nextel

AT&T Wireless

Sprint PCS

Cingular

Verizon Wireless

Market shares Annualized turnover rates

0

10

20

30

40

50

Verizon

Wireless

T-Mobile

USA

Sprint

PCS

AT&T Cingular Nextel

Wireless

Percent

35 36

24

46

50

28
Page 17 GAO-03-501 Mobile Phone Call Quality

the requirement.17 However, some consumer advocates have questioned 

whether competitive pressures are strong enough to ensure that carriers 

will provide consumers with adequate information on coverage. Recently, 

in February 2003, the Chairman of FCC stated that competition provides 

incentives for carriers to improve call quality.18 Specifically, he noted that to 

attract and keep customers, carriers are having to offer better packages of 

rates, coverage, and service quality than their competitors. 

Although FCC relies primarily on the marketplace to determine the level of 

call quality, it has also acted to provide consumers with additional 

information on the nature of mobile phone service and the types of 

problems that consumers may encounter. FCC now provides the public 

with information on the quantity and types of complaints and inquiries it 

receives concerning mobile phone service. This information is updated 

quarterly. FCC provides additional information to consumers through its 

brochure on mobile phone service, which is posted on FCC’s Web site19 and 

appears in appendix III of this report. This brochure explains the nature of 

mobile phone service, including coverage, other call quality issues, pricing, 

and handset features. FCC has also suggested questions that consumers 

should ask carriers when purchasing service and recommended that 

consumers obtain information from neighbors and coworkers concerning 

the call quality they receive from various carriers. In addition, FCC has 

taken action to promote the public interest in the area of implementing 

enhanced 911 service (E-911) for mobile phones. This service will allow 

emergency responders to determine the location of a mobile phone caller 

within some specified area. 

17At the same time, FCC removed the requirement that cellular service carriers notify FCC if 

they lacked the capacity to service certain customers. 

18Letter from FCC Chairman Michael Powell to Senator Charles E. Schumer, dated February 

5, 2003.

19See www.fcc.gov/cgb/wirelessphone.pdf.
Page 18 GAO-03-501 Mobile Phone Call Quality

FCC Reports Annually on 

Competitive Market 

Conditions in the Mobile 

Phone Industry but Does 

Not Include Information on 

Call Quality

At the direction of the Congress, FCC has issued seven annual reports and 

analyses of competitive market conditions in mobile phone services. The 

Congress stated that the report should include an identification of the 

number of competitors in various commercial mobile services, an analysis 

of whether or not there is effective competition, an analysis of whether any 

competitors have a dominant share of the market, and a statement of 

whether additional providers or classes of providers would be likely to 

enhance competition. FCC’s reports have concentrated on a discussion of 

the structure of the industry, especially the number of competitors in the 

marketplace and their location. In addition, the reports include a 

discussion of the number of subscribers, the prices charged for services, 

deployment in rural areas, and information on features provided by 

carriers. 

Call quality is an important aspect of mobile phone service, and FCC said 

that carriers appear to be competing for customers in this area. However, 

FCC has not included call quality, beyond a discussion of the number of 

carriers providing service, in its annual analysis of whether or not there is 

effective competition in mobile phone services. By way of contrast, the 

Office of Telecommunications (OFTEL) in the United Kingdom, the 

regulatory body that monitors competition in telecommunications markets 

in that country, includes call quality in its reports on competition in the 

mobile phone industry.20 As part of its ongoing monitoring of competition, 

OFTEL conducts quarterly surveys of mobile phone users. From these 

surveys OFTEL has reported that reception quality and geographic 

coverage are among the most important reasons for consumers in that 

country to choose a carrier. In addition, OFTEL has used the information it 

collects on network performance and other factors to determine that there 

is effective competition among carriers regarding those aspects of service 

that we have identified as call quality. 

Although, at the time of our review, FCC had not indicated that it planned 

to include call quality in its annual report on competitive market conditions 

in the mobile phone service industry in the future, it was attempting to 

improve the overall quality of the data used in that report. For example, 

FCC held hearings in February 2002 in order to improve the quality of the 

data that would be used in its seventh annual report, which was released in 

20See for example United Kingdom Office of Telecommunications, Effective competition 

review: mobile–-A Statement issued by the Director General of Telecommunications,

(London, U.K.: Sept. 26, 2001).
Page 19 GAO-03-501 Mobile Phone Call Quality

July 2002. Participants at those hearings noted several shortcomings in the 

data used for the report and analysis of competitive market conditions, 

including FCC’s almost sole reliance on unaudited data from industry trade 

associations and financial analysts, the failure to include consumer input, 

and the lack of credible data on prices and profits. Hearing participants 

also noted a marked contrast between the data regularly collected in other 

industries such as the airline and electricity industries. In those industries, 

oversight agencies have access to data on operations and the actual prices 

paid by consumers. With regard to measuring the extent of competition, 

FCC has noted some limitations in the data they collect for their 

congressionally mandated annual report. Specifically, in the seventh report, 

FCC noted that—as a result of treating carriers that serve any part of a 

county as if they served the entire county—the report likely overstates the 

number of carriers serving consumers in various locations. Thus, both the 

amount of coverage and the extent of competition are likely to be 

overstated. 

In recognition of these continuing data limitations, FCC issued a Notice of 

Inquiry in December 2002 seeking comment on how it could gain more 

detailed, comprehensive, and independent data to use in its 2003 report on 

competitive market conditions.21 According to the notice, FCC was looking 

for data that would allow it to evaluate the extent to which consumers can 

choose among mobile phone service carriers as well as services and 

technologies. Specifically, FCC was looking for information on a broad 

range of items related to the structure and performance of the industry. 

And, for the first time, FCC included quality of service as an area that might 

be explored in the report. The 13 organizations that responded to the 

inquiry either did not comment on service quality or asserted that data on 

service quality were not needed. The consumer advocates who have raised 

concerns about call quality did not respond to this notice. Two of the 

consumer advocates said that they support efforts for FCC to collect and 

report more information on call quality, but they did not respond to the 

notice because of more pressing priorities at that time. 

In some other countries, such as Australia, France, and the United 

Kingdom, regulators collect network performance information or survey 

consumers to determine their level of satisfaction or the extent to which 

21See Federal Communications Commission, Annual Report and Analysis of Competitive 

Market Conditions with Respect to Commercial Mobile Services, Notice of Inquiry, FCC 

02-327 (Washington, D.C.: Dec. 13, 2002).
Page 20 GAO-03-501 Mobile Phone Call Quality

they are knowledgeable about certain aspects of mobile phone service. For 

example, in France, the French regulatory authority for 

telecommunications conducts its own tests of call quality to determine if 

certain carriers are meeting the call quality requirements specified in their 

licenses. These tests have generally been conducted in cities with 50,000 or 

more inhabitants. As noted above, in the United Kingdom, OFTEL conducts 

quarterly surveys of business and residential phone users. These surveys 

allow the agency to track consumer satisfaction rates as well as measure 

consumer knowledge about mobile phone service, including the availability 

of a range of price plans. In addition, OFTEL collects network performance 

and capital investment data from mobile phone service carriers. In 

Australia, the Australian Communications Authority also collects and 

publishes information on various aspects of consumer satisfaction and 

quality in its annual report on telecommunications performance. 

Concerns Have Been 

Raised, but Available 

Data Are Inconclusive 

on Extent of Call 

Quality Problems

Interested parties, such as state officials and consumer advocates, have 

raised concerns about mobile phone call quality. Fully assessing the extent 

of call quality problems would likely require network performance data 

from the carriers as well as information on the extent to which consumers 

are satisfied or dissatisfied with the call quality of their mobile phone 

service. Carrier network performance data are not available to the public 

and are not reported to FCC. Carrier data on complaints are also not 

available and customer complaint data from other sources, such as FCC, 

FTC, states, and consumer organizations, do not provide reliable measures 

of the extent to which customers are dissatisfied with their call quality. 

