WASHINGTON-As the bill-of-rights brawl in California enters a critical stage, emerging developments on the federal front could end up eclipsing state regulator Susan Kennedy’s campaign to enact by year’s end a consumer protection regime far less regulatory than the one approved last year to the disdain of the mobile-phone industry and Gov. Arnold Schwarzenegger.
Given a choice, cellular carriers prefer the Kennedy plan to the bill of rights championed by Geoffrey Brown of the California Public Utilities Commission last year. But with efforts progressing on Capitol Hill and at the Federal Communications Commission to further pre-empt state regulation of wireless operators, the mobile-phone industry is telling Kennedy and the rest of five-member CPUC that no new consumer protection guidelines are necessary.
That outcome is unlikely, despite the fact the CPUC-owing to the departure late last year of two consumer-friendly commissioners-is today more open to views of regulated telecom businesses than it was when the agency approved the bill of rights in May 2004. At that time, Schwarzenegger and the mobile-phone industry warned that the imposition of new rules governing disclosure, billing, marketing, contracts and other carrier practices ultimately could hurt consumers and the state economy.
Industry, fearing a regulatory-heavy bill of rights in California could serve as a template for other states, has poured hundreds of thousands of dollars on California lobbyists and lawyers in hopes of derailing the effort.
After the CPUC suspended the bill of rights in January in order to re-examine the rule, the Democratic-controlled state legislature decided to weigh in. The state Senate in May passed bill-of-rights legislation modeled on the CPUC rule, but the measure fizzled in the California State Assembly months later. There is an outside chance an assembly committee could call a second vote on the legislation in coming weeks.
It is unclear how Schwarzenegger is positioning himself on the Kennedy bill of rights. Indeed, the governor could feel compelled to back Kennedy in recognition of the battle she waged to suspend the existing bill of rights until she could rewrite one of her own. In late July, Schwarzenegger signed into law a bill of rights for used car buyers.
Kennedy, for her part, has invested much energy and many resources on her bill of rights, and unlikely wants to walk away empty-handed. Indeed, this time around there is a solid chance Kennedy has the votes to get her bill of rights through the CPUC.
Meantime, the bill of rights battle is heating up again.
Opening testimony was filed earlier this month. Reply testimony is due Sept. 9, setting the stage for formal hearings Sept. 28-30 in San Francisco. A proposed decision is slated for November, with a CPUC vote on a final decision set for Dec. 15.
Written testimony offered no new surprises.
Wireless carriers and paid industry consultants argued the industry is competitive and therefore no new consumer protections for wireless subscribers are necessary in California.
“Given that the FCC extended its truth-in-billing regulations to wireless carriers, U.S. Cellular and other wireless carriers must comply with federal regulations that ensure that customers’ bills are clear and non-misleading, as well as help customers make informed choices. If the [CPUC] adopts detailed regulations for wireless carriers’ billing practices, the [CPUC] runs the risk of adopting rules that would be duplicative or inconsistent with the FCC’s existing requirements,” stated Bradley Stein, director of external affairs at U.S. Cellular Corp.
Stein concluded: “I find it difficult to believe that California statues do not already contain enough general consumer protection and fair business practice laws to protect California’s wireless consumers, as they protect consumers purchasing other competitive products and services.”
Consumer advocates say the Kennedy plan is weak and called for the reinstatement of the 2004 bill of rights.
“There is ample evidence in this record and in other proceedings to justify the nature of the regulations originally adopted by the commission in May 2004,” stated Barbara Alexander, a former Maine PUC official, on behalf of The Utility Reform Network. “The proposed reinstated rights and rules are not sufficient. They appear to adopt generic principles without specific and enforceable requirements. They lack the necessary disclosure requirements that reflect the specific nature of the telecommunications industry and the competitive forces at work.”
