Time for PUC to protect the public

by Richard Holober, CFC Executive Director, San Francisco Chronicle

As cell phones become more popular, consumer complaints have soared.
One means of mitigating those grievances: the California Public
Utilities Commission, which is supposed to protect the consumer. So
far, however, the commission has fiddled while phone users burn with
anger and frustration. Next month, the spotlight will be on the PUC as
it considers enacting modest rules to curb the worst cell-phone
industry practices.

Cell companies ranked first in 2002 and second in 2003 among all
industries in consumer complaints filed with the Better Business
Bureau. Deceptive sales pitches, billing errors and misleading answers
to billing inquiries topped the list of complaints tracked by the BBB.

A few years ago, the Public Utilities Commission tried to do right by
consumers. In 2000, the PUC began an exhaustive four-year hearing
process that culminated in adoption in 2004 of regulations dubbed the
Telecommunications Consumer Bill of Rights. One regulation gave
cell-phone customers 30 days to revoke new contracts without penalty or
exorbitant early-termination fees. Another required easy-to-understand
phone bills. Yet another ended the deceptive billing practice of
mislabeling phone-company fees as government-imposed taxes.

Large cell-phone companies were furious with the bill of rights,
fearing that California would pave the way in protecting Americans from
industry abuse. Cingular, Verizon, T-Mobile, Nextel, Sprint and the
other cell biggies fought back in Sacramento.

The PUC that enacted the Telecommunications Consumer Bill of Rights had
a narrow 3-to-2 pro-consumer majority. But because the governor
appoints the members of the PUC, within months, new appointments
transformed the PUC majority into an obedient industry lapdog. Just as
the new consumer rights were taking full effect, the new commission
majority voted to suspend those rights. Citing anecdotal complaints
from cell-phone companies, the PUC said it was necessary to scrap
consumer protections that had been adopted in a deliberative four-year
hearing process, and start again from scratch. And yes, both Govs. Gray
Davis and Arnold Schwarzenegger had appointed new commissioners who
gave consumers the shaft.

Last December, as she departed the PUC for greener pastures in the
Schwarzenegger administration, Commissioner Susan Kennedy unveiled a
new Telecommunications Consumer Bill of Rights. This proposal is now
sponsored by PUC President Mike Peevey.

It’s a hollow shell.

The Kennedy-Peevey proposal is all about protecting cell-phone
companies from consumers. It eliminates all the specific protections
that were spelled out in the 2004 regulations. It speaks in glorious
terms about the magic of the competitive marketplace. Competition, it
turns out, will inexorably lead multibillion-dollar cell-phone
companies to bend to the will of plain folks like you and me. The phone
oligopoly will have no choice but to give us ever better rights and
protections, simply to survive in a consumer-driven marketplace.

I’d sooner place my bets on the tooth fairy.

There is yet a glimmer of hope for phone users. Commissioner Dian
Grueneich, a Schwarzenegger appointee who voted with the majority to
shelve the carefully developed earlier bill of rights, has broken rank
— and is proposing an alternative to the Kennedy-Peevey regulations.

The Grueneich proposal falls short of the 2004 bill of rights, but it
does grant consumers some real relief from the worst phone company
abuses. Her alternative restores the right to revoke new phone service
for 30 days without penalty or early termination fees. It stops phone
companies from changing the terms of a contract without the customer’s
consent. And it adds an important new protection for non-English
speaking customers. It would require phone contracts to be written in
the same language the company uses to market the product — saving
vulnerable consumers from bait-and-switch tactics.

On March 2, the PUC will select one of these drastically dissimilar
approaches. The Consumer Federation of California encourages the PUC to
adopt the Grueneich proposal as an important — if insufficient — step
in putting consumer protection on a level playing field with corporate

Express your view

To make known your opinion of which Telecommunications Consumer Bill of
Rights you believe is best, contact the following individuals:

California Public Utilities Commission: President Michael Peevey’s
phone is (415) 703-3703; Commissioner Dian Grueneich’s phone is (415)
703-2444. To e-mail members of the PUC, go to www.cpuc.ca.gov, click on
"Commissioners" and click on each name and follow the prompts to
message each of them.

Gov. Arnold Schwarzenegger: E-mail him at governor@governor.ca. gov.

Your state legislator: To find out how to contact your individual
senator or Assembly member, log on to www.leginfo.ca.gov/yourleg.html
and type in your ZIP code.

Richard Holober is executive director of Consumer Federation of California, a nonprofit in San Mateo that advocates for consumer-rights protections.