Consequently, we have only the results of our survey of mobile phone 

customers on which to base our assessment of the extent of call quality 

problems. We estimate from the results of this survey that, while mobile 

phone customers are experiencing call quality problems, a fairly high 

percentage are satisfied with their current overall level of call quality.

Concerns Have Been Raised 

about Mobile Phone Call 

Quality

Some state utility commissioners have been expressing concerns about 

what they say are an increasing number of consumer complaints about 

mobile phone service. Their trade association, the National Association of 

Regulatory Utility Commissioners (NARUC), sponsored panels on mobile 

phone service issues at their quarterly meetings held in July and November 

2002. The topics covered by the panels included local number portability, 

service quality, cost, and best practices for carriers to better serve their 

customers. However, NARUC’s Consumer Affairs Committee defeated a 
Page 21 GAO-03-501 Mobile Phone Call Quality

proposed resolution to have mobile phone carriers provide consumers with 

adequate service area coverage information when making purchase 

decisions and to have FCC monitor this information. As a result of the 

panel discussion held in July and carriers’ desires to talk to state 

commissioners about the issues raised there, in October 2002 NARUC and 

FCC facilitated an informal discussion of these issues between concerned 

state officials and mobile phone service carriers. Following this meeting, 

NARUC began developing a list of suggestions for FCC and mobile phone 

service carriers. These suggestions included FCC reporting on complaints 

by carrier and carriers giving consumers a 15- to 30-day period during 

which they could opt out of new service contracts. 

At least two states are investigating whether carriers’ advertising claims 

about call quality are being met. An official with the New York Attorney 

General’s office told us that the office is concerned that two major carriers 

advertise coverage areas that appear more extensive than they, in fact, are. 

Meanwhile, the California Public Utilities Commission is investigating 

whether another major carrier has adequate coverage in customers’ area of 

use and sufficient system capacity to meet the claims it makes about its 

service. A number of lawsuits raising questions involving coverage claims 

have also been filed in state courts.

The press and consumer advocates have raised concerns about call quality 

as well. For example, over the last couple of years, articles on these issues 

have appeared in several well-known, widely read publications, including 

Forbes Magazine, the Wall Street Journal, the Washington Post, and the

New York Times. In addition, several consumer advocacy groups—

including the Wireless Consumers Alliance, AARP (formerly known as the 

American Association of Retired Persons), and Consumers Union—have 

raised concerns about the coverage and price information consumers 

receive when buying mobile phone service, consumers’ ability to complete 

calls, and the cost of terminating contracts if call quality is not adequate. 

Carriers Provided Limited 

Information on Extent of 

Call Quality Problems 

Carriers said that information on blocked and dropped calls is collected at 

each base station in their networks. However, none of this network 

performance data is publicly available nor are the carriers required to 

report this information to FCC. As part of our effort to determine the extent 

to which calls cannot be completed or lack clarity, we asked the six largest 

carriers if they would be willing to provide us such data. All of the carriers 

declined. The reasons given for not providing the data include the 

following:
Page 22 GAO-03-501 Mobile Phone Call Quality

• The information is business sensitive and proprietary. Revealing it could 

damage a carrier’s competitiveness by alerting its competitors to the 

strengths and weaknesses of its network. 

• The information would not be useful to consumers trying to compare 

one carrier’s performance with that of another carrier. Data would not 

be suitable for comparisons because carriers do not measure 

performance using a single set of standards. Also, systems using 

different transmission technologies respond differently to overcrowding 

on the network. 

• The information might not be completely accurate. For example, if 

callers turn off the power on their phones to end a call instead of 

pressing the “end” button, the network might record that as a dropped 

call. 

• Because their networks are changing rapidly, network performance data 

would be out-of-date before it could be used. 

• Performance is affected by various transient factors, such as time of 

year, weather, and unusual periods of demand that tax network capacity.

While carriers did not provide us with detailed information on blocked and 

dropped calls, network officials at two carriers said that their goal was to 

have a 98 percent call-completion rate. That is, the calls would go through 

and not be dropped before they were completed at least 98 percent of the 

time on average. These officials and those at other carriers said that 98 

percent is generally the industry standard; however, they noted further that 

this standard for completed calls is a network average. Thus, even if 

carriers were meeting that standard, performance at various geographic 

locations or times of day could differ substantially from the network 

average. Because consumers use their phones at specific locations and 

times of day, these network averages may not be useful in helping them 

compare one carrier with another. 

Network information can also be collected through “drive tests,” which are 

generally performed along major road arteries at various times of the day. 

These tests are done in moving vehicles that use computers to 

simultaneously place calls on the networks of various carriers. The 

computer then records whether calls went through and whether they were 

dropped within some specified call time, such as 2 minutes. These tests are 

performed by the carriers themselves and by contractors such as Telephia. 
Page 23 GAO-03-501 Mobile Phone Call Quality

Data from drive test contractors are also proprietary; however, Telephia 

has performed tests for CTIA—an industry trade association—and 

Consumers Union, and these entities have shared that information with the 

public. 

• CTIA’s July 2001 study measured various aspects of mobile phone call 

quality in core urban and suburban areas. The study found that between 

November 1999 and April 2001 there was no change in overall call 

quality as measured by the percentage of time a call goes through with 

adequate sound quality. During this period, the percentage of blocked 

calls went down in both the core urban and suburban areas, while 

dropped calls rose in suburban areas. Telephia concluded that, at the 

time of their study, on average, consumers could place, hold, and 

complete calls of acceptable audio quality 96 to 99 percent of the time.

• In the February 2002 issue of Consumer Reports, Consumers Union 

published averages of call quality data that Telephia had collected in 9 

major metropolitan areas—New York, Boston, Philadelphia, the District 

of Columbia, Los Angeles, Dallas, Houston, Chicago, and Detroit—in 

October 2001. These data show that on Telephia’s 5-point scale—with 1 

being the worst service and 5 the best—call quality ranged from a low of 

3.3 in Houston to a high of 4.7 for Philadelphia. Consumers Union notes 

that these are averages of individual carrier data. In its February 2003 

issue of Consumer Reports, Consumers Union used a survey of its 

subscribers to rank carriers for the first time in six major cities.

Some carriers also said that they have detailed coverage and service maps 

that are based on engineering models that predict service rather than on 

actual service data. Again, carriers did not share these maps with us for 

several reasons similar to those for not providing actual network 

performance data. The reasons included competitiveness, accuracy, and 

timeliness of data. 

Consumer Complaint Data 

Provide a Limited Indication 

of Call Quality Concerns

Consumer complaint data are a potential source of information on 

customer dissatisfaction with their mobile phone service, but these data 

are either not publicly available or suffer from methodological limitations. 

The carriers were unwilling to share information on the quantity and kinds 

of complaints they receive. Some complaint data are available from other 

sources, including federal and state government agencies, consumer 

advocates, and Web sites. However, these complaint databases are not 

adequate to determine the extent of call quality problems because they do 
Page 24 GAO-03-501 Mobile Phone Call Quality

not employ a scientific method in collecting the data. Instead, they depend 

on individual, dissatisfied consumers to know where to call or write, and to 

take the time to do so. In addition, many of the groups collecting 

complaints said that the categorization of complaints was difficult and, as a 

result, complaints were probably not being categorized in a consistent 

manner.

