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California to Try Again With Telecommunications Bill of Rights

December 29, 2005

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The California Public Utilities Commission (CPUC) will vote in January on a proposal to create a "Telecommunications Consumer Fraud Unit," part of the latest version of the state's controversial Consumer Bill of Rights.

Also in the new Bill of Rights is a proposal for a consumer-education campaign as well as a proposal to extend the CPUC's toll-free consumer hotline.

"With traditional regulation it takes years to bring a case against a company that is ripping off consumers -- that won't work in today's fast-paced telecom world," said CPUC Commissioner Susan Kennedy. "This proposal gives the CPUC the tools to protect consumers against fraud in real-time, and provides consumers with the tools they need to protect themselves."

Kennedy, regarded as a pro-business Democrat, drafted the measure with CPUC President Michael Peevey but she won't be around for the January vote. She's leaving the CPUC to become chief of staff to Gov. Arnold Schwarzenegger, a Republican who opposes additional wireless regulations.

Peevey and Kennedy both voted to suspend the original Telecommunications Consumer Bill of Rights in January 2005 after cell phone companies spent hundreds of thousands of dollars on lobbying efforts.

The latest version isn't being very well received either. Verizon Wireless was the first to issue a broadside against it.

"Verizon Wireless believes that state regulation aimed at the highly competitive, high-tech wireless industry, such as the new burdensome rules, is unnecessary and inappropriate," said Michael Bagley, Verizon Wireless West area executive vice president of public policy.

"California already boasts the toughest consumer-protection laws in the nation, and those laws apply to all competitive industries, including the wireless industry. Adding an extra layer of regulation at the CPUC will hurt and cost consumers," Bagley said.

The new rule's prospects are murky. Passage will require a majority of the five-member CPUC. With Kennedy gone, and possibly not replaced by the time the vote takes place, a majority may be hard to come by.

The new guidelines cover wireless and wireline carrier disclosure, marketing, service initiation and changes, billing and other business practices. The guidelines were crafted through compromise by CPUC Commissioner Geoffrey Brown (D) and were supported by consumer proponents, disability rights advocates and others.

Besides throwing money around in Sacramento, the wireless industry is heavily lobbying Congress and the Federal Communications Commission to further pre-empt state regulation of wireless phone operators. The wireless industry would like to see Congress do away with any remaining state rules affecting wireless and broadband services.

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