Appendix A to Supplemental Report of the 2006 Budget Act: Response to Item 8660-001-0462; Progress Implementing the Telecommunications Bill of Rights Decision: The Consumer Protection Initiative (D0603013)
Transmittal Letter to Supplemental Report of the 2006 Budget Act: Response to Item 8660-001-0462; Progress Implementing the Telecommunications Bill of Rights Decision: The Consumer Protection Initiative (D0603013)
Appendix B to Supplemental Report of the 2006 Budget Act: Response to Item 8660-001-0462; Progress Implementing the Telecommunications Bill of Rights Decision: The Consumer Protection Initiative (D0603013)
Appendix C to Supplemental Report of the 2006 Budget Act: Response to Item 8660-001-0462; Progress Implementing the Telecommunications Bill of Rights Decision: The Consumer Protection Initiative (D0603013)
Appendix D to Supplemental Report of the 2006 Budget Act: Response to Item 8660-001-0462; Progress Implementing the Telecommunications Bill of Rights Decision: The Consumer Protection Initiative (D0603013)
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Supplemental Report of the 2006 Budget Act:

Response to Item 8660-001-0462

Progress Implementing the

Telecommunications Bill of Rights Decision:

The Consumer Protection Initiative

January 2008

Table of Contents

Executive Summary 1

The Reporting Requirement 2

A. Consumer Information Management System (CIMS) 2

B. Consumer Complaint System Performance 3

C. Consumer Education Activities 7

D. Prosecutions 10

E. Community Outreach 11

Appendix A: Consumer Information Management System (CIMS) Project Charter.

Appendix B: Consumer Information Management System (CIMS) Project Funding Plan.

Appendix C: CPUC Consumer Education Initiative Campaign: Slide Show Presentation to the Consumer Affairs Committee of the National Association of Regulatory Commissioners by Commissioner Rachelle Chong, November 11, 2007.

Appendix D: Community Based Organization Outreach, Education, and Complaint Resolution Program: CPUC Resolution CSID-2, December 6, 2007.

Executive Summary

In March 2006, the California Public Utilities Commission (PUC) launched twenty-three initiatives to "empower and protect consumers in the modern telecommunications marketplace," known as the Consumer Protection Initiative, or CPI .1 The CPI was created to improve consumer education, complaint resolution, and law enforcement in the face of numerous telecommunications technological advances; the convergence of voice, data, and video; and increasing competition in the telecommunications marketplace.

Pursuant to requirements of the 2006 Budget Act, this report provides information on the progress that the PUC has made implementing the CPI decision. This report describes steps taken and associated expenditures made to implement these initiatives, and covers five subject areas: the Consumer Information Management System, the consumer complaint system, consumer education activities, outreach efforts, and prosecutions undertaken with the State Attorney General's office.

 

The PUC's new Consumer Information Management System (CIMS) will improve the Commission's ability to respond to consumer inquiries and complaints while upgrading the PUC's data gathering and analysis capabilities. CIMS is in the final stages of software development, hardware procurement, and process reengineering, and is scheduled for deployment this summer.

 

Through new funding approved by the Legislature, the PUC has hired and trained additional consumer affairs representatives to handle consumer complaints. Before the CPI decision there were approximately thirty representatives handling complaints. With the staffing level now up to forty-eight, the Consumer Affairs Branch (CAB) has significantly improved its complaint handling and responsiveness to consumer inquiries, even against the backdrop of increased call volume.

 

The CPI has several consumer education programs and activities, including a new CalPhoneInfo website, eight consumer education brochures in thirteen languages, and a coordinated multilingual media outreach campaign. Additionally, the CPI established new programs to involve community-based organizations and newly-hired outreach officers to provide education and assistance to the State's diverse population and its small-business segments. Program evaluations by the media and outreach contractors should be available by February, and an independent evaluation of the broader education program should be available this summer.

The PUC's Consumer Protection and Safety Division (CPSD) has established the new Telecommunication Fraud Unit and has expanded its cooperation and coordination with the State Attorney General (AG) on prosecution of telecommunications scams. Working with the AG, CPSD has successfully prosecuted a major prepaid calling card scam, laying the groundwork for other investigations and prosecutions currently underway.

