Consumer Federation of California

TELECOMMUNICATIONS CONSUMER BILL OF RIGHTS

Q&A Sheet

by the Consumer Federation of California

Q-1. What is the Telecommunications Consumer Bill of Rights?

A. In May of 2004, after a four process that began in response to
consumer complaints and concerns about bad phone service, the
California Public Utilities Commission issued a series of regulations
designed to protect telephone customers. The CPUC researched telephone
complaint issues and heard testimony from users, consumer groups and
the telecommunications industry. Cellular phone service proved to be
the most problematic sector. These regulations are known as the
Telecommunications Consumer Bill of Rights. The Bill of Rights became
effective near the end of 2004. However, in response to numerous
industry complaints, in January 2005, the PUC voted to suspend the
consumer rights that it had recently adopted.

Q-2. What are the provisions of the 2004 Bill Of Rights?

A. The Bill is a lengthy and complex document. But here are the primary protections in the Bill for cellular customers:

‘ Safeguards personal information in cell phone customers’ records.

‘ Allows new customers to rescind the cell phone contract during the
first 30 days (the current industry standard is 14 days). This allows
consumers to get out from under disappointing service without paying
hefty termination penalties that are part of typical one- and two-year
cell phone contracts.

‘ Requires all materials included with phone bill mailings to be in clear type that is large enough to read.

‘ Requires that government-imposed fees be separated from service
provider-generated fees appearing on cell phone bills. This allows
consumers to determine if cellular service providers are adding
arbitrary and unfair fees to their contractual rates.

‘ Prevents service providers from changing the terms of ongoing contracts before they expire.

Q-3. So what’s the problem?

A. The Governor appoints the members of the Public Utilities Commission
for five year terms. After the Consumer Bill of Rights went into
effect, the composition of the PUC changed. The Commission that had
adopted the Bill of Rights in 2004 had a pro-consumer majority. The PUC
that suspended these rights in 2005 had a pro-industry majority. In
December 2005, Commissioner Susan Kennedy, who subsequently left to
become Governor Schwarzenegger’s chief of staff – proposed a ‘revised’
set of regulations (called a Proposed Decision), cosponsored by current
member Michael Peevey, that essentially guts the most important
provisions of the Bill of Rights. Kennedy’s proposalis a huge
concession to the cell phone industry. It eliminates all of the
specific rights listed above and merely provides a list of theoretical
rights that contain no substance and that place no specific
requirements on the industry, The Kennedy-Peevey Proposal would
establish a new consumer education project. This education project
assumes that if consumers were more careful in selecting phone services
and in deciphering phone bills, telecomm giants would have no choice
but to treat them better. The consumer education project is not funded
and it places the entire burden on consumers. The Kennedy-Peevey
Proposed Decision seems to be intended to protect the
telecommunications industry from consumers.

Q-4. What’s next?

A. CPUC Commissioner Dian Grueneich has proposed a new set
of regulations that, while not fully restoring the protections of the
2004 Bill of Rights, is much more friendly to consumers’ rights than is
the Kennedy-Peevey. Her proposal re-establishes the 30 day right to
rescind new telephone service without the imposition of early
termination fees, and it adds an important new requirement that
contracts be written in the same language that was used to promote the
product or service. This would protect non-English speaking consumers
from signing contracts that they can’t read that are non consistent
with the advertised deal.

Q-5. Which groups oppose the Kennedy-Peevey proposal?

A. Consumer and community based organizations that oppose the
Kennedy-Peevey proposal include the Consumer Federation of California,
The Utility Reform Network (TURN), Consumers Union, AARP, California
Public Interest Research Group (CALPIRG) the National Consumer Law
Center and Disability Rights Advocates as well as other groups
representing minorities, seniors, and immigrant communities.

Q-6. What is the Coalition’s position on the status of the Bill of Rights?

A. Coalition members are of one mind on this issue. The
original Bill of Rights was not ideal, but it represented a reasonable
compromise between the interests of consumers and those of the
telecommunications industry. We believe those interests are not
necessarily mutually exclusive. The original Bill was reasonable. The
Kennedy-Peevey regulations appease the telecommunications industry and
demolish the 2004 Bill of Rights. The Grueneich proposal is not ideal,
but it’s a long distance ahead of the Kennedy-Peevey plan.

Q-7. What can consumers do to advance their own cause?

A. Consumers can let the CPUC know they support the 2004
Telecommunications Consumer Bill of Rights. The CPU can be reached at
800.649.7570 or https://www.cpuc.ca.gov/static/contactus/index.htm.
Consumers can also contact the Governor’s office and their State
Assembly members and State Senators.