WASHINGTON—California state Sen. Martha Escutia (D) today said she plans to redouble efforts to pass a law creating a consumer telecom bill of rights similar to the one utility regulators approved in 2004, but dramatically altered yesterday.
“Six years of effort and this was the best they could do,” said Sen. Escutia, noting that the CPUC began this effort in 2000. “The commission totally ignored the evidence provided by consumers, but it is another example of how this commission ignores the needs of the average citizen.”
Escutia said that while increased enforcement and consumer education efforts to be pursued by the California Public Utilities Commission are important, they don’t substitute for strong consumer protection rules. She said strong consumer protection rules include requiring clear disclosure of rates, terms and conditions of service and requiring companies that market in a language other than English also provide contracts and disclosures in that same language.
“The commission could have prevented problems before they occur had they approved the Grueneich proposal,” said Escutia, referring to a previous bill-of-rights proposal. “Instead the commission will step in only after a customer gets ripped off, and even then the customer might not get any help because the commission has failed to adopt any clear rules to enforce. Given the failure of the CPUC to protect consumers against the worst of the abuses, it is now time for the Legislature to act. I’ll pursue my [bill] to create some common sense rules for the cellular telephone companies and see if we can right the CPUC’s wrong.”
The state Senate approved Escutia’s bill last year, but it died in the Senate.
Yesterday, a divided CPUC voted to replace the existing bill of rights for telecom consumers with one far less regulatory and highly dependent on state enforcement.
“This decision is a prime example of the commission’s desire to use the power of market forces whenever possible in lieu of Commission edict,” said CPUC President Michael R. Peevey on approving the new bill. “Static rules in a dynamic, competitive environment are not the best use of this commission’s resources. Instead, we should be providing timely information to educate consumers and promptly enforce our rules. These basic principles will stand the test of time even as the telecommunications market continues to evolve.”
The Peevey plan was largely crafted by former commissioner Susan Kennedy, a pro-business Democrat who left the agency to become chief of staff to GOP Gov. Arnold Schwarzenegger in January.
Peevey, also a pro-business Democrat, was joined in today’s vote by Schwarzenegger-appointed GOP Commissioners John Bohn and Rachelle Chong.
Dian Grueneich, a Democrat put on the CPUC by Gov. Arnold Schwarzenegger, picked up qualified support from Commissioner Geoffrey Brown for an alternate plan with fewer wireless guidelines than the existing bill of rights but more regulatory than the Kennedy-Peevey proposal.
By the same 3-to-2 margin as today’s vote, the CPUC in May 2004 approved a Brown-authored bill of rights containing new guidelines governing disclosure, billing, marketing and other business practices of wireless carriers and other telecom operators. The mobile-phone industry and Schwarzenegger were highly critical of the 2004 ruling. The wireless industry preferred the Kennedy-Peevey bill of rights over the Grueneich plan, but argued no new state wireless regulations were necessary. Still, today’s action by the CPUC is a major victory for industry. The decision is apt to renew efforts in the Democratic-controlled California legislature to pass a telecom consumer bill-of-rights law along the lines of the Brown rule that was effectively eviscerated yesterday in San Francisco.
Brown called the new Kennedy-Peevey bill of rights “an inducement to massive, pervasive and unaccountable fraud” and a “deception designed to hoodwink the public into thinking the PUC is actually protecting them.”