The Reporting Requirement

The 2006 Budget Act requires that the PUC report to the Legislature on the progress it has made in implementing the Telecommunications Bill of Rights Decision, otherwise known as the Consumer Protection Initiative (CPI; Decision 06-03-013).2 The legislature asks the PUC to report on the following:

This report is organized by the five topics identified above as "a" through "e."

A. Consumer Information Management System (CIMS)

The upgrade of the Consumer Information Management System, including the final project costs, the date of project implementation, and information on the increased operability of the upgraded system.

The Communications Division is currently working with the PUC's Consumer Service and Information Division (CSID), the Division of Ratepayer Advocates (DRA), and the Consumer Protection and Safety Division (CPSD) on development and installation of the new Consumer Information Management System (CIMS).

The vast majority of complaints received by the Commission involve communications services. Recognizing the need to enhance consumer protection in a rapidly changing utility environment, the PUC adopted D.06-03-013, the Consumer Protection Initiative, in 2006. Among other things, the CPI included procurement of new software and hardware to assist Commission staff in processing complaints and inquiries. The PUC issued a Request for Proposals in mid-2007. The estimated total cost for CIMS is $3.9 million. The design, testing, and acceptance phases of the project are being managed on a day-to-day basis by Bluecrane, a professional project management consultant with experience in such large system development. In October 2007, the software contract was awarded to BIS Computer Solutions, Inc., of La Crescenta, California. The CIMS Project Charter is included as Appendix A to this report.

CIMS will improve the Commission's ability to respond to inquiries, to resolve complaints, and to enhance enforcement efforts, and will significantly upgrade data gathering and analysis capabilities throughout the PUC. New management capabilities will include improved case tracking and resolution, more finely tuned categorization of inquiries and complaints, more efficient internal case assignment, and more robust data for use in complaint appeals and enforcement efforts.

At this writing, the design phase is concluding. Software code development will occur over the first quarter of 2008, followed by testing, verification, and training in the second quarter. CIMS is expected to come online in the Consumer Affairs Branch (CAB) in July. CIMS installation will occur in conjunction with implementation of a new procedures manual for CAB and the integration of an upgraded Interactive Voice Response (IVR) telephone system.

While the procurement stage for the software took longer than expected, the overall project is on-time and on-budget, one-third of the way into its deployment schedule. The following table lists the final project costs.

Table 1

CIMS Project Costs

 

Costs To-Date

Projected Costs

Total Costs

One-time costs

$2,311,097

$1,488,350

$3,799,447

Continuing costs

$3819

$172,100

$175,919

Total project costs

$2,314,916

$1,660,450

$3,975,366

Cost details are presented in the Project Funding Plan, included as Appendix B to this report.

B. Consumer Complaint System Performance

For the fiscal years of 2004-05, 2005-06, 2006-07, and 2007-08, information on the consumer complaint system, including average time taken to resolve a consumer complaint, the number of outstanding complaints, and PUC's progress in reducing the number of outstanding complaints.

Complaint Handling

The PUC provides assistance to consumers both over the phone and in writing through its Consumer Affairs Branch (CAB). CAB assists consumers by answering inquiries and resolving informal complaints about utility bills and services. Currently, informal complaints must be submitted in writing. Urgent matters such as potential disconnections may be made by phone and are treated as the highest priority. In Fiscal Year 2006/07 CAB fielded a total of approximately 109,000 inquiries and informal complaints and was able to assist consumers in obtaining approximately $20 million in refunds. Approximately half of these inquiries and complaints were telecommunications industry complaints.

CAB representatives spend an average of approximately five minutes handling each telephone call to the complaint-line 800 number. Call handling time is determined by a number of factors. Consumers who have questions and complaints often call CAB when they are unable to resolve problems with their utility provider. CAB representatives must elicit complex billing/service information from often-frustrated consumers, distill the information for processing, reference applicable regulatory requirements, and frequently must connect with a utility representative for a three-way problem-solving phone conference.

