WASHINGTON-The California Public Utilities Commission is set to vote this week on three telecom consumer plans, capping a contentious four-year proceeding with an outcome that could change fundamentally the way mobile-phone carriers do business in the state and become a model for the rest of the nation.
The wireless industry, which has aggressively lobbied against proposed rules, appeared left with few options late last week. Indeed, there was a hint industry was ready to concede defeat and had already begun to plot the next move.
It is unclear whether GOP Gov. Arnold Schwarzenegger, who has leaned on key commission members to avoid saddling industry with costly and unnecessary regulations, plans to intervene at some level. The governor’s press office declined to comment. Since becoming governor last year, the popular Schwarzenegger has pressed state agencies to carefully consider the potential economic impact of proposed rules.
The cellular industry has warned that a bill of rights for telecom consumers will hurt California’s already-troubled economy.
Last week, the CPUC declined to overturn a ruling rejecting industry’s request for more time to comment on new bill-of-rights plans offered by Commissioners Susan Kennedy and Geoffrey Brown. Had the commission granted a filing extension, the bill-of-rights vote would have been delayed again as it has been numerous times since last year.
“What they want is to keep the ball rolling. … They don’t want any regulations at all. It’s always the same mantra,” said Brown. Brown said he has grown frustrated with wireless carriers’ refusal to meet him halfway on the bill of rights.
From the start, mobile-phone carriers vehemently opposed the bill of rights-the original and revised versions-written by Commissioner Carl Wood. Wood, who initiated the proceeding in 2000, last week restored consumer safeguards-and regulations-dropped from a now-defunct compromise proposal he and Brown co-authored.
“I think we’re going to get out some proposal. It won’t be Susan Kennedy’s,” predicted Wood.
Consumer groups, state newspapers and California Attorney General Bill Lockyer back the Wood bill of rights.
Commissioners Wood and Loretta Lynch are leaving the CPUC after this year, giving Schwarzenegger an opportunity to install two Republicans on a five-member state regulatory body currently fully occupied by Democrats. A partial regime change offers industry a sliver of hope, because a revamped CPUC could modify or even gut a bill of rights approved this year. Industry could also challenge a bill of rights in court, but wireless carriers still would have to abide by new regulations during a potentially lengthy court appeal.
The industry backlash against the Wood plan-combined with pressure from Schwarzenegger’s office-prompted Kennedy and Brown to craft alternate bills of rights. Wireless carriers claim complaints in their fiercely competitive industry have actually declined in California in recent years.
Scores of consumer lawsuits have been filed against mobile-phone carriers in recent years, some by state attorneys and others by private citizens.
Of the three bills of rights, Wood’s is the most consumer friendly and regulatory. Kennedy’s plan is the most pro-business and deregulatory, mirroring to some degree the wireless industry’s voluntary code of conduct. The approach taken by Brown, who recently broke with Wood, is somewhere in the middle.
The wireless industry last week made crystal clear it desires no new rules, criticizing less regulatory regimes developed by Brown and Kennedy. Kennedy, drawing closely on industry recommendations and dire economic predictions in a study paid for by wireless carriers, was supposed to be the white knight who would rescue mobile-phone firms from the wrath of Wood.
Industry expressed appreciation for Kennedy’s efforts, but had little good to say about her bill of rights.
In comments last Thursday, California cellular carriers said they did not understand why Kennedy-who acknowledged the undisputed state of competition and carriers’ self-policing efforts-“does not cede to the request of wireless industry to endorse the Code [of Conduct] and forbear from further regulation of the industry at this time.”
Industry also criticized Kennedy’s plan “for committing the same error as its predecessors by failing to undertake an economic analysis of the costs and benefits of the set of proposed rules which it advances.”
“If Susan Kennedy’s plan passes, we’ll live with it. It is the best of a bad world,” said Steve Largent, president of the Cellular Telecommunications & Internet Association.
