4. State of Existing Consumer Protection Laws and Rules
We first must consider the legal backdrop to this proceeding before evaluating whether any specific new rule should be added to our consumer protection regime. Key considerations in this review are the following: 1) whether we have jurisdiction to adopt a new rule, and 2) whether existing laws and regulations preclude the need for new regulation action. This Part discusses both of these considerations in turn.
4.1 Jurisdiction
P.U. Code § 216(a) states that the Commission has jurisdiction to regulate all public utilities, which include "every . . . telephone corporation . . . where the service is performed for, or the commodity is delivered to, the public or any portion thereof."86 California Constitution § 6 and P.U. Code § 701 also give the Commission broad authority to regulate carriers with respect to consumer protection matters.
A large number of additional statutes and rules provide the Commission with specific regulatory authority on a variety of individual issues pertaining to carriers. For example, under P.U. Code § 332, the Commission has the ability to acquire the information that it needs to protect consumers and regulate carriers.
This regulation of telecommunications services takes place in a complex jurisdictional environment. Authority is split between the state and federal government, and within the state between the Public Utility and Business and Professions Codes. The edges of these various jurisdictions are ill-defined and remain the subject of ongoing litigation.
Perhaps the most useful delineation between federal and state authority is the distinction between intrastate telecommunications services and interstate telecommunications services. Generally the California Public Utilities Commission has authority to regulate the intrastate telecommunications services of wireline common carriers, while the Federal Communications Commission has authority to regulate interstate and international communications services.
There are, however, significant exceptions to this general policy. Jurisdictional boundaries, in multiple instances, cut across any interstate or intrastate distinction. The FCC preempts states from regulating entry and rates of wireless carriers, but it permits states to regulate "terms and conditions" of wireless providers.87 Also the federal government has found that all enhanced or information services (in layman's terms, services relating to the Internet) are not subject to Title II common carrier regulations and, as a result, are broadly exempt from state communications regulations.88 Blanket preemption further applies to state regulation of payphone providers.89 Thus, independent of the intrastate or interstate nature of the service, this Commission cannot set the rates for payphone, for wireless services, or for Internet services offered by an Information Service Provider.
This brief discussion, which does not definitively delineate the boundaries of this Commission's authority, shows that the jurisdictional landscape that the Commission operates within is extremely complex. Consequently the development of a new General Order requires that we explicitly link the rules that we adopt to our statutory authority.
4.2 Existing Laws and Regulations
Another important legal consideration is the breadth of existing consumer protection laws and regulation. Duplication of existing laws and rules may be inefficient and may create confusion. In many situations the existence of law and regulations precludes the need for further Commission action.
In reviewing consumer protection laws and rules, we find that in most cases there already are significant consumer protection laws and rules that protect our State's consumers from abusive telecommunications carriers. This Part examines some of the existing laws and rules that that concern issues raised by consumer representatives in this proceeding.
Disclosure received significant attention in this proceeding, but upon review, we find that there is already significant statutory guidance on this topic. P.U. Code § 2896(a) requires carriers to offer customer service that provides sufficient information about services for subscribers to be able to make informed choices about services and providers.90 Carriers also must provide subscribers information concerning the regulatory process and how subscribers can participate in that process, including resolving complaints.91 Additionally P.U. Code § 2890.2 will require, as of Jan. 1, 2007, that wireless carriers to provide customers with a way that they can obtain reasonably current and available information on their calling plan and service usage. 92
Further disclosure provisions are included in the California Civil Code. This Code imposes the duty on sellers, including carriers, to "deliver a copy of a consumer contract to the consumer at the time it is signed by the consumer if the consumer contract is signed at a place of business of the seller."93 Thus a subscriber who signs a carrier contract at the carrier's place of business must receive a copy of that contract at that time. The Civil Code also accounts for the fact that carriers may reach contracts with subscribers over the phone or the Internet too. The Code provides that "[i]f the consumer contract is not signed by the consumer at a place of business of the seller, and the seller has not provided a copy of the consumer contract for the consumer which the consumer is instructed to keep, the seller shall mail or deliver a copy of it to the consumer within 10 calendar days after the seller receives the signed consumer contract."94