Thanks to the Legislature's approval of CAB staff and program augmentation, the PUC was able to increase its CAB staffing to historically high levels. New staffing enabled the opening of a Sacramento CAB office as well as new initiatives aimed at improving customer service. Staffing levels have increased to forty-eight Consumer Service Representatives, ten Consumer Service Supervisors, and three Consumer Service Managers.

Table 2

Consumer Affairs Branch Staffing Levels

Fiscal Year

Managers

Supervisors

Representatives

2004 / 2005

1

6

31

2005 / 2006

1

6

27

2006 / 2007

2

8

39

2007 / 2008*

3

10

48

* FY 2007-2008 statistics are reported for the partial year ending December 31, 2007.

In addition to the increased staffing levels, the necessary resources have been committed to a multi-prong approach to improving operations. The results have been positive for year-end 2007 despite new commitments such as the handling of LifeLine service eligibility appeals.3 The PUC expects that 2008 will see further improvements in CAB and in its ability to provide customer service in the rapidly changing telecommunications industry and other utility industries.

At the end of 2007, CAB has shown measurable improvement in all areas. Currently, there are approximately 10,000 open informal complaints including California Universal LifeLine Telephone Service (LifeLine) eligibility appeals. This number falls within the reasonable expected range of open complaints given the very large number of additional LifeLine complaints and appeals that CAB processed in FY 2006/07.

Table 3

Summary of Consumer Complaints to the CPUC

Fiscal Year

2004-05

2005-06

2006-07

2007-08*

         

Telephone Complaint Cases

17,868

15,536

29,357

15,274

Written Complaint Cases Filed

27,752

24,806

23,945

14,089

Written Complaints Resolved

18,085

33,872

29,565

18,301

Cases outstanding (at end of FY)

25,733

16,604

10,976

10,039

Backlog (over 90 days from date written complaint filed)

21,441

14,515

2,648

5,350

         

Average Time Written Complaints Open (Days)

299

376

85

122

*FY 2007-08 statistics reported for partial year ending December 31, 2007.

Another prime metric for CAB performance is the speed with which consumer calls to CAB's complaint-line 800 number are answered. Over the past year CAB has been able to decrease the average time to connect with a CAB representative from approximately five minutes to ninety seconds. This improvement was enabled by the Legislature's approval of staff and program augmentation, as well as by CAB's structural and operational upgrades focused on customer service. Moreover, CAB has begun using a new metric that is more sensitive and more commonly used to track such performance, and will use it to track further progress. That metric shows that CAB representatives are currently able to answer approximately 80 percent of incoming calls within forty-five seconds.4

New Initiatives

In 2007 CAB launched and continued a number of initiatives aimed at increasing the efficiency of answering inquiries, resolving informal complaints, and educating consumers. The initiatives include:

_ A new customer relations database - the Consumer Information Management System (see above) that will move CAB toward a paperless environment. The expected "go-live" date is 3Q 2008.

_ A business processes reengineering effort culminating in creation of clear written processes and methods, and reference material in the form of the "CAB Procedures Manual," with an expected completion of 3Q 2008. This effort is among the first at the PUC to fully document major business processes.

_ Creation of the Customer Service Academy - a training program for all CAB personnel on how to interact with consumers to resolve complaints more efficiently. The Academy training was completed in 4Q 2007, with fifty-nine Consumer Affairs Managers, Consumer Affairs Supervisors, and Consumer Affairs Representatives completing 160 hours per person in customer relations management training.

_ Creation and staffing of the CAB office in Sacramento dedicated to resolution of Universal LifeLine Telephone Service (LifeLine) certification and billing issues. This office was established and online in 4Q 2007 utilizing dedicated staff to administer the Commission's responsibilities to verify and certify approximately 3.5 million Lifeline program recipients.

_ An upgraded telephone system that will allow a greater integration of activities in CAB offices in San Francisco, Los Angeles, and Sacramento, and allow for institution of a planned quality assurance/training unit. Expected go-live date for the updated system is the end of 2Q 2008.

_ A consistent effort with major communications and energy utilities to increase electronic communications, thus reducing processing time and eliminating duplicative work for CAB in processing informal complaints.

