WASHINGTON-The California Public Utilities Commission is set to vote this month on a measure that would create a first-in-the-nation Telecommunications Consumer Fraud Unit. The fraud unit proposal is part of the new version of the controversial Consumer Bill of Rights.
Also in the new Bill of Rights is a proposal for a consumer-education campaign as well as a proposal to extend the CPUC’s toll-free consumer hotline.
“With traditional regulation it takes years to bring a case against a company that is ripping off consumers-that won’t work in today’s fast-paced telecom world. This proposal gives the CPUC the tools to protect consumers against fraud in real-time, and provides consumers with the tools they need to protect themselves,” said CPUC Commissioner Susan Kennedy, a pro-business Democrat.
Kennedy will not be around for the vote-currently scheduled for Jan. 26-because she is leaving the CPUC to become chief of staff to California Republican Gov. Arnold Schwarzenegger.
The proposed rules were issued jointly by Kennedy and CPUC President Michael Peevey.
Verizon Wireless wasted no time blasting the proposed rules.
“Verizon Wireless believes that state regulation aimed at the highly competitive, high-tech wireless industry, such as the new burdensome rules, is unnecessary and inappropriate,” said Michael Bagley, Verizon Wireless West area executive vice president of public policy. “California already boasts the toughest consumer-protection laws in the nation, and those laws apply to all competitive industries, including the wireless industry. Adding an extra layer of regulation at the CPUC will hurt and cost consumers.”
Comments on the rules are due Jan. 17, and replies are due Jan. 23.
How Kennedy’s departure impacts the vote on the new proposal is unclear. At a minimum, rounding up a majority of the five-member CPUC to approve the new proposal will be more difficult. However, it is possible Schwarzenegger could appoint Kennedy’s replacement in time for the vote.
Peevey and Kennedy voted against the bill of rights approved by the CPUC in 2004. At the same time, two of the three commissioners who voted for the rule have since left the agency. Schwarzenegger, who along with the mobile-phone industry opposes additional wireless regulations, filled the vacancies with Dian Grueneich, a Democrat, and Republican John Bohn.
In 2005, Grueneich joined Kennedy and Peevey in suspending the bill of rights. The guidelines cover wireless and wireline carrier disclosure, marketing, service initiation and changes, billing and other business practices. The guidelines were crafted through compromise by CPUC Commissioner Geoffrey Brown (D) and were supported by consumer proponents, disability rights advocates and others.
The mobile-phone industry-which had largely stayed out of state battles until the CPUC bill-of-rights fracas-has spent hundreds of thousands of dollars on lobbyists in an effort to upend the initiative. Industry fears the initiative could become an attractive regulatory model for other states. Mobile-phone carriers are lobbying Congress and the Federal Communications Commission to further pre-empt state regulation of wireless phone operators. The wireless industry would like to see remaining state wireless jurisdiction reined in on any telecom rewrite or broadband legislation in Congress.