Federal government: FCC takes complaints about mobile phone service 

that it receives from consumers and others and refers them to consumers’ 

carriers for resolution. FCC defines a complaint as a communication 

received from or on behalf of an individual that alleges harm or injury and 

seeks relief. It accepts complaints from consumers by phone, by facsimile, 

through the Internet, or by electronic or regular mail.22 FCC has been 

receiving consumer complaints about mobile phone services and referring 

them to consumers’ carriers since the mid-1980s. In the spring of 2001, FCC 

began categorizing complaints and, in fall 2001, began publishing 

complaints by category. However, officials cautioned that their complaint 

numbers could include requests for information as well as complaints, and 

that the existence of a complaint against a carrier does not necessarily 

indicate wrongdoing by that carrier. FCC also said that it tracks complaints 

to identify trends in types of complaints or to determine if a carrier has 

received excessive numbers of complaints. In either instance, FCC said 

that it contacts carriers and asks them to provide an explanation. Based on 

feedback from carriers and consumers, FCC estimated that as a result of 

this process, consumer complaints are resolved to the satisfaction of the 

consumer close to 80 percent of the time. Should complaints go unresolved 

or should a carrier receive excessive numbers of complaints without an 

acceptable justification, a carrier could be subject to an FCC enforcement 

action. FCC officials noted that they have not been categorizing complaints 

for a long enough time to show any trends. In 2002, FCC logged about 

14,000 consumer complaints about mobile phone service. As figure 5 

shows, over 60 percent of the complaints concerned billing and rate issues. 

The next largest categories were service quality (a category that includes 

call quality issues), contract-early termination fee, and marketing and 

advertising.

22Complaints can be filed by phone at 1-888-Call-FCC (1-888-225-5322) voice, 1-888-Tell-FCC 

(1-888-835-5322) TTY; by facsimile at 202-418-0232; through the Internet at

www.fcc.gov/cgb/complaints.html; by e-mail at fccinfo@fcc.gov; or by mail to Federal 

Communications Commission, Consumer & Governmental Affairs Bureau, Consumer 

Complaints, 445 12th Street, SW, Washington, D.C. 20554.
Page 25 GAO-03-501 Mobile Phone Call Quality

Figure 5: FCC Mobile Phone Consumer Complaints by Category, 2002

Note: GAO analysis of FCC data.

a

FCC includes those items that we have identified as call quality, such as dropped calls and dead 

spots, in its service quality category; however, it also includes complaints about not being able to use a 

mobile phone because the carrier had ceased to do business in the consumer’s area or ceased to do 

business altogether.

FTC also receives complaints about mobile phone service and forwards 

them to FCC.23 FTC compiled their mobile phone complaint data by the 

complaining consumer’s state and by the carrier’s state, but could not 

categorize the data by type of complaint. According to an FTC official, in 

2000, 2001, and the first half of 2002, FTC’s mobile phone complaints were 

equal to or less than one-half of 1 percent of all of the complaints FTC 

received about all products. 

State public utility commissions: State public utility commissions vary on 

whether they collect complaints about mobile phone service. Thirty-three 

state commissions responded voluntarily to our request for information on 

how they regulate mobile phone service or categorize complaints. Of these 

23FTC has broad law enforcement responsibilities under the Federal Trade Commission Act, 

15 U.S.C. § 41 et seq. With certain exceptions, the statute provides the agency with 

jurisdiction over nearly every economic sector. Certain entities, such as depository 

institutions and common carriers (e.g., telephone companies), as well as the business of 

insurance, are wholly or partly exempt from FTC jurisdiction.

4%

11%

11%

12% 62%

Source: FCC.

Equipment

Service qualitya

Marketing and advertising

Billing and rates

Contract–early termination fee
Page 26 GAO-03-501 Mobile Phone Call Quality

state commissions, 23 said that they direct consumers with complaints to 

their state attorneys general, FCC, or the mobile phone service carrier 

identified in the complaint. Six state commissions reported that they 

collect and categorize complaint data from mobile users. While most of the 

commissions who collect data categorize some complaints as billing 

complaints, they use a variety of categories for the other complaints they 

receive. For example, one state categorizes its other complaints as tower 

issues, while another state uses many categories, including dead zones and 

dropped calls, company practices, service quality, and contracts. Of the 

state commissions we heard from, California was the only one that 

provided us with specific data on call quality complaints gathered over a 

number of years. As table 1 shows, complaints about call quality were 

about 8 percent of total mobile phone complaints for 2002. 

Table 1: Consumer Complaints about Mobile Phone Service Filed with the California 

Public Utilities Commission, 1999-2002

Source: California Public Utilities Commission.

Note: GAO analysis of California Public Utilities Commission data.

a

Includes dead zones, dropped calls, and static.

b

Miscellaneous includes a variety of issues such as billing format and back billing issues, cramming, 

advertising and marketing issues, rate design, and taxes and surcharges.

Consumer advocates: Two consumer groups—the Better Business Bureau 

and the Wireless Consumer Alliance—said that they receive and collect 

complaints about mobile phone service. However, both groups said that 

they do not collect complaints in a systematic way and use broad, general 

categories to classify complaints. The Better Business Bureau collects 

complaints on mobile phone equipment, supplies, and services. The Bureau 

said that, between 1998 and 2002, complaints in this category rose from 615

Year

Company

practices

Disputed

bills

Call

quality a

Contract

issues Miscellaneousb Totals

1999 47 1,135 205 9 518 1,914

2000 112 1,550 231 13 363 2,269

2001 232 3,379 459 37 901 5,008

2002 117 1,386 186 13 585 2,287
Page 27 GAO-03-501 Mobile Phone Call Quality

complaints to 21,534 complaints.24 The Bureau was unable to identify 

whether the increase in complaints was attributable to call quality issues or 

to other issues in the mobile phone industry. Some consumer advocates, 

such as the Utility Consumer’s Action Network in San Diego, California, 

have Web sites where consumers can post information about carriers’ dead 

spots—locations within carriers’ coverage areas where service is not 

available. Generally, these data are not verified nor are they regularly 

updated if service becomes available.

Our Survey on Call Quality 

Yielded Mixed Results

To obtain information about the extent to which consumers are concerned 

about various aspects of mobile phone call quality, we included questions 

on call quality in a national telephone survey of adults conducted in 

November 2002. We projected the results of the survey to the population of 

adult mobile phone users. However, we are concerned about the potential 

for those who did not respond to the survey to differ from those who did 

respond in some way that could affect the results. We have no explicit 

reason for suspecting that the survey suffers from this shortcoming. 

Instead, our concern arises out of the large sample of phone numbers 

dialed to produce about 1,000 survey respondents. Some users may not 

have answered the call because they could not identify the caller on their 

caller identification system. Others may not have been available during the 

calling time, and still others may have been unwilling to participate in the 

survey when they were contacted. (Appendix I includes a discussion of the 

survey methodology and its limitations; appendix II includes the survey 

instrument and the responses.) The results of the survey provided mixed 

evidence on the extent to which consumers are troubled by call quality 

problems. 

Based on the survey responses, we found that a fairly high percentage of 

consumers were satisfied with the overall call quality of their mobile phone 

service. Using the results of our survey of mobile phone users, we estimate 

that about 83 percent of consumers were satisfied with their call quality 

and about 9 percent were dissatisfied. The sampling error for our survey 

was plus or minus 8 percentage points or less unless otherwise noted. The 

other users were neither satisfied nor dissatisfied (see fig. 6). In addition, 

we estimate that about 47 percent of adult mobile phone users believed 

their call quality was improving, while about 5 percent believed that their 

24According to CTIA, mobile phone subscribership grew by over 103 percent between 

December 1998 and December 2002. 
Page 28 GAO-03-501 Mobile Phone Call Quality

call quality was getting worse. The other users believed that call quality had 

not changed since they acquired their phones. Finally, we estimate that 83 

percent of adult mobile phone users would not be willing to pay more for 

better quality calls, while 12 percent would be willing to pay more and 

another 5 percent would be willing to pay more under certain conditions.

