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NEWS RELEASE
Jan 27, 2005


CONTACT: Harvey Rosenfield (310) 392-0522 ext. 303

Schwarzenegger Kills Consumer Protections Against Cell Phone Abuses

Acting at the behest of Governor Arnold Schwarzenegger, a state agency today withdrew the "Consumer Bill of Rights" it had approved last year to protect consumers against cell phone overcharges, unfair practices, poor connections and other abuses.

The decision came just weeks after Schwarzenegger replaced two pro-consumer members of the Public Utilities Commission. One of his new appointees, Dian Grueneich, cast the deciding vote today in favor of withdrawing the rules, which had generated enormous opposition from cell phone companies.

After lobbying by and campaign contributions from the cellular phone industry, Schwarzenegger tried to stop the rules from going into effect last year, utilizing the ludicrous argument that new consumer protections would "drive businesses out of California."

The Commission was already mired in charges of favoritism to the companies it is supposed to regulate; its role in establishing electricity deregulation and the $3 billion bailout of Southern California Edison left California with the highest electricity rates in the nation and sparked the voter revolt against Governor Davis. Just last week, the state's political watchdog agency ruled that a former commissioner illegally had invested in a telecommunications company regulated by the agency, and fined the commissioner.

With Schwarzenegger's latest appointments, the agency is now dominated by anti-consumer, pro deregulation advocates.

"This is a 'cell out' performance by Gov. Schwarzenegger, who has struck a blow against California consumers on behalf of the cell phone companies," said Harvey Rosenfield of the Foundation for Taxpayer and Consumer Rights. "Today's decision will lead to more cell phone abuses, including overcharges, undisclosed fees, misleading advertising, billing mistakes, dropped connections and abuses by cell phone companies. Now consumers' only option when they are ripped of by a cell phone company will be to go to court to stop these abuses."

Schwarzenegger has received hundreds of thousands of dollars from telecommunications firms including $136,200 from SBC and affiliates and $92,400 from AT&T.

"Californians can't afford Schwarzenegger's deregulation policies. What we really need is an elected Public Utilities Commission," Rosenfield concluded.

The Cell Phone Bill of Rights, which took effect last year, included the following protections:
- The right to cancel a contract with a cell phone provider within 30 days without penalty;
- Rules requiring bills that are easier to read and understand;
- Protections against misleading advertising and marketing;
- Rules making it easier for consumers to complain to the CPUC and companies regarding problems with their service.

FTCR has sued several cell phone companies for illegal consumer practices. More information on these suits can be found at: http://www.consumerwatchdog.org

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