WASHINGTON-The bill-of-rights brawl in California took yet another turn last week, with Public Utilities Commission member Dian Grueneich offering a new telecom consumer-protection plan less onerous than the existing regime, but more regulatory than another proposal backed by CPUC President Michael Peevey.
Votes on the two proposals are not expected before March.
While Grueneich told reporters her measure was not aimed at the wireless industry, she clearly had mobile-phone carriers in mind in crafting her plan.
“In 2004 in California, the number of complaints related to wireless service skyrocketed by 63 percent, while overall wireless subscriber rates increased by 15 percent. Competition and innovation have provided important consumer protections, but more is needed,” said Grueneich. “It is imperative that we take action to ensure that consumers receive the information they need to make informed decisions about this essential service while creating rules that allow competition and innovation to flourish. This decision strikes the appropriate balance between the needs of consumers and supporting a competitive marketplace.”
Grueneich said her initiative has two-thirds fewer regulations than the bill of rights narrowly approved by the CPUC in May 2004, but suspended seven months later.
Grueneich was one of the commissioners who voted in January 2005 to temporarily shelve the bill of rights-which created scores of new regulations governing carrier disclosure, billing, marketing and service-to give commissioners time to re-examine the rule in view of the changed wireless industry landscape four years after the rule was first proposed. Grueneich later said many elements of the bill of rights could be reinstated.
Grueneich, a Democrat and one of three new commissioners appointed by Gov. Arnold Schwarzenegger, likely will have problems drumming up support for her plan.
Two other Schwarzenegger appointees-John Bohn and Rachelle Chong-are Republicans with past business ties. It is expected they will back the plan crafted by Peevey and former commissioner Susan Kennedy. Kennedy resigned her post to become Schwarzenneger’s chief of staff in January. It is unclear even whether Commissioner Geoffrey Brown-a Democrat whose bill of rights is now under attack-will support Grueneich if he decides she has compromised too many consumer protections in her campaign to head off the Kennedy-Peevey proposal.
A major flash point in attempts to overhaul the bill of rights is whether the CPUC should keep a provision that prohibits non-authorized charges on consumer bills.
The Kennedy-Peevey plan would repeal anti-cramming protections and otherwise obliterate the current bill of rights, replacing it with a consumer-education program and a fraud unit.
The Grueneich alternate, among other things, keeps intact anti-cramming safeguards and implements a 30-day return policy. Many mobile-phone carriers give consumers 15 days to return phones and back out of service contracts.
“The proposed [Kennedy-Peevey] decision’s repeal of the rules governing billing for non-communications-related charges removes unnecessary barriers to the introduction of innovative and convenient services that customers desire,” Verizon Wireless told the CPUC. “The proposed decision properly concludes that there is no evidence of a need to maintain prescriptive rules dictating how such billing options must be structured.”
While Verizon Wireless and other mobile-phone operators would prefer the Kennedy-Peevey plan over the current bill of rights and the Grueneich plan, the industry believes there should not be any additional state wireless regulations.
Consumer groups, disability advocates and California Attorney General Bill Locker argue the Kennedy-Peevey proposal is devoid of any new wireless consumer-protection rules. Indeed, they want the Brown-authored bill of rights reinstated.
“It cannot be lost on the commission that every consumer group and law enforcement organization participating in this proceeding strongly criticized the proposed [Kennedy-Peevey] decision and points to numerous errors of fact and law and incorrect policy decisions that make the proposed decision so flawed it must be rejected,” stated a coalition of consumer groups.
The industry has spent top dollar on California lobbyists and lawyers in hopes of upending the California bill of rights and thereby dissuading other states from following suit. That investment may yield a solid return this spring in the form of a new bill of rights that is far friendlier to mobile carriers than the existing rule.
The Democratic-led California legislature may respond by trying to resurrect legislation to write the existing bill of rights into law, but any such bill likely would be vetoed by Schwarzenegger, and it would be difficult to override that veto.
