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RCR Wireless News
May 30, 2005

by JEFFREY SILVA

Calif. Senate OKs bill of rights for telecom

WASHINGTON DC -- The California Senate last week approved legislation creating a bill of rights for telecom consumers, a measure modeled after one-year-old state guidelines that are now in jeopardy as a revamped Public Utilities Commission considers less regulatory consumer protection rules.

"Despite its poor track record, the cellular telephone industry continues to believe that minimum customer service standards are not needed," said Sen. Martha Escutia (D), the lead sponsor of the legislation and chairwoman of the Senate Energy, Utilities and Communications Committee. "It's a shame that the industry is keeping its head in the sand and refusing to negotiate on the bill."

A key Democratic backer of the bill had especially strong words for industry and a California PUC with marching orders from GOP Gov. Arnold Schwarzenegger.

"The PUC worked for four years to put together a set of rules to provide telephone customers with a basic set of common sense protections and rights. As soon as the architects of rules left office, the giant telephone companies ratcheted up their complaints and the new industry-friendly PUC threw the rules out the window. Since the PUC clearly isn't interested in doing its job to protect telephone customers, those of us who think people have a right not to be ripped off decided to step in to try and fill the void," said Sen. Debra Bowen (D).

Even if the Democratic-controlled state legislature passes the bill of rights, Schwarzenegger is likely to veto the legislation. Schwarzenegger and the mobile-phone industry oppose new consumer protection rules governing wireless and wireline telecom billing, marketing and service contracts, arguing they are expensive, burdensome and counterproductive.

Supporters of the Senate bill say it would be difficult to override a veto by Schwarzenegger, despite his drop in popularity in the state.

The California legislation forbids telecom carriers from making deceptive or misleading statements about rates and services, and requires them to provide customers with written confirmation of every order for service as well as a written copy of each contract. The measure allows customers to cancel new service within 30 days without termination fees or penalties.

In addition, the bill calls on telecom carriers to provide customer contracts and make required disclosures in the language used to advertise the product or service upon the customer's request. The legislation requires bills to be clearly organized and contain only charges that have been authorized by the customer. Under the measure, only government-imposed fees and taxes can be identified as government fees and taxes.

The mobile-phone industry has asked the Federal Communications Commission to declare that state laws and regulations pertaining to early termination fees are pre-empted by federal law.

On a parallel track, California PUC Commissioner Susan Kennedy is heading up an effort to get agency approval of a scaled-backed telecom consumer bill of rights by the end of the year. Kennedy appears to have the votes to do it.

Two Democratic commissioners (Carl Wood and Loretta Lynch) in the majority that passed the bill of rights last May left the CPUC at the end of 2004 when their terms expired.

In December, Schwarzenegger appointed Republican Steve Poizner and Democrat Dian Grueneich to fill the two vacancies. After conflict-of-interest complications forced SnapTrack Inc. founder Poizner to withdraw his name from consideration for the post, Schwarzenegger appointed GOP loyalist John Bohn for the CPUC seat. Kennedy is expected to pick up votes from CPUC President Michael Peevey and Bohn to roll back the bill of rights.

The mobile-phone industry, which has spent hundreds of thousands of dollars to keep the bill of rights from taking hold in California and copied by other states, has also had to defend billing practices in court.

Last week, Nextel Communications Inc. scored a big victory.

The Los Angeles Superior Court threw out a billing suit against Nextel Communications Inc. after the carrier convinced the judge that a November ballot measure to curb frivolous lawsuits effectively barred a consumer group from pursuing the litigation.

The Foundation for Taxpayer and Consumer Rights sued Nextel in 2003 for assessing a $2.50 monthly fee in order for customers to receive an itemized bill. The lawsuit demanded that Nextel stop charging people for the fully itemized bill and for spam text messages, and to make refunds.

Last fall, California voters approved Proposition 64, a measure backed by businesses to reduce the filing of suits for the sole purpose of extracting a monetary settlement. One provision requires lawsuits be brought by alleged victims. FTCR's action against Nextel did not do that. But the group says the next lawsuit will.

"Nextel's corporate lawyers used Proposition 64 to avoid accountability to angry customers for its unfair billing practices,'' said Harvey Rosenfield, one of the lawyers representing FTCR. "Consumers across the country are fed up with Nextel's billing tricks and other abuses. FTCR will fight to give these consumers their day in court.''

FTCR said the California Supreme Court has agreed to decide whether Proposition 64 applies to lawsuits, such as the Nextel suit, filed before the measure was approved.


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