Figure 6: Overall Customer Satisfaction with Call Quality, November 2002 Consumer 

Survey

Despite the many mobile phone customers who appeared to be satisfied 

with their overall call quality, a number of survey respondents reported that 

they were experiencing specific problems. Using the results of our survey, 

we found that although some mobile phone users never had problems 

placing calls, some had problems occasionally, and others experienced call 

quality problems on 10 percent or more of their calls (see table 2). As 

shown in the last column of table 2, we estimate that about one-fifth of 

customers were not able to get through on 10 percent or more of their calls 

because the cell from which they were calling was at capacity, and about 

one-third of customers could not complete 10 percent or more of their calls 

because they were in a cell where their carrier did not provide service. 

Source: GAO.

83%

8%

9%

Satisfied

Dissatisfied

Neither satisfied

nor dissatisfied
Page 29 GAO-03-501 Mobile Phone Call Quality

Table 2: Mobile Phone Call Quality Problems Based on November 2002 Consumer 

Survey

Source: GAO.

Note: Row percentages may not add to 100 due to rounding. Individual respondents may have 

reported having several problems. Therefore, the column percentages cannot be added to determine 

the total percentage with or without problems.

a

No coverage – consumers cannot complete calls because their carrier does not provide service in the 

cell where they are placing the call and does not have a roaming agreement with another carrier that 

provides service in that cell. 

Fast busy – consumers cannot complete calls because the cell from which they are calling is at 

capacity. Dropped calls – consumers lose connections during a call because they have moved into a 

cell where their carrier either does not have service or the cell is at capacity. 

Poor sound – consumers cannot hear their calls clearly because of static or feedback

Our survey also indicates that call quality problems vary, depending on 

where consumers are when they are making or receiving calls. For 

example, we estimate that about 45 percent of users experienced problems 

when they are in buildings, 37 percent when they were in a vehicle, and 18 

percent when they were outside. Carriers and other experts note that 

reception inside buildings may not reflect the call quality being provided in 

the area. As mentioned earlier, buildings may be constructed of materials 

that do not allow mobile phone radio waves to pass easily into their 

interiors. We found that some businesses have added devices, such as 

antennas and signal repeaters, inside their buildings to facilitate better inbuilding coverage. In buildings where multiple carriers serve customers or 

residents, such as shopping centers, office buildings with multiple tenants, 

or apartment buildings, improving call quality may be the responsibility of 

the building owner rather than any one service carrier. 

Our survey also sheds some light on why consumers change carriers. We 

estimate from our survey that about 73 percent of consumers made carrier 

decisions for themselves, while the remaining 27 percent had someone 

else, such as an employer or family member, choose their carrier. For 

consumers who made carrier decisions for themselves, we estimate that 35 

Type of 

problema

Percent of users who

did not experience

the problem

Percent of users who

had problem on

fewer than 10

percent of their calls

Percent of users who

had problem on 10

percent or more of

their calls

No coverage 22 44 34

Fast busy 32 47 21

Dropped calls 39 39 22

Poor sound 32 38 30
Page 30 GAO-03-501 Mobile Phone Call Quality

percent had changed carriers since they first acquired mobile phones and 

that better call quality was an important incentive for those changes. Yet, 

call quality may have been a less important incentive than getting a better 

price. That is, we estimate that for about 55 percent of the consumers who 

had changed carriers, obtaining better call quality was a very or somewhat 

important reason for the change. However, we estimate that for a larger 

proportion of consumers who had changed carriers—about 83 percent of 

them—price was very or somewhat important. Because only a small 

number of survey respondents had changed carriers—about 145, the 

sampling error for these estimates is plus or minus 13 percentage points or 

less. 

The ability of consumers to take advantage of the range of choices in the 

marketplace, which provides incentives for carriers to respond to customer 

demands for call quality, depends to some degree on customers being able 

to switch from lower-quality carriers to higher-quality carriers. We estimate 

that while about 35 percent of those who made carrier decisions for 

themselves had changed carriers since they first started using their phones, 

about another 28 percent wanted to change carriers, but did not. We asked 

customers who wanted to change carriers, but didn’t, whether certain 

factors were important to their decision. These factors included having to 

pay a fee to terminate a contract before the contract period ended and not 

being able to keep their current mobile phone number—the local number 

portability issue—or their handsets when they change carriers. 

Respondents could cite more than one reason as being important. We 

estimate that for about two-thirds of adult mobile phone users who wanted 

to change carriers but did not, the termination fee was a very or somewhat 

important factor. Further, we estimate that for about 41 percent of adult 

mobile phone users, the lack of local number portability was very or 

somewhat important; and for a similar proportion, not being able to keep 

their handset was a very or somewhat important factor. Because only a 

small number of survey respondents—about 115—had considered, but not 

changed carriers, the sampling error for these estimates is plus or minus 15 

percentage points or less. 

Interested Parties Have 

Suggested Actions for 

Improving Call Quality 

Interested parties, such as state officials and consumer advocates, who 

have raised concerns about mobile phone call quality have also suggested 

actions—such as local number portability or mandating that certain 

information be provided to consumers—that might lead indirectly to 

changes in call quality by making the market more competitive or providing 

consumers with better information. Some interested parties have also 
Page 31 GAO-03-501 Mobile Phone Call Quality

suggested actions, such as establishing minimum call quality standards, by 

which call quality might be improved more directly. All of the suggestions 

have various benefits and drawbacks. 

Local Number Portability 

Could Increase the 

Competitiveness of Mobile 

Phone Markets

Several interested parties have supported adoption of local number 

portability, which will make the market for mobile phone service more 

competitive by reducing the costs to consumers of changing carriers. This 

may affect the level of call quality because customers who are dissatisfied 

with their current carrier will be more likely to change to a carrier with 

better call quality if they do not have to experience the costs and 

inconvenience associated with changing their mobile phone numbers. As a 

result, carriers would have a greater incentive to upgrade their call quality 

to keep their customers. The costs and inconvenience associated with 

changing a mobile phone number are likely to grow for consumers as 

mobile phone service becomes an ever more important part of everyday 

life. Carriers are now scheduled to implement local number portability in 

November 2003.25

Other countries have had varying experiences with number portability and 

support for it varies among U.S. carriers. Officials of Hong Kong, China said 

that local number portability has increased the competitiveness of their 

mobile phone market and has led to a dramatic fall in the price of that 

service. Australian officials have reported, however, that not many 

consumers are changing carriers and taking their numbers with them. They 

report that termination fees may still be discouraging customers from 

changing carriers prior to the expiration of their contracts. Some U.S. 

carriers have said that implementing local number portability is difficult 

and expensive and will thus offset the savings consumers experience from 

not having to change their phone numbers. These carriers have been 

successful in getting FCC to extend the deadline for implementing local 

25Under FCC’s rules promulgated in its Memorandum Opinion and Order, FCC-02-215

(Washington, D.C.: July 2002) a commercial mobile phone carrier located in one of the 

largest 100 metropolitan statistical areas that receives a request by February 24, 2003, from 

another carrier must be capable of providing local number portability by November 24, 

2003. For requests received after February 24, 2003, carriers must be capable of providing 

local number portability, depending on the upgrades needed, within 30 to 180 days after 

