Comments on Draft Decision

The draft decision of the Assigned Commissioner was mailed to the parties on the service list for public review and comment in accordance with Public Utilities Code Section 311(g)(1). After revising the draft to reflect comments received, the Assigned Commissioner sought additional input on those changes, and particularly invited anything additional the parties might have on the draft decision's treatment of the economic effects of the proposed new general order.

In response to comments, we have made substantive changes in the decision and the general order.¹²⁹ We provide an overview of those changes here, and we describe them, and the reasons for them, more fully in the decision text.

The July 2003 draft general order added a comment in Part 1 that the Bill of Rights is to serve the same purpose as a statement of legislative intent. Some service providers have asked us to clarify further whether the Part 1 Bill of Rights, in and of itself, creates a private right of action. We clarify that it does not create a private right of actions for damages, and we have added wording to the Part 1 comment to that effect.¹³⁰ Part 1 simply identifies the fundamental consumer interests the rules are designed to protect. That said, these rules do not in any way displace, preempt, or limit any statutorily created private right of action.¹³¹ Moreover, as we have explained elsewhere in this decision, conduct that violates the rules may be separately actionable under various laws, such as the Unfair Competition Act. Thus, we have clarified several principles in the introductory sections of Parts 2, 4 and 5. Compliance with these rules does not relieve carriers of other obligations they may have under their tariffs, other Commission general orders and decisions, FCC orders, or state and federal statutes. Any remedies the Commission may impose for violations of these rules are not intended to displace other remedies that may be imposed by the courts for violation of consumer protection laws.¹³² These rules do not preclude any civil action that may be available by law, nor do they limit any rights a consumer may have. We intend to continue our policy of cooperating with law enforcement authorities to enforce consumer protection laws. Prosecution, whether civil or criminal, by any local or state law enforcement agency to enforce any consumer protection or privacy law does not interfere with any Commission policy, order or decision, or the performance of any duty of the Commission, related to the enactment or enforcement of the rules. These are not new provisions, but not all of them were explicit in each of the Part 2, 4 and 5 drafts as they are now.

Some service providers have requested that we clarify the purpose of the comments that appear throughout the general order. The comments serve the same purposes as official comments that accompany many statutes and rules (e.g., the California version of the Uniform Commercial Code, or the Federal Rules of Civil Procedure). They are included to aid in interpreting these consumer protection rules, primarily by explaining the purpose and intent of specific provisions. Some of our comments include illustrative examples of how a rule is to be applied. Those examples are intended to be helpful to service providers, customers, and decision makers who may be called upon to interpret the rules. Some comments include cross-references, for a variety of reasons. Some cross-references highlight the fact that a rule implements or incorporates certain statutes. Others clarify the relationship of these rules to other laws. Thus, the comments and any examples they may contain are not rules. They are simply intended to elucidate the purpose of the rules and to aid in interpretation. Should there be any inconsistency between the rules and the comments in a given situation, the rule governs.

The Parts 2 and 4 definition of "solicitation" has been revised to match that used in the Business and Professions Code.

In response to comments on the July 2003 draft and March 2004 revised draft, several changes have been made in Part 2, Rule 1 that will make it easier and more economic for carriers to comply while still providing the disclosure subscribers and the public need. Carriers may not, however, continue what some indicated is their current practice of referencing supplementary material (marketing brochures, rate sheets, etc.) as a binding part of their service agreements and contracts, in part because subscribers may never have been aware of it or been provided copies. References to tariff terms and conditions are still permitted so long as subscribers are provided easy access to them.

