Consumer Federation of California

NEWS RELEASE

AB 2622 (Ruskin) would restore phone cancellation rights repealed by PUC

The Consumer Federation of California released results of a public
opinion poll showing that 87% of California voters want the right to
cancel a new cell phone contract for 30 days without penalty or early
termination fees. AB 2622 (Ruskin) restores this right which was
recently repealed by the California Public Utilities Commission. AB
2622 faces a hearing and vote tomorrow (May 4)in the Assembly Utilities
and Commerce Committee.

"California consumers are fed up with deceptive cell phone
marketing and lousy phone reception,’ said Richard Holober, Executive
Director of the Consumer Federation of California. ‘AB 2622 would give
consumers 30 days to check out a new phone and see if it works
properly. It would give consumers a chance to make sure their bill is
not loaded with charges that were hidden in the fine print when they
signed up."

The Consumer Federation of California is the sponsor of AB 2622.
AB 2622 (Ruskin) restores a right that California consumers
enjoyed under Public Utilities Commission regulations adopted in 2004.
Even before this rule and other elements of the ‘Telecommunications
Consumers Bill of Rights’ took effect, giant cell phone companies were
using their influence with both Gray Davis and Arnold Schwarzenegger to
win new industry-friendly appointments to the PUC.

By 2005, the cell
phone industry gained control of the PUC, and it promptly suspended the
30 day cancellation right along with all elements of the Bill of
Rights. On March 2, 2006, in a 3-2 vote, industry cronies on the PUC
repealed the Bill of Rights and replaced it with a toothless consumer
education project. In the current PUC’s view, regulation is outmoded
and a ‘buyer beware’ approach is a sufficient substitute for
enforceable rights.

Consumer groups and community based organizations
were unanimous in opposing the PUC repeal of the 30 day cancellation
rights.
When California consumers had the 30 day grace period, cell
phone companies grew and prospered in California. Since then, mergers
have reduced competition in the cell phone industry.

Today four
companies ‘ Verizon, Cingular, Sprint-Nextel and T-Mobile ‘ control 80%
of the US cell phone market. "If cell phone companies don’t want
customers to have a reasonable chance to cancel a new contract, then
they should reduce their early termination fees and cut the length of
the contract. As it stands now, consumers need AB 2622 to level the
playing field," said Lenny Goldberg, Legislative Advocate for TURN and
UCAN. (The Utility Reform Network and Utility Consumer Action Network).

"Our network of over 35 community based organizations has taken
in more than 9,000 phone consumer complaints, and found that cell phone
return policies are at the top of the complaint list. Inaccurate
company coverage area maps and complex contracts that are impossible
for limited English speakers to understand make it essential that we
have 30 days to check out the phone and the contract before consumers
get stuck with a long contract and outrageous early termination fees,"
said Ana Montes, Director of Technology and Consumer Education for the
Latino Issues Forum, a lead agency for Communities for Telecom Rights,
a statewide coalition of community based organizations serving limited
English speaking consumers.

Currently, Cingular, Verizon and Sprint-Nextel are subject to a
settlement of a class action lawsuit brought by 32 state Attorneys
General. Under the terms of the settlement, in the affected states the
companies must grant customers a 14 day grace period to cancel new
service without penalty. The settlement agreement expires around the
end of 2007. California was not a party to this case.
In California, for the moment, Cingular, Sprint-Nextel and T-Mobile
have voluntarily maintained the 30 day cancellation policy since the
PUC repealed this regulation. Sprint Nextel and T-Mobile do not grant
customers in other states a 30 day grace period.

About the PollFrom March 28 through March 31, 2006,
Fingerhut Granados Opinion Research conducted a random survey of 500
California voters for the Consumer Federation of California. The margin
of error of this poll is 4.5%. Among the findings:

70% of all voters surveyed use a cell phone. 50% of voters earning less than $30,000 a year are cell phone users.

87% of voters support proposed legislation that would give cell
phone customers 30 days to terminate a new contract without penalties
or early termination fees. Support for this legislation was strong
across the income spectrums. 82% of voters earning under $30,000 a year
support this legislation.
62% of cell phone users believe the early termination fees are
too high. Only 18% believe that early termination fees are just right,
and 20% are not sure if these fees are too high, too low, or just
right.

# # #

FINGERHUT GRANADOS OPINION RESEARCH

Phone: (202) 331-3700 Fax: (202) 331-0505 Cell: (202) 276-0858

1925 K STREET N.W.SUITE 250

WASHINGTON, D.C. 20006

E-Mail: vfingerhut@aol.com

________________________________________________________________________

May 2, 2006

From: Vic Fingerhut, Fingerhut Granados Opinion Research

To: Consumer Federation of California

RE: Overwhelming support for 30 day right to cancel a cell phone contract

Fingerhut Granados Opinion Research conducted a random
survey of 500 California voters for the Consumer Federation of
California. Our stateside survey included a series of questions on cell
phone issues.

We found strong support for increased regulation of many aspects of the
cell phone industry — support which cut across all major regional and
demographic groupings.

Among our findings:

87% of all voters support proposed legislation that would give
cell phone customers 30 days to terminate a new contract without
penalties or early termination fees. Support for this legislation was
strong across all income groups. 82% of voters earning under $30,000 a
year support this legislation.

70% of all voters surveyed use a cell phone. 50% of voters earning less than $30,000 a year are cell phone users.

Among voters who are cell phone users: 62% believe the early termination fees are too high.

Only 18% believe that early termination fees are just right
(while 20% are ‘not sure’ if these fees are too high, too low, or just
right).

Among cell phone users: 11% said they did not have a contract
requiring service for any length of time. 31% said they had a one year
contract; 50% said they had a two year contract; 1% said they had a
three year contract and 6% were not sure of the length of their
contract.

Even though 30% of California voters did not use cell phones, a
remarkably high 51% of all voters said regulating cell phone industry
billing and sales practices was a top priority or a very important
priority. This may be due to the fact that 34% of all voters reported
that in the past few years they or a member of their immediate family
had a problem with a cell phone bill that was not understandable or
that overcharged them.

73% support currently proposed legislation that would make a cell phone
company that advertises products in a language other than English give
the customer a written contract in the same language used to sell the
product.

The poll was conducted from March 28 through March 31, 2006.
The margin of error was 4.5%. Fingerhut Granados Opinion Research is a
nationally-known polling firm which has wide experience in polling
consumer-related issues in the state.