November 24, 2003, or 30 to 180 days after receiving the request, whichever is later. Outside 

of the largest metropolitan statistical areas, the other carriers must be able to provide local 

number portability within 6 months of the request or within 6 months of November 24, 2003, 

whichever is later. 
Page 32 GAO-03-501 Mobile Phone Call Quality

number portability from the original June 1999 to the new November 2003 

deadline.26

Many Proposals that Center 

on Giving Consumers More 

Detailed Information Are 

Difficult to Implement 

Many of the actions that have been proposed to give consumers more 

information about call quality—more detailed coverage information, 

information on dropped and blocked calls by carrier, or data on complaints 

against various carriers—could be meaningful to consumers choosing 

among carriers if they were measured consistently across carriers. This 

issue was evident in Australia where the Australian Communications 

Authority requires that carriers report regularly on a set of key 

performance indicators defined by the Authority. In its 2001 to 2002 

Telecommunications Performance Report, however, the Authority did not 

publish these data because, while all of the carriers were in compliance 

with the requirements, they were not reporting these data to the Authority 

in a consistent, comparable manner.27

We have already noted several issues that make it difficult to measure call 

quality or complaints. For example, we have described how blocked or 

dropped call rates and coverage might change over relatively short periods 

of time because of changes in carriers’ networks or other transient factors 

such as weather. In addition, we have described how collecting and 

reporting complaints is difficult because of the need to classify them 

consistently and to determine if they are valid. Officials at FCC, the 

carriers, and state officials we spoke with mentioned several other 

limitations to finding consistent measurements of call quality:

• Carriers might have to start measuring things that they had not 

previously been measuring. This would likely raise costs for these 

carriers. A representative of smaller carriers said that providing any 

additional information to FCC would be especially burdensome for 

26CTIA and a major carrier have challenged how FCC applied the forbearance standard 

when requiring mobile phone service carriers to offer local number portability. In 

FCC-02-205, FCC denied a petition to permanently refrain from enforcing local number 

portability requirements for mobile phone service carriers; instead, FCC granted a 1-year 

extension in the implementation of this requirement to November 2003. These parties have 

continued to contest the implementation of local number portability in the courts.

27See Australian Communications Authority, Telecommunications Performance Report 

2001-2002 (Melbourne, Australia: November 2002).
Page 33 GAO-03-501 Mobile Phone Call Quality

them because these carriers do not have staff to collect and report the 

data. 

• An official at one carrier explained that measurements could be created 

that give carriers using one technology an advantage over those using a 

different technology. That is, because TDMA technologies have a fixed 

capacity while CDMA technologies can trade off increased capacity for 

poorer sound quality, certain measures, such as number of times callers 

find the network overloaded, could benefit carriers that use CDMA over 

those who use TDMA.

• An FCC official noted that carriers might manage their businesses to 

improve their scores on whatever is being measured and reported rather 

than to better satisfy customers. For example, if the percent of dropped 

calls has to be reported, carriers may let sound quality deteriorate rather 

than drop the call. 

• If the information comes directly from the carriers, someone—FCC or 

state officials—would need to monitor the measurements to ensure that 

all carriers were complying with the regulations, and this could add to 

the cost of government oversight. 

As a result of these potential drawbacks, FCC and industry participants and 

representatives note that efforts to require FCC or carriers to report more 

detailed call quality information or complaints could drive up the price of 

mobile phone service, limit entry of new carriers, create an uneven playing 

field in terms of carriers using various technologies, provide the 

marketplace with measurements that may not reflect better service, and 

drive up the costs of government oversight of the industry. 

According to some parties, giving customers longer trial periods before 

they have to commit to a 1- or 2-year contract—an option that provides 

customers with a first-hand opportunity to ascertain whether a carrier’s call 

quality meets their needs—could avoid some of these potential drawbacks. 

The Consumer & Governmental Affairs Bureau at FCC recommends that 

consumers read contracts thoroughly and insist on being given a period of 

time to test the phone and service before being tied to a long-term contract. 

FCC officials noted that no information from carriers is going to be tailored 

to the specific usage patterns of individual consumers. For example, 

because some building materials block radio signals in areas where carrier 

information shows that service is available, service may not be available 

inside some buildings where customers want to use mobile phones. The 
Page 34 GAO-03-501 Mobile Phone Call Quality

largest carriers have been extending their trial periods and now generally 

allow 14 to 30 days. Some interested parties have suggested that longer 

periods of up to 2 months would be more effective. However, giving longer 

trial periods may raise the cost of signing up customers and could lead to 

an increase in the price of service.

FCC, industry representatives, and the press have also noted that 

consumers have access to various sources of information other than the 

carriers. For example, some have pointed to the brochure on the FCC Web 

site, which is included as appendix III in this report. In addition, they noted 

that information is available from news and magazine stories and from 

various Internet sites. Finally, they noted that one of the best sources of 

information on call quality may be neighbors and coworkers who are using 

their phones in ways that are similar to a new customer’s potential use.

Suggestions Included 

Setting Minimum Call 

Quality Standards 

To more directly affect call quality, some interested parties suggested that 

carriers should be required to meet certain minimum quality standards, 

such as a minimum percentage of calls that must be successfully 

completed. As a result, consumers could expect that all calls would meet 

these minimum standards. This proposal would require establishing and 

measuring a common set of network performance standards. In addition, 

some entity would need to oversee compliance with the standard. FCC 

officials said that requiring a specific level of service quality, such as a 

percentage of calls that must be completed, might actually reduce the 

amount of competition and service in the mobile phone market. Officials 

said, for example, that if a certain level of service had to be provided, some 

carriers now offering service might have to leave a particular market. If 

fewer carriers provide service in these markets, prices would likely rise, 

and consumers would likely have fewer choices. Moreover, in rural, 

mountainous, and other hard-to-serve areas where some service is now 

available, requiring minimal levels of service might discourage carriers 

from serving these areas at all.

Carriers Say They Are 

Taking Actions to Improve 

Call Quality

The national carriers we spoke with said that they recognize that call 

quality is important to consumers and that they are taking actions to 

improve call quality. However, carriers noted that they face financial and 

regulatory constraints when they attempt to add base stations to either 

provide service where none previously existed or increase network 

capacity. These constraints include the following:
Page 35 GAO-03-501 Mobile Phone Call Quality

• Adding base stations involves capital expenditures. While carriers had 

easy access to capital markets in the 1990s, the downturn in the 

telecommunications industry made it more difficult for carriers to 

access these markets. In addition, carriers and financial analysts noted 

that carriers are facing a number of regulatory requirements—such as 

local number portability and E-911 service—and that, to meet these 

requirements, they must use scarce capital resources that could be used 

to build out their networks. 

• Adding base stations also involves securing suitable locations and 

zoning approvals. According to industry data, almost 36,000 antennas 

were installed between June 2000 and June 2002. Officials at all six of 

the national carriers we spoke with said that local zoning provisions 

limit their ability to site antennas in the most desirable locations. Some 

of these carriers said that it often takes many months to obtain 

permission to construct antennas. 

