WASHINGTON-A deal has been struck on California’s controversial proposal to create a bill of rights for telecom consumers, opening the way for a vote by state regulators in early spring.
“We’ve reached agreement on everything substantial. … I think it will be ready for a vote in April,” said Carl Wood, a member of the California Public Utilities Commission and author of the bill of rights.
For months, Wood has been working with Commissioner Geoffrey Brown, the crucial swing vote on the PUC, on changes that address concerns of industry and consumer advocates and that can withstand a legal challenge.
With Brown’s support and that of Commissioner Loretta Lynch, Wood has enough votes to get the bill of rights through the five-member PUC. From all accounts, PUC President Michael Peevey and Commissioner Susan Kennedy oppose the Wood initiative. Kennedy toyed with the idea of offering an alternative bill of rights-one that would exempt wireless operators-but she has shelved that strategy for now.
Wood said the revised bill of rights would be put out for public comment in the next week or so. On a parallel track, the PUC will solicit economic impact analyses of the new draft. Last December, Gov. Arnold Schwarzenegger (R) asked the PUC to abide by an executive order freezing regulatory proposals until their economic impact can be assessed.
Wood and Brown said they want to honor that request. The PUC, an independent agency, is not subject to Schwarzenegger’s directive. Given the governor’s six-month regulatory moratorium will not expire until mid-May, the PUC is unlikely to vote before then. But there is no guarantee the vote will occur when the governor’s regulatory review is completed. The PUC has postponed votes on the bill of rights six times since September.
Mobile-phone carriers in California are against the Wood plan. The Cellular Telecommunications & Internet Association, which represents carriers nationwide, has spent at least $200,000 on California lobbyists in hopes of derailing the state’s consumer initiative. The wireless industry, which has crafted a voluntary code of conduct, argues the bill of rights is unnecessary and will hurt California’s struggling economy.
The California PUC is also considering a challenge by Cingular Wireless L.L.C. of a $12 million fine as a result of business practices deemed at odds with state laws.
Meanwhile, customers of Verizon Wireless, the No. 1 mobile-phone operator, have begun to be notified of what is believed to be a record settlement of a class-action lawsuit that could cost the mobile-phone carrier more than $1 billion.
Verizon’s 36 million subscribers are entitled to credits up to $30 for service and $15 for hands-free earbuds.
Last November, Judge William C. Pate of San Diego Superior Court gave preliminary approval to the Verizon Wireless settlement.
The lawsuit, filed in April 2000 by the law firm of Finkelstein & Krinsk and covering customers between 1991 and 2003, challenged the carrier’s billing practices and its failure to inform subscribers of various charges. The law firm had backing from various consumer groups, which rejected the original settlement.
The Verizon Wireless settlement will be published in Parade Magazine, USA Today and a number of regional newspapers, including The Los Angeles Times.
A final settlement hearing is set for April 29.
Elsewhere, Minnesota Attorney General Mike Hatch is pressing a lawsuit against Cellular One in state court for alleged billing overcharges. The lawsuit claims the wireless carrier violated consumer fraud law and engaged in deceptive trade practices. Cellular One is owned by American Cellular Corp., headquartered in Oklahoma City and owned by Dobson Communications Corp.
Nextel Communications Inc., barraged with a slew of class-action billing lawsuits, is banking on a judge’s approval of a settlement pending in Missouri federal court. The Wireless Consumers Alliance, whose opposition to the original Verizon Wireless settlement forced the carrier to make greater concessions, opposes the Nextel settlement.
Back in California, a billing lawsuit in state court is moving forward against Nextel.
The lawsuit was filed by the Foundation for Taxpayer and Consumer Rights in Los Angeles Superior Court. The consumer group claims Nextel’s policy of no longer issuing itemized bills makes it impossible to detect billing errors.
