Phone Users’ New ‘Bill of Rights’ Lacks Enforcement

California regulators on Thursday approved a so-called bill of rights for telephone customers but backed away from putting teeth into the safeguards -- a combination derided as “an inducement to massive, pervasive and unaccountable fraud.”

The 3-2 vote by the state Public Utilities Commission in effect ends the agency’s six-year effort to bolster consumer protections against confusing billing and deceptive marketing.

In 2004, the PUC passed a far stricter version that carriers complained micromanaged their business. Those rules were tossed out last year, after the makeup of the commission changed to include a majority more sympathetic to the concerns of telecom firms.

As passed, the bill of rights simply states the PUC’s intent and provides no right to sue because of a carrier’s violation of the principles.

Commission President Michael Peevey, who oversaw the version passed Thursday, said that tougher rules were overly burdensome because competition in California was so fierce that no company could afford to treat its customers poorly.

“These basic principles will stand the test of time even as the telecommunications market continues to evolve from a highly regulated, monopoly-provided system to a much more open, competitive system,” Peevey said.

Recent Republican appointees Rachelle Chong and John Bohn also echoed the belief that competition in the market would stem most abuses, and that the commission could handle the rest under existing laws.

“This is a pro-consumer action, despite today’s sound and fury,” Chong said. “This order lets carriers know what is expected of them.”

The commission’s action also provided for new consumer education efforts and stepped-up enforcement of existing rules and laws.

For their part, telecommunications companies and other business groups praised the rules for setting a high bar without interfering with the market.

“The commission’s vote goes a long way toward addressing the concerns of industry of overly proscriptive rules in prior versions that would have had the perverse impact of harming consumers by reducing competition and innovation and leading to higher prices,” said Sprint Nextel Corp. spokesman Travis Sowders.

But Commissioner Geoffrey F. Brown lambasted the decision as “a deception, designed to give political cover to an attack on consumer interests,” and “an inducement to massive, pervasive and unaccountable fraud.” It tells the public, Brown said, that “you’re on your own. Its message to the cellphone industry is: You’re in charge.”

The Utility Reform Network, a consumer advocacy group, called the decision a “shocking reversal” of the 2004 bill of rights.

State Sen. Debra Bowen (D-Marina del Rey) called it “a bill of rights for the phone companies, not for the millions of California phone users who are tired of being ripped off.”

She pointed to a provision on “cramming,” the practice of putting unauthorized charges onto phone bills. Thursday’s vote shifted the burden of erasing an improper charge to the consumer instead of the phone company, Bowen said.

“You can’t flip the burden of proof from the companies to the customers and call it ‘consumer protection’ with a straight face,” Bowen said. “This notion that because the phone market is competitive means the state doesn’t need any rules to protect phone customers is just ridiculous.”

The latest incarnation was sponsored by Peevey and former PUC member Susan P. Kennedy, who engineered the order before leaving in December to become Gov. Arnold Schwarzenegger’s chief of staff.

Peevey said Kennedy “lived up to what she said she would do” by revising the bill of rights and, in the governor’s office, getting more than two dozen positions added to the agency to handle complaints and enforcement.

Kennedy had been opposed to any consumer bill of rights, contending that enough laws existed to protect consumers and that mandates would create unnecessary costs that would be passed on to customers.