Carriers noted that they could offset some of the need to build more base 

stations if the federal government would allocate additional radiofrequency 

spectrum for commercial mobile phone service. However, other 

commercial and government users are already using other parts of the 

spectrum that are suitable for mobile phone service. Thus, providing more 

spectrum has proved to be a difficult and contentious issue.28

Conclusions As Americans have come to rely more on mobile phones to meet their 

business and personal needs, it is important that FCC evaluate whether 

competition is adequate to ensure that mobile phone consumers are 

receiving the level of call quality they desire and expect. However, FCC has 

not yet undertaken such an evaluation in its annual report on competitive 

market conditions in the mobile phone service industry. Collecting and 

analyzing information on call quality would provide an ongoing record to 

help determine whether the current regulatory framework for call quality is 

adequate or whether certain actions—such as establishing call quality 

28See U.S. General Accounting Office, Defense Spectrum Management: More Analysis 

Needed to Support Spectrum Use Decisions for the 1755-1850 MHz Band, GAO-01-795

(Washington, D.C.: August 2001); Telecommunications: Better Coordination and Enhanced 

Accountability Needed to Improve Spectrum Management, GAO-02-906 (Washington, D.C.: 

September 2002); and GAO-03-277.
Page 36 GAO-03-501 Mobile Phone Call Quality

standards, mandating additional consumer information, or reducing local 

government control over the siting of new base stations—are needed. 

Recommendation for 

Executive Action

To assist FCC in determining whether further regulatory action concerning 

mobile phone call quality is necessary, FCC should include call quality in its 

congressionally mandated annual report on competitive market conditions 

in the mobile phone industry. This report should incorporate an analysis of 

whether market competition is effective in ensuring that carriers are 

meeting consumers’ expectations and desires regarding call quality.

Agency Comments We provided a draft of this report to FCC for review and comment. In its 

comments, which are reprinted in appendix IV, FCC said that it believes 

that the ability of consumers to make informed choices in the marketplace 

is critical to the growth of mobile phone services. FCC noted that 

competition and deregulation in the mobile phone industry have benefited 

consumers in several ways, including lower prices and an increased 

diversity of service offerings. FCC also noted that for carriers to attract and 

maintain customers, they must continue to offer better packages of rates, 

network coverage, and call quality than their competitors. FCC believes 

that these competitive forces will continue to compel carriers to monitor 

and improve the quality and performance of their networks. Regarding our 

recommendation, FCC agreed, to the extent possible, to include 

information related to call quality in its future reports on competition in 

mobile phone services. However, FCC noted some difficulties in 

implementing the recommendation, such as data not being readily 

available, the lack of objective performance standards, and difficulties in 

measuring call quality against consumer expectations.

As agreed with your office, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 5 days after the 

date of this letter. At that time, we will send copies of this report to the 

appropriate congressional committees; the Chairman, FCC; and other 

interested parties. We will make copies available to others upon request as 

well. In addition, the report will be available at no charge on the GAO Web 

site at www.gao.gov. If you have any questions about this report,
Page 37 GAO-03-501 Mobile Phone Call Quality

please contact me at 202-512-4325 or shearw@gao.gov. Key contacts and 

major contributors to this report are listed in appendix V.

Sincerely yours,

William B. Shear

Acting Director, Physical Infrastructure Issues
Page 38 GAO-03-501 Mobile Phone Call Quality

Appendix I

Scope and Methodology AppendxiI Apendxies

To respond to the objectives of this report, we gathered information from a 

variety of sources. First, we reviewed the relevant literature on mobile 

phone networks, the relevant laws and regulations governing the delivery 

of mobile phone service, and studies of competition and consumer 

satisfaction in the mobile phone industry in the United States and selected 

foreign countries. Second, we obtained the views of a variety of experts on 

various aspects of mobile phone call quality. These experts included 

government officials from the Wireless Telecommunications Bureau and 

Consumer & Governmental Affairs Bureau at FCC, FTC, and the offices of 

attorneys general or public utility commissions in California, New York, 

Illinois, Massachusetts, Nebraska, New Jersey, and Texas. We also 

contacted representatives of the six nationwide U.S. mobile phone service 

carriers—AT&T Wireless, Cingular, Nextel, Sprint PCS, T-Mobile USA, and 

Verizon Wireless. Representatives of all of the carriers except AT&T 

Wireless answered our questions in person or over the phone; AT&T 

Wireless responded to questions in writing. In addition, we interviewed 

representatives of the mobile phone industry’s primary trade group, the 

Cellular Telecommunications & Internet Association; consumer advocates; 

lawyers representing various interested parties; financial analysts; 

consulting firms; companies that install equipment to improve call quality; 

and companies that conduct drive tests of the networks. Third, we 

provided questions on call quality for a nationwide phone survey of adult 

consumers that included questions on multiple topics submitted by various 

organizations. Finally, we reviewed Web sites to determine the types and 

quality of information on call quality available to consumers on the 

Internet.

To better understand the regulatory framework we reviewed the FCC 

rulemakings and notices that set up the original cellular rules, and other 

relevant rulemakings, hearings, and notices that relate to setting rules of 

the operation of mobile phone markets. We also examined the 

Communications Act of 1934, Omnibus Budget Reconciliation Act of 1993, 

and Telecommunications Act of 1996, the three major pieces of legislation 

that set the statutory framework for mobile phone markets. In addition, we 

reviewed several recent cases and court rulings, including several focusing 

upon the jurisdictions of the state and federal government over this sector. 

Furthermore, we examined FCC’s recent annual reports on competitive 

market conditions in the mobile phone service industry. Finally, we spoke 

with mobile phone industry representatives and financial analysts to learn 

their views on the extent of competition. 
Appendix I

Scope and Methodology

Page 39 GAO-03-501 Mobile Phone Call Quality

To determine the extent to which consumers are experiencing call quality 

problems, we sought data regarding call quality problems through several 

means. 

Carriers and other firms: We asked the six nationwide carriers for their 

data on the extent of call quality problems and other aspects of their 

services, including billing, contracts, marketing, and customer service. We 

also asked the carriers about factors they see affecting call quality. While all 

of the carriers provided us with some information about their networks, 

they did not provide us with geographic specific call quality data that we 

would need to help determine the extent of call quality problems. The 

carriers also provided us with information about factors that affect call 

quality, and we obtained further information on these factors by speaking 

with companies in investment banking, antenna leasing, and the 

development and manufacturing of mobile phone equipment. Finally, we 

contacted several companies that collect network performance data, 

including Telephia Inc., LCC International Inc., and Scoreboard. Some of 

these companies conduct “drive tests”1

 for the carriers. During these tests, 

computers are used to simultaneously place calls on the networks of 

various carriers. The computers then record whether calls went through 

and whether they were dropped within some specified call time, such as 2 

minutes.

Consumer complaints: We attempted to determine the extent of call 

quality problems, as experienced by consumers. The six nationwide 

carriers were unwilling to share information on customer surveys or 

complaint data. We contacted the state public utility commissions to learn 

whether they collect complaint data on mobile phone service or otherwise 

regulate mobile phone service. Thirty-three state commissions responded 

voluntarily to our request for information on whether they regulate mobile 

phone service or categorize complaints. Of the six states that collect 

complaints, California and Texas provided us with their data. We collected 

consumer complaint data from FCC and FTC. We turned to consumer 

groups that collect such complaints—including the Wireless Consumer 

Alliance and Better Business Bureau—as well. Because none of these 

sources adhere to a common standard for categorizing complaints or a 

system to ensure that several sources are not collecting complaints from 

the same consumer, we were not able to use these data to reach overall 

conclusions about the extent to which consumers are experiencing call 

1

Drive tests are generally performed in vehicles traveling along major road arteries. 
Appendix I

Scope and Methodology

Page 40 GAO-03-501 Mobile Phone Call Quality

quality problems. Finally, we reviewed sources of information on the 

Internet. Several sites allow consumers to report their experiences with 

their mobile phone service; however, none of the sites we visited said that 

they verify the information or delete it when it is no longer timely. 

Consumer surveys: We collected data from consumer surveys. We spoke to 

officials at Yankee Group, J.D. Power & Associates, and AARP about the 

surveys they have conducted. Because these surveys did not provide all of 

the information about call quality in which we were interested, we also 

contracted with an international market research firm to administer 26 

questions as part of a nationwide, multipurpose, Random Digit Dialing 

telephone survey of adults conducted between November 8 and 10, 2002. 