Rule 2 has been largely restored to its form in the July 2003 Assigned Commissioner's draft, in response to comments from consumer groups' that it had been substantially gutted in the March 2004 revised draft. At the Attorney General's suggestion, we have added a Finding of Fact supporting our use of Section 532 to establish an exception from the filed rate doctrine for Rule 2(g). When a utility gains an advantage from unfair or unlawful conduct, including untrue and misleading statements, deceptive advertisements, any unfair or unlawful act or practice, or any violation of G.O. ___, the prohibition under Section 532 on the receipt of different compensation from that in the tariffs should not apply as a defense to actions or proceedings brought to redress that conduct. Rule 3 has been modified to make compliance easier and more economic. Rule 3(c) has been narrowed to apply only to carriers offering basic service rather than to all carriers as in the draft. Carriers that considered the draft decision's 30 and 45 day no-penalty service cancellation provisions burdensome will find relief in Rule 3(f): subscribers with new tariffed service or any new contract for non-tariffed service now have 30 days to cancel without penalty, and the penalty-free period begins when service is initiated rather than when their written contracts and confirmation materials are provided. Rule 3(g) returns to its earlier, less redundant and less prescriptive wording granting subscribers a rebuttable presumption that disputed charges for which no record of affirmative subscriber authorization is available were not authorized. Under Rule 3(i), consumers who are concerned about identity theft may still withhold their social security numbers when requesting service, but carriers may request other identification sufficient to verify their identities and run a credit check. Rule 5(a) now recognizes that some carriers accept prepayment or credit card billing in lieu of deposits. In Rule 6(g), carriers' suggestion to rename the former "Taxes" section to "Government Fees and Taxes" has been accepted, thus recognizing that some fees required by government to be collected from subscribers and remitted are not legally taxes.

Rules 4, 9, 11, 13, 14 and 15 remain substantially unchanged from their July 2003 and March 2004 draft versions. Rule 7 has only one change: Rule 7(a) no longer prohibits late payment penalties on overdue balances of less than $20.

Rule 8(b) once again allows subscribers to hold carriers to the term contracts they enter into. Carriers may still make unilateral changes that do not raise rates or impose more restrictive terms or conditions; changes not affecting rates or charges and reasonably necessary to prevent unlawful, fraudulent or abusive conduct; or changes in taxes and fees mandated by and passed through to government.

Former Rule 12 from the staff report and Assigned Commissioner's drafts has been revised to become Part 3, Rules Governing Privacy, of the new general order. Former Parts 3 and 4 have been renumbered as Parts 4 and 5. Our new Part 3 privacy rules are explained fully in the corresponding section of this order above.

The only substantive revisions to Part 4, Rules Governing Billing for Non-Communications-Related Charges, are those to the introductory and definition sections explained in the preceding paragraphs.

The most significant revision to Part 5, Rules Governing Slamming Complaints, is deletion of former Section D, Unauthorized Local Exchange Carrier Changes. Where the Assigned Commissioner's draft decision proposed retaining the current local exchange carrier slamming provisions established in D.95-07-054, Appendix B (Consumer Protection and Consumer Information Rules for CLCs), local exchange carrier slamming allegations will instead be subject to the same requirements as those involving intraLATA, interLATA and interstate toll service. A Part 5 provision requiring carriers to provide copies of their FCC slamming reports has been deleted in recognition of the FCC's having discontinued the report. Lastly, all lead times for carriers responding to CAB requests have been extended to twenty business days in recognition of CAB's current practice.

We have dropped the potentially time-consuming step proposed in the July 2003 draft of having carriers prepare and submit for Telecommunications Division's review a plan for implementing new G.O ___. Carriers will now have 120 days after the date this decision is mailed to bring their operations into compliance with G.O. ___ and this interim order, and to certify that they have done so. We have not extended the compliance period as recommended by carriers. We anticipate that carriers can and will revise their tariffs and practices within the time allowed. Our Rules of Practice and Procedure already provide a procedure in Rule 48(b) for parties to seek an extension of time to comply with a Commission order by sending a letter to the Executive Director, with copies to all other parties. We would expect any such extensions to be granted only where the carrier has demonstrated that the delay was unavoidable, has tailored the request as narrowly as possible to encompass only that part of the order and general order for which it is truly needed, has submitted a reasonable plan and timetable for achieving compliance within the requested time extension, has taken all feasible steps to lessen the effects on customers of the requested delay, and is able to demonstrate good faith compliance with all other parts of the order and general order.

We have added additional discussion of our Rules Governing Privacy, and our treatment of the economic effects of the new rules, to further explain our determinations and address comments received in response to the Assigned Commissioner's March 2004 revised draft.

We have made other, lesser changes in various parts of this order and the new general order to update them, to correct minor errors, and in some cases, to better express or explain what the draft intended. We have also added a section confirming our preliminary scoping memo. This is consistent with our practice for proceedings in which the order is issued without hearings and where no changes to our preliminary scoping memo's determinations are needed. Lastly, we have added a section addressing pending motions, one of which was filed early in the proceeding and the others after the Assigned Commissioner's draft decision or revised draft decision was issued.