FCC bill shock proposal exposes carriers to greater legal woes, analyst says

The biggest risk facing wireless carriers on the Federal Communications Commission's bill shock proposal is not so much the proposal itself but that it could open the companies up to consumer lawsuits, according to investment analyst Jeffrey Silva of Medley Global Advisors.

As seen with previous episodes when lawmakers or the FCC focus on consumer issues, the FCC's bill shock push could awaken "a new business opportunity in the wireless litigation space," Silva wrote in a research note. Silva estimates the wireless industry has spent more than $100 million on lobbying, legal fees and court settlement related to consumer policies. Verizon in 2008 reached a $21 million settlement for a class action suit against its use of early termination fees. In January 2010, AT&T reached an $18 million class action settlement on early termination fees and Sprint Nextel also settled an ETF class action suit about the same time.