Our questions addressed issues such as call quality, satisfaction with the 

quality of mobile phone service, complaint-making practices, and factors 

involved in decisions to change companies. Five hundred fifty-two of the 

1,027 survey respondents had mobile phones and answered at least some of 

the 25 questions in addition to the preliminary screener question. The 

survey results were weighted by various demographic characteristics—

gender, age, race, and education level.

The survey results are derived from a sample of the population. This 

sample was one of a large number of samples that might have been drawn 

from that population. The results from the sample that was actually 

selected are subject to sampling error; that is, the extent to which they 

differ from what would have been obtained if information had been 

gathered from the entire population. We express confidence in the 

precision of survey results as 95-percent confidence intervals, for example, 

plus or minus 8 percentage points. For this survey, we estimate that for the 

survey questions that applied to all of the respondents who used mobile 

phones (417 or more) the 95-percent confidence intervals are plus or minus 

8 percentage points, or less. Because fewer respondents answered the 

questions relating to changing carriers (between 112 and 144), the 

confidence intervals for these estimates are generally larger—plus or 

minus 15 percentage points, or less.

Practical difficulties encountered in conducting this survey may introduce 

nonsampling errors as well. As in any survey, differences in the wording of 

questions, the sources of information available to respondents, and the 

types of people who do not respond may have led to errors that we could 

not assess. We took several steps to minimize some of these nonsampling 

errors. For example, we developed our survey questions with the aid of a 

survey specialist and pretested the questions. However, we are concerned 
Appendix I

Scope and Methodology

Page 41 GAO-03-501 Mobile Phone Call Quality

about the potential for those who did not respond to the survey to differ 

from those who did respond in some way that could affect the results. We 

have no explicit reason for suspecting that the survey suffers from this 

shortcoming. Instead, our concern arises out of the large sample of phone 

numbers dialed to produce about 1,000 survey respondents—a response 

rate of about 13 percent of the estimated eligible population.2

 The survey 

results were weighted so that the overall demographic characteristics of 

our sample match the gender, age, race, and educational characteristics of 

the national population as measured in the Census Bureau’s March 2001 

Current Population Survey. We have no basis for determining to what 

extent this weighting adjusted for the views of the 87 percent of the sample 

who were not interviewed.

2

Of the 19,194 numbers called, 4,572 numbers were ineligible for reasons such as the 

respondent’s telephone was not working or the number was not a residential household 

number. Of the remaining 14,622 numbers, for 1,027 of the numbers, an eligible respondent 

completed the survey; for 2,055 of the numbers, the telephone was answered, but the 

interview was not completed for reasons such as the appropriate respondent was not 

available or refused to participate in the survey. For the other 11,540 numbers, no interview 

was conducted for reasons such as there was no answer or the call was answered by an 

answering machine. As a result, we were not able to determine if these numbers met the 

eligibility requirements for our survey. Of these 11,540 telephone numbers, we estimate that 

4,646 were eligible, for an overall estimated total of 7,728 numbers that met the eligibility 

requirements for our survey.
Page 42 GAO-03-501 Mobile Phone Call Quality

Appendix II

Results of Consumer Survey on Mobile Phone 

Service ApendxiI

The following results, which are based on responses to our national telephone 

survey of adults in the United States, were used in our analysis of the extent to 

which consumers are experiencing call quality problems. Not shown are some of 

the interviewer’s transitions between questions or explanations of the options for 

answering. After each question, the number of responses (n) that were included 

in our analysis is noted. For questions where the number of responses is greater 

than 400, the sampling error is plus or minus 8 percentage points or less. For the 

other questions the sampling error is plus or minus 15 percentage points, or less.

Percentages may not add up to 100 percent due to rounding. 

Question 1: Do you have a cell phone? (n=1,026) 

Yes 56% 

No 44% 

Question 2: About how many times a week do you try to use your cellular phone 

to either make or receive phone calls? (n=566) 

None 6% 

1 – 20 times 55% 

21- 50 times 20% 

Over 50 times 20% 

Question 3: How often do you have a problem making a call because you are in 

an area where there is no service? (n=567) 

Never 22% 

Less than 10 percent of the time 44% 

Between 10 percent and one-third of the time 21% 

More than one-third of the time 12% 

Question 4: How often do you have a problem with getting a call through 

because you get a fast busy signal or a message that says the call failed?

(n=566)

Never 32% 

Less than 10 percent of the time 47% 

Between 10 percent and one-third of the time 16% 

More than one-third of the time 5% 

Question 5: How often do you have a problem with a call being cut off or 

dropped before you finish a call? (n=566) 

Never 39% 

Less than 10 percent of the time 39% 

Between 10 percent and one-third of the time 16% 

More than one-third of the time 6% 
Appendix II

Results of Consumer Survey on Mobile Phone 

Service

Page 43 GAO-03-501 Mobile Phone Call Quality

Question 6: How often do you have a problem hearing or understanding what 

the other person on the phone is saying because of a bad connection or an 

echo? (n=569) 

Never 32% 

Less than 10 percent of the time 38% 

Between 10 percent and one-third of the time 21% 

More than one-third of the time 9% 

Question 7: Where do any of these problems with the quality of your calls most 

often occur? (n=519) 

Inside a building 45% 

Traveling in a car or other vehicle 37% 

Somewhere else outside 18% 

Question 8: Now we would like to sum up your satisfaction with the overall 

quality of your cellular calls, including how often the calls go through, stay 

connected, and can be clearly heard. Are you satisfied, dissatisfied, or neither 

with the overall quality of your calls? (n=566) 

Satisfied 83% 

 Very satisfied 47% 

 Somewhat satisfied 36% 

Dissatisfied 9% 

 Very dissatisfied 3% 

 Somewhat dissatisfied 6% 

Neither 8% 

Question 9: Since you first started using cellular phones, do you think that the 

general quality of your cellular calls, including how often the calls go through, 

stay connected, and can be clearly heard, has improved, gotten worse or 

stayed the same? (n=563) 

Improved 47% 

 Somewhat improved 25% 

 Greatly improved 22% 

Gotten worse 5% 

 Gotten somewhat worse 4% 

 Gotten much worse 1% 

Stayed the same 47% 
Appendix II

Results of Consumer Survey on Mobile Phone 

Service

Page 44 GAO-03-501 Mobile Phone Call Quality

Question 10: Consider the accuracy of the bills you receive for your cellular 

phone service and think about whether you have been charged for calls or 

services you didn’t make or didn’t sign up for. Would you say that you are 

satisfied, dissatisfied, or neither with the accuracy of your bills? (n=543) 

Satisfied 81% 

 Very satisfied 57% 

 Somewhat satisfied 24% 

Dissatisfied 11% 

 Very dissatisfied 4% 

 Somewhat dissatisfied 7% 

Neither 8% 

Question 11: Considering what you pay for the package you get, the features you 

get on the phone, any problems you may have, and the quality of service you 

receive, are you satisfied, dissatisfied, or neither with the value you get for the 

money you pay? (n=548) 

Satisfied 78% 

 Very satisfied 45% 

 Somewhat satisfied 33% 

Dissatisfied 15% 

 Very dissatisfied 5% 

 Somewhat dissatisfied 10% 

Neither 8% 

Question 12: Would you be willing to pay more than you are now paying to have 

higher overall call quality, including more completed calls, fewer dropped 

calls, and better connections? (n=565) 

Yes 12% 

No 83% 

It depends 5% 

Question 13: Have you been able to use your cell phone in all the areas and places 

you had expected when you purchased your service? (n=562) 

Yes 74% 

No 26% 

Question 14: In the past year, did you ever complain about the quality of your 

calls to your cellular phone company? (n=571) 

Yes 19% 

No 81% 

Question 15: In the past year, did you ever complain about the quality of your 

calls anywhere else, like the FCC, a state agency, the Better Business Bureau?