These initiatives are long term investments made possible by the Legislature. In the short term the PUC has carefully measured the improvement in CAB customer service in a number of ways. CAB has significantly improved customer service based on industry standards, including "live speed of answer." By the end of 2007 CAB began to experience an increase in case closures (both current and backlog) as a result of paper flow improvement processes established with regulated utilities.

C. Consumer Education Activities

A summary of all consumer education activities undertaken by PUC under the decision and the findings of any evaluations of the consumer education program performed by PUC or on its behalf

Education Activities

In the Telecommunications Consumer Bill of Rights proceeding the Commission concluded that the best way to improve California consumers' telecommunications service experience was to establish a Consumer Protection Initiative (CPI). In March 2006 the Commission directed CSID to create a Consumer Education Initiative (CEI). While waiting for funding, CSID created an initial education program using available resources and including assistance from telecommunications carriers and consumer groups. This section summarizes the initial program and describes the events through December 2007 in the ongoing education program.

Appendix C to this report presents a slide show overview of the CEI that PUC Commissioner Rachelle Chong presented to the Consumer Affairs Committee of the National Association of Regulatory Commissioners on November 11, 2007.

The initial program. The program was launched on June 29, 2006, three months after the decision was issued. The program included consumer education brochures and a new website (more details are provided below), a media campaign, and several outreach efforts. To launch the CEI, the PUC, the carriers, and consumer groups joined in a media blitz to educate consumers about the resources available to them. All of the telecommunications carriers sent a bill insert message or a text message advising their consumers that they could contact the PUC for information and assistance, and consumer groups continued their efforts to educate consumers about telecommunications issues.

The initial brochures. Four brochures were printed in English, Spanish, and Chinese and were circulated to libraries, community centers, local, state and federal government offices, and Community Based Organizations (CBOs), and were used by our outreach staff, the utilities, and the consumer groups. The following brochures were circulated:

The website. The CalPhoneInfo.com website features a "tip of the day," presents the four brochures in the three languages, and presents additional text copies of translations of the brochures in Tagalog, Korean, Thai, Khmer, Hmong, Arabic, Armenian, Russian, Farsi and Vietnamese. In all, the information contained in the brochures is available in thirteen languages. The website also had "hot issues," links to other useful resources, FAQs, other advisories, the fraud hotline number, and an online complaint form. A large font feature and audio files of the text of the four brochures in English and Spanish were created and posted to the site to assist people who are vision impaired. The site is updated periodically.

The ongoing education program. The ongoing program has expanded the informational materials, the website, and continuing education through additional mass media, and has expanded the information and assistance available for small businesses.

Evaluations

The purpose of the Telecommunications Consumer Education Program (TCEP) as the major element of the CPI is to inform consumers sufficiently so they can make educated choices about their own communications needs and resources in California's dynamic, ever-changing communications marketplace. The goal is to have consumers understand how they can resolve communications service problems and avoid being victimized by fraud. The theoretical underpinning of the education program is the proposition that competitive markets function best to the extent that consumers have accurate and timely information.

To assess the practical impact of the Commission's education efforts, an evaluation contract has been awarded to the Evaluation and Training Institute (ETI) of Los Angeles, California, with funding of $230,000. ETI is currently completing the design for its research program to assess the impact and value of the PUC's Consumer Education Program. To assist in completing its research design, ETI will conduct collaborative forums and inter-active interviews. The evaluation will assess the impact of the media and outreach programs, as well as the other educational activities taken immediately after the CPI was adopted (described earlier in this report). ETI will also examine complaint data and will contact individual consumers about their complaint experiences with the Commission as those experiences relate to the Consumer Education Program.

ETI has scheduled the phases of its work as follows: (1) completion of the research program design in early February, (2) conducting surveys and analyzing already-existing data in February, March, and April, (3) final data-analysis in May, and (4) producing and delivering the final report to the Commission in June 2008.

D. Prosecutions

Information on all prosecutions undertaken in cooperation with the Attorney General or local district attorneys under the decision.

Prosecutions and coordinated efforts undertaken by the PUC in cooperation with the California Attorney General include the following:

E. Community Outreach

Information on all community outreach activities and expenditures pursuant to the decision.

