WASHINGTON-Industry is trying to fend off bill-of-rights measures in two liberal states at opposite ends of the country, while a court battle rages over how regulatory recovery fees are itemized in monthly wireless bills.
The stakes are high for industry. Wireless carriers fear that movements in California and Massachusetts could lead to balkanized wireless regulation throughout the United States. Such an outcome could disrupt business models based on nationwide call plans and, according to industry, undermine the dynamics of competition among top operators Cingular Wireless L.L.C., Verizon Wireless, Sprint Nextel Corp. and T-Mobile USA Inc.
As bill-of-rights battles play out on the two fronts, the cellular industry is trying to persuade the Federal Communications Commission and Congress to further pre-empt state regulation of wireless carriers.
A cellular bill of rights for consumers, sponsored by Massachusetts State Sen. Jarrett Barrios (D) and Rep. Steven Wash (D), was debated Oct. 4 in Boston before the Senate Joint Committee on Telecommunications, Utilities and Energy.
“It’s time for an end to unfair billing practices, outrageous early termination fees, and misleading marketing,” said Barrios. “Consumers have had enough. We should be giving consumers the power to vote with their feet in a truly fair and competitive marketplace.”
The two lawmakers said they want to remedy systemic problems including vague and misleading marketing, poor billing practices, a lack of customer service and aggressive use of extended contract periods and high termination fees that they claim are designed to tie consumers down and make it difficult to drop or change service providers.
The State House News Service quoted Daniel Mullin, executive director of state public policy for Verizon Wireless, as testifying, “If you make us all the same, you take away our incentive to compete.”
The Barrios-Walsh bill is likely to emerge from the committee with some changes, according to a knowledgeable source in the state legislature. Whether the bill advances further is another matter.
The Democratic-controlled California legislature failed this year to pass a broader-based telecom consumer bill-of-rights measure, championed by State Sen. Martha Escutia (D) in response to a January decision by the California Public Utilities Commission to suspend the then seven-month-old bill-of-rights rule.
The California bill of rights, similar to Massachusetts legislation, covers carrier disclosure, marketing and billing practices and service contracts.
CPUC Commissioner Susan Kennedy, who voted against the bill of rights in May 2004 and secured the votes necessary to stop the rule in its tracks earlier this year, is trying to win approval by year’s end of a less regulatory bill of rights. Only one member of the majority that pushed through the 2004 bill of rights-Commissioner Geoffrey Brown-remains at the CPUC. Commissioners Carl Wood and Loretta Lynch, whose terms expired last December, have been replaced by Gov. Arnold Schwarzenegger appointees Dian Grueneich (D) and John Bohn (R).
A scheduled Dec. 15 vote on the revised bill of rights could see Kennedy securing the votes of Bohn and CPUC President Michael Peevey, with Grueneich likely to join Brown. Brown authored the current bill of rights. The wireless industry contends additional state regulations are not necessary, given robust carrier competition and existing consumer protection laws.
Opening testimony was submitted in August, and Kennedy oversaw two days of hearings on the revamped bill of rights late last month. Opening briefs in the proceeding are due Oct. 24.
Meantime, the FCC has asked the 11th U.S. Court of Appeals in Atlanta to throw out challenges to truth-in-billing changes approved by the agency in March.
The FCC in March extended truth-in-billing to wireless carriers, but rejected a request to ban line-item regulatory recovery fees charged by mobile-phone carriers to offset the cost of implementing federal mandates such as local number portability, enhanced 911 and universal service fund contributions. The FCC also pre-empted state regulation of line-item charges.
The National Association of State Utility Consumer Advocates and the Vermont Public Service Board appealed the decision, arguing the FCC exceeded its authority and violated public notice and comment requirements of the Administrative Procedure Act.
In its motion to dismiss the lawsuit, the FCC argues NASUCA and the Vermont PSB lack standing to appeal the agency’s truth-in-billing decision. NASUCA and the Vermont PSB are expected to oppose the FCC motion in a filing they plan to submit to the court today.
