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California Suspends Wireless Bill of Rights

January 28, 2005
Despite the objections of California's attorney general and all of the state's 58 district attorneys, the California Public Utilities Commission (CPUC) yesterday suspended the Telecommunications Consumer Bill of Rights, enacted less than a year ago in the face of widespread consumer complaints.

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The CPUC's 3-1 decision to suspend the reforms follows the term expirations of commissioners Loretta Lynch and Carl Wood, who were vocal advocates of the measure during the four years of debate leading to its adoption.

The charge to suspend the bill was led by CPUC board member Susan Kennedy, who argued that the regulations imposed too many unreasonable burdens and restrictions on a wireless industry that is vital to the state's economy. CPUC President Michael Peevey and Dian Grueneich, newly appointed by Gov. Arnold Schwarzenegger, sided with Kennedy.

That left only CPUC member Geoffrey Brown, who drafted the consumer protection rules approved last May, voting against the suspension. Kennedy promised to introduce a revised wireless consumer bill by the end of 2005.

"We have all heard unending complaints from cell carriers about the anti-business climate that these rules create," Brown said. "The governor, who has only heard about the rules from those who hate them, believes this."

"Only a studied ignorance, coupled with a drumbeat recitation that 'competition solves everything,' can deny the reality of a confusing, deceitful and fraudulent marketplace," Brown said added. "Our own consumer affairs branch, our legislature, consumer advocates, and public opinion polls demonstrate compellingly that the public feels it is being mistreated. Yet these concerns are dismissed as radical consumerism or anecdotal evidence."

When it was enacted last year, the Telecommunications Consumer Bill of Rights was widely viewed as the toughest set of statewide wireless phone regulations in the U.S. Its creation was prompted by consumer complaints alleging false advertising and confusing billing practices, which the bill attempted to combat with a provision granting dissatisfied subscribers the right to cancel their contracts without penalty within the first 30 days of service.

The regulations also mandated clearer explanations of all rates, taxes and fees; listing contract terms in easy-to-read 10-point type; and more assistance for non-English speaking customers.

Consumer Outrage

Consumer advocacy groups were quick to denounce the action.

"This is vigilante style regulation," said Bob Finkelstein, executive director of The Utility Reform Network. "There is no legal or procedural reason for today's action, only a political one."

"We're very disappointed, but not surprised" at the CPUC ruling, said Janee Briesemeister, senior policy analyst at Consumer Union's Southwest office.

“Today’s reversal of the California PUC’s landmark decision to enact a mandatory bill of rights for wireless consumers is a stunning blow to consumers not just in California, but nationwide,” said TRAC Research Associate John Breyault. “This decision represents a victory for industry lobbyists over the best interests of telecommunications consumers.”

The CPUC's decision also generated objections from state Attorney General Bill Lockyer and all 58 of California's district attorneys, who claim that wireless-based consumer complaints are diverting their time and energy from other law enforcement issues.

Industry Boilerplate

Wireless carriers celebrated the action.

""Nothing is more valuable to T-Mobile than our relationship with our customers -- customer satisfaction is our highest priority," Tom Sugrue, vice president of government affairs at T-Mobile USA, said. "Because the California rules would have unnecessarily interfered with our customer relationships, this stay advances the public interest."

"Wireless consumers in California have reason to celebrate today," said Steve Largent, president of the Cellular Telecommications Industry Association (CTIA). "The rules would have set California on a path toward higher prices, fewer choices and less information for consumers."

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