Activities

Since the Consumer Education Initiative (CEI) Decision, the PUC has hired three more outreach officers to assist in educating and providing services to California's diverse communities. In addition we have been partnering with Community-Based Organizations (CBOs) and consumer advocacy groups to hold information fairs, have contracted for outreach and education through the media and with CBOs, and have begun preparations to provide more education, outreach and complaint resolution assistance to Limited-English Proficient consumers, as noted in Section C above.

Expenditures

Expenditures through December 2007 for the CPI media and community outreach activities are as follows:

Table 4

Outreach Expenditures

 

FY 2006-07

FY 2007-08

Total

OneWorld Communications

$618,948

 

$618,948

Richard Heath & Associates

$941,725

$282,518

$1,224,243

OneWorld Communications

$9,999

 

$9,999

Media Solutions

$3,500,000

 

$3,500,000

Total

$5,070,672

$282,518

$5,353,190

Additional miscellaneous costs include approximately $100,000 for facilities, supplies and advertising at the bill information fairs.

******

Appendix A

Consumer Information Management System (CIMS)

Project Charter

Appendix B

Consumer Information Management System (CIMS)

Project Funding Plan

Appendix C

CPUC Consumer Education Initiative Campaign

Slide Show Presentation to the Consumer Affairs Committee

National Association of Regulatory Commissioners

Commissioner Rachelle Chong

November 11, 2007

Appendix D

Community Based Organization

Outreach, Education, and Complaint Resolution Program:

CPUC Resolution CSID-2

December 6, 2007

1 Decision (D.) 06-03-013, Decision Issuing Revised General Order 168, Market Rules to Empower Telecommunications Consumers and to Prevent Fraud, March 2, 2006.

2 "In order to evaluate the progress of the Public Utilities Commission (PUC) in implementing the Telecommunications Consumer Bill of Rights decision, [the] PUC shall report to the appropriate fiscal and policy committees of the Legislature on or before January 10, 2008....," Item 8660-001-0462, Supplemental Report of the 2006 Budget Act, p. 42.

3 See General Order 153 - Order to implement the Moore Universal Telephone Service Act [California Public Utilities Code § 871 et seq.]. LifeLine applicants must now provide certain documentation of eligibility for the reduced-price basic telephone service, and CAB is the unit within the PUC responsible for processing LifeLine customers' appeals when eligibility is denied.

4 Statistical note: While the average-time metric can reveal major changes in performance, the 80th-percentile metric is also sensitive to less dramatic performance changes, as it is less susceptible to statistical artifacts such as extreme outliers and skewed distributions. Such artifacts can cause the average to fluctuate inconsistently, even if a high percentage of the performance data is stable.

5 Challenges Facing Consumers with Limited English Skills in the Rapidly Changing Telecommunications Marketplace. CPUC staff report, October 5, 2006. http://docs.cpuc.ca.gov/Published/Report/60608.htm.

6 Decision (D.) 07-07-043, Decision addressing the needs of telecommunications consumers who have limited English proficiency. http://docs.cpuc.ca.gov/PUBLISHED/FINAL_DECISION/70869.htm. In D.07-07-043, the PUC established rules requiring telecommunications carriers marketing in a language other than English to provide certain support to consumers in that language.  Specifically, telecommunications carriers must offer consumers to whom they market in a non-English language:  (1) live person-to-person in-language customer support during business hours; (2) additional in-language information about the transaction (such as an in-language contract, or a confirmation summary of the purchase, either in-language, or with methods for the customer to obtain translation of the summary); and (3) mandated notices and disclosures in that non-English language.  The rules do not apply to wholesale/business customers or those obtaining wireless services on a prepaid or month-to-month basis.

7 Resolution CSID - 002 - To design and implement a program that integrates Community Based Organizations (CBOs) in the Commission's outreach, education and complaint resolution processes, for consumers who have limited English proficiency (LEP), as ordered in D.07-07-043, December 12, 2007.

http://docs.cpuc.ca.gov/Published/Final_resolution/76444.htm.

8 Megalink Telecom, Inc., doing business as Devine Communications, Inc.

9 Special Supplemental Nutrition Program for Women, Infants, and Children (WIC).

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