WASHINGTON-The stakes continue to rise in the telecom consumer bill-of-rights controversy, with the California legislature ready to write the new rule into law and the California Public Utilities Commission considering a sweeping overhaul of the state’s telecom regulatory regime.
Sen. Martha Escutia (D), chairwoman of the Senate Committee on energy, utilities and communications, is expected to be lead sponsor of the bill-of-rights legislation. Randy Chinn, chief of staff for the committee, said he expects legislation to be introduced within days.
While the California legislature puts its strategy into action, the CPUC appears to be looking beyond the bill of rights. Last week, RCR Wireless News obtained a draft copy of a CPUC proposal to launch a rulemaking to assess and revise the regulation of all telecommunications utilities in California except for small incumbent local exchange carriers.
“There have been dramatic changes to the telecommunications landscape in recent years. … These changes to the telecommunications landscape have created a need for the commission to conduct a comprehensive examination of the way it regulates telecommunications services,” the draft order states.
Commissioner Susan Kennedy, the force behind the current campaign to sidetrack the bill of rights, is believed to be the author of the telecom reform proposal. The measure is expected to go before the CPUC at this Thursday’s meeting. Last year, Kennedy toyed with the idea of exempting wireless carriers from the bill of rights before unsuccessfully offering a less-regulatory bill of rights.
Wireless carriers have managed to largely avoid the sting of new consumer rules thus far. Most guidelines were to have gone into effect in December, but state regulators granted extensions for compliance with certain rule subparts. Then, last month, the entire bill of rights was sidelined.
Escutia was one of eight state lawmakers who wrote CPUC President Michael Peevey Jan. 26-the day before the vote to suspend the bill of rights-to urge against indefinitely staying new guidelines designed to promote greater wireless and wireline disclosure in advertising, billing and service contracts.
The letter, which surfaced last week, represented a warning on two levels.
“The commission’s adoption of these rules in May 2004 sent a clear message to cellular and other telephone companies that the commission was serious about creating a marketplace where consumers are treated fairly,” the lawmakers stated. “This flip-flop shows that the public cannot count on the commission to stand by its decisions. It shows the commission can be rolled.”
“If the commission terminates its consumer protection rules via an indefinite stay,” Escutia and other lawmakers continued, “it will reward those telephone companies who are late in implementation and send the message that public participation in a four-year CPUC process is a meaningless exercise. The commission will have abdicated its responsibilities and abandoned California’s consumers, leaving them prey to misleading advertising and incomprehensible contracts. We are hoping for more from this new commission.”
GOP Gov. Arnold Schwarzenegger’s two CPUC appointees-Republican Steve Poizner and Democrat Dian Grueneich-must be approved by the state Senate. The two picks replace former CPUC members Carl Wood and Loretta Lynch, whose terms expired Dec. 31. Wood, Lynch and Commissioner Geoffrey Brown constituted the majority that passed the bill of rights last May. Wood penned the original bill of rights, but he could not muster enough votes for his version of the rule.
On Jan. 27, Grueneich joined Commissioners Susan Kennedy and Michael Peevey in putting the bill of rights on hold. Poizner has yet to cast a vote as a commissioner because lawyers are still reviewing the former Snap Track Inc. executive’s extensive telecom and tech stock holdings. Grueneich and Poizner, once he is sworn in, can participate in CPUC proceedings for up to a year while their nominations are pending in the Senate.
The dispute over the bill of rights is being transformed into a high-profile ideological fight pitting a popular, reform-minded Republican governor, pro-business regulators and the wireless industry against a Democratic-controlled state legislature, pro-consumer regulators, the state attorney general, retirees and consumer advocates.
It is not a run-of-the-mill political squabble. Rather, the bill-of-rights battle-both in symbol and substance-is a major test of Schwarzenegger’s ability to push through his no-nonsense pro-business agenda in a politically liberal state that prides itself on consumerism.
The stakes are just as high for the $100 billion mobile-phone industry, which would send an unmistakable statement to other states if it can defeat a towering telecom consumer regulatory scheme in California that might otherwise become a model for public utility commissions throughout the country.
The mobile-phone industry, Schwarzenegger and Kennedy assert the bill of rights is costly and burdensome and will do more harm than good for consumers and the struggling state economy. Moreover, wireless service providers argue that industry’s voluntary code of conduct adequately addresses consumer complaints.