(n=571)

Yes 1% 

No 99% 
Appendix II

Results of Consumer Survey on Mobile Phone 

Service

Page 45 GAO-03-501 Mobile Phone Call Quality

Question 16: Have you used your cellular phone for 2 years or less or for more 

than 2 years? (n=571) 

2 years or less 37% 

More than 2 years 63% 

Question 17: Are you the person who decides which cellular phone company’s 

service you will use, or does someone else like another family member or 

employer make that decision for you? (n=569) 

I decide 73% 

Someone else decides 27% 

Question 18: Since you first became a cellular service customer, have you 

changed your cellular phone company? (n=417) 

Yes 35% 

No 65% 

Changed because original company quit 0% 

 providing service 

 

Question 19: How important in your decision to change cellular companies were 

call quality problems such as calls not going through, calls not staying 

connected, or not being clearly heard? (n=142) 

Very 34% 

Somewhat 21% 

Not at all 45% 

Question 20: How important in your decision to change cellular companies were 

billing problems such as incorrect charges or confusing billing? (n=144) 

Very 28% 

Somewhat 19% 

Not at all 53% 

Question 21: How important was the cellular phone handset provided by your new 

cellular company in motivating you to change cellular companies? This 

includes things like available features, or phone style and appearance. Were 

the differences in handsets very, somewhat, or not at all important? (n=142) 

Very 15% 

Somewhat 27% 

Not at all 58% 

Question 22: How important was getting a lower price in your decision to change 

cellular companies? (n=144) 

Very 57% 

Somewhat 26% 

Not at all 17% 
Appendix II

Results of Consumer Survey on Mobile Phone 

Service

Page 46 GAO-03-501 Mobile Phone Call Quality

Question 23: Have you ever wanted to change your cellular phone company but 

did not change for some reason? (n=417) 

Yes 28% 

No 72% 

Question 24: We would like to know why you may not have changed cellular 

companies, even though you wanted to. How important was a contract 

termination fee required by your current cellular company in keeping you from 

changing cellular companies? Was the contract termination fee very, 

somewhat, or not at all important? (n=112) 

Very 52% 

Somewhat 18% 

Not at all 25% 

No termination fee applied 6% 

Question 25: How important was having to get a new telephone number in 

keeping you from changing cellular companies? Was having to change 

telephone numbers very, somewhat, or not at all important? (n=114) 

Very 23% 

Somewhat 18% 

Not at all 58% 

Number not changed 1% 

Question 26: How important was the inability to continue using your current 

cellular phone handset in keeping you from changing cellular companies? Was 

having to change handsets very, somewhat, or not at all important? (n=113) 

Very 21% 

Somewhat 21% 

Not at all 57% 

Handset stayed same 1% 
Page 47 GAO-03-501 Mobile Phone Call Quality

Appendix III

FCC Fact Sheet on Mobile Phone Service ApendxiI

Among its duties, FCC’s Consumer & Governmental Affairs Bureau 

educates and informs consumers about telecommunications services. To 

this end, the Bureau has produced a number of consumer alerts and fact 

sheets, six of them dealing with mobile phone service. Among these, is a 

new fact sheet called What You Should Know About Wireless Phone 

Service. Posted on FCC’s Web site at www.fcc.gov/cgb/wirelessphone.pdf, 

the new fact sheet has been accessed an average of 60,000 to 70,000 times 

per month, according to FCC officials. This fact sheet appears on the 

following page.
Appendix III

FCC Fact Sheet on Mobile Phone Service

Page 48 GAO-03-501 Mobile Phone Call Quality
Appendix III

FCC Fact Sheet on Mobile Phone Service

Page 49 GAO-03-501 Mobile Phone Call Quality
Appendix III

FCC Fact Sheet on Mobile Phone Service

Page 50 GAO-03-501 Mobile Phone Call Quality
Appendix III

FCC Fact Sheet on Mobile Phone Service

Page 51 GAO-03-501 Mobile Phone Call Quality
Appendix III

FCC Fact Sheet on Mobile Phone Service

Page 52 GAO-03-501 Mobile Phone Call Quality
Appendix III

FCC Fact Sheet on Mobile Phone Service

Page 53 GAO-03-501 Mobile Phone Call Quality
Appendix III

FCC Fact Sheet on Mobile Phone Service

Page 54 GAO-03-501 Mobile Phone Call Quality
Appendix III

FCC Fact Sheet on Mobile Phone Service

Page 55 GAO-03-501 Mobile Phone Call Quality
Page 56 GAO-03-501 Mobile Phone Call Quality

Appendix IV

Comments from the Federal Communications 

Commission ApendxiIV
Appendix IV

Comments from the Federal Communications 

Commission

Page 57 GAO-03-501 Mobile Phone Call Quality
Appendix IV

Comments from the Federal Communications 

Commission

Page 58 GAO-03-501 Mobile Phone Call Quality
Page 59 GAO-03-501 Mobile Phone Call Quality

Appendix V

Key Contacts and Major Contributors ApendxiV

GAO Contacts John P. Finedore, (202) 512-6248

Nancy S. Barry, (617) 788-0550

Staff 

Acknowledgments

In addition to those named above, David Dornisch, Christine Houle, 

Sara Ann Moessbauer, Tom Taydus, Ed Warner, and Mindi Weisenbloom 

made key contributions to this report.

(545014)
GAO’s Mission The General Accounting Office, the audit, evaluation and investigative arm of 

Congress, exists to support Congress in meeting its constitutional responsibilities 

and to help improve the performance and accountability of the federal government 

for the American people. GAO examines the use of public funds; evaluates federal 

programs and policies; and provides analyses, recommendations, and other 

assistance to help Congress make informed oversight, policy, and funding 

decisions. GAO’s commitment to good government is reflected in its core values of 

accountability, integrity, and reliability.

Obtaining Copies of 

GAO Reports and 

Testimony

The fastest and easiest way to obtain copies of GAO documents at no cost is 

through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and fulltext files of current reports and testimony and an expanding archive of older 

products. The Web site features a search engine to help you locate documents 

using key words and phrases. You can print these documents in their entirety, 

including charts and other graphics.

Each day, GAO issues a list of newly released reports, testimony, and 

correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site 

daily. The list contains links to the full-text document files. To have GAO e-mail this 

list to you every afternoon, go to www.gao.gov and select “Subscribe to GAO 

Mailing Lists” under “Order GAO Products” heading.

Order by Mail or Phone The first copy of each printed report is free. Additional copies are $2 each. A check 

or money order should be made out to the Superintendent of Documents. GAO 

also accepts VISA and Mastercard. Orders for 100 or more copies mailed to a single 

address are discounted 25 percent. Orders should be sent to:

U.S. General Accounting Office

441 G Street NW, Room LM

Washington, D.C. 20548

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061

To Report Fraud, 

Waste, and Abuse in 

Federal Programs

Contact:

Web site: www.gao.gov/fraudnet/fraudnet.htm

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470

Public Affairs Jeff Nelligan, Managing Director, NelliganJ@gao.gov (202) 512-4800

U.S. General Accounting Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548
United States

General Accounting Office

Washington, D.C. 20548-0001

Official Business

Penalty for Private Use $300

Address Service Requested

Presorted Standard

Postage & Fees Paid

GAO

Permit No. GI00