Consumer Federation of California

SB
831 (Lowenthal) would establish a minimum standard of consumer
protections for cell phone subscribers ‘ including allowing 10 days
after receiving the first bill to cancel contracts without exorbitant
penalties

(Sacramento, CA) Cell phone users are one step closer to winning
critical consumer protections after today’s vote by the Senate Energy,
Utilities and Communications Committee to approve Senate Bill 831 (D-
Lowenthal). The bill would establish a minimum standard of consumer
protections for cell phone subscribers that has been sorely lacking
since the revoke of the ‘Telecommunications Consumer Bill of Rights’ by
the California Public Utilities Commission (PUC) in 2005.

The vote in
the Committee was 5 Aye and 3 Nay.
"The cell phone industry ranks number one among all industries in
consumer complaints filed with the Better Business Bureau,’ said
Richard Holober, Executive Director of the Consumer Federation of
California, which is the sponsor of SB 831. ‘Consumers have put up with
deceptive contract terms, poor phone reception, excessive early
termination fees and inadequate customer service for long enough.’

SB 831 provisions include: allowing customers 30 days to cancel cell
phone contract without early termination fees (or 10 days after
receiving the first bill); phasing out termination fees on a month to
month basis; requiring clear notification of subscribers’ rights when
unauthorized charges are made to their phone; prohibiting third party
retailers from charging additional early termination fees; and allowing
subscribers to cancel contracts without paying early termination fees
when a phone company unilaterally raises rates during the life of a
contract.

Supporters of the legislation cite the fact that cellular phone
industry competition is decreasing. Just three years ago, consumers
could choose among six major cell phone companies. Today, four cell
companies control 80% of the US market. Industry consolidation is
directly tied to increasing complaints, according to Consumers Reports
magazine.

The PUC, responsible for protecting cell phone consumers,
recently revoked the ‘Telecommunications Consumers Bill of Rights’ ‘
regulations it had adopted in 2004 to restrain some of the industry’s
worst practices. Despite consistently high levels of consumer
complaints, the current PUC has clearly stated that it opposes
regulation of the cell phone industry. Thus, the only venue available
for phone users to address these problems is the California
legislature.

‘Cell phone companies are merging, competition is decreasing, customer
service is deteriorating, and yet California cell phone subscribers
have little or no protection against industry abuses,’ said State
Senator Alan Lowenthal (D- Long Beach). "SB 831 would establish a
minimum standard of protections that every cell phone subscriber needs
and deserves.’

The next stop for SB 831 is the Senate Appropriations Committee. Bill
supporters include: Consumer Federation of California (Sponsor), AARP,
TURN (The Utility Reform Network), California Labor Federation,
AFL-CIO, Communications Workers of America District 9, Latino Issues
Forum, CALPIRG, and the California Alliance for Retired Americans.
(Partial list)
The Consumer Federation of California is a non-profit organization,
established in 1960, that advocates for consumer protection laws and
regulations.