Privacy was another topic of rules proposed by consumer groups. Yet we find that California has more stringent privacy protections than afforded federally and in other states. P.U. Code § 2891 already provides much, if not all, of the protection that those groups seek. Section 2891 states that carriers shall not "make available to any other person or corporation any of the following information of residential subscriber's without the residential subscriber's written consent . . ." and then provides a detailed list of what qualifies as protected information.95
The California Civil Code includes further privacy protections. Under the Civil Code, "[a]ny person or business that conducts business in California, and that owns or licenses computerized data that includes personal information" must disclose "any breach of the security of the system following discover or notification of the breach in the security of the data."96 Personal information in this context refers to an individual's name97 along with a social security number; driver's license number or California Identification card number; or a credit card or debit number along with a security code, access code, or password.98
Moreover both state and federal law have privacy protections designed to protect consumers from unwanted solicitation. P.U. Code § 2894.10 recognizes this fact, and also requires local exchange carriers to provide a residential customers directory and annual notice of privacy rights with respect to telemarketing.99 Federal law requires carriers to protect confidentiality of customer proprietary information and sets forth the prerequisites for disclosure of individually identifiable customer proprietary network information.100
Consumer representatives voiced further concerns regarding fraud, but we find that there are substantial protections in place with respect to this topic too. The California Bus. & Prof. Code contains provisions to prevent unfair competition, fraudulent business practices, and deceptive, untrue, or misleading advertising.101 While the Commission's Enforcement Division plays an important role in investigating these types of fraudulent business practices, "actions for relief shall be brought in a court of competent jurisdiction only by the California Attorney General or District Attorney."102
Both federal and state law prohibit false advertising. Under federal law, "[u]nfair methods of competition in or affecting commerce, and unfair or deceptive acts or practices in or affecting commerce . . . are unlawful."103 Bus. & Prof. Code § 17500 provides, in part, that it is unlawful for a carrier to perform services or to disseminate or cause to be disseminated any statement which is "untrue or misleading."104
As with Business and Professions Code Section 17200 et seq., the enforcement of violations of the Business and Professions Code Section 17500 lies primarily with the AG and District Attorney ("DA").105 We will continue to work closely with the AG and DA to inform them of potential violations of Section 17500, and our investigators will work in tandem with them where appropriate.
An additional subject of debate in this proceeding was prepaid calling cards. Pursuant to P.U. Code § 885, some prepaid calling card providers are under Commission jurisdiction for their prepaid calling card services. The Commission's enforcement authority, however, is limited to those providers that are certificated or have registered with the Commission, and that violate existing P.U. Code sections. Individual vendors are explicitly exempt from the Commission's registration requirements.
Broader provisions regarding prepaid calling cards are included in Bus. & Prof. Code § 17538.9(b). This statute contains highly detailed rules applying to prepaid calling cards and services and discusses the required disclosure in advertising on cards at the point of sale and also the point of use. We work with the AG, DA, or other appropriate authority to investigate claims of failure to disclose appropriate information for prepaid callings cards.
Further laws and rules relevant to this proceeding are cited in Appendix D. This Appendix, which includes a compendium of laws and rules compiled by the Wireline Group, demonstrates the depth and breadth of existing consumer protection laws and regulations available to telecommunications consumers.106
In conclusion, we find that in most cases the protections consumer representatives were seeking already exist. We, therefore, conclude that many of the problems in consumer protection lay not with a lack of rules, but rather, in the public's knowledge of these protections, and the Commission's enforcement of existing rules and laws.
86 Cal. Pub. Util Code § 216(a). A telephone corporation is any "corporation or person owning, controlling, operating, or managing any telephone line for compensation within this state." Id. at § 234(a).
87 47 USC §332.
88 In 1996, Congress declared that "[i]t is the policy of the United States-(1) to promote the continued development of the Internet and other interactive computer services and other interactive media; (2) to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by
Federal or State regulation." 47 U.S.C. § 230(b)(1)-(2) (2000).
89 47 USC § 276.
90 Cal. Pub.Util. Code § 2896(a).
91 Id. at § 2896(d).
92 Id. at § 2890.2 (using the words "providers of mobile telephony services" instead of "wireless carriers").
93 Cal. Civil Code § 1799.202.
94 Id.
95 Cal. Pub. Util. Code § 2891. Protected information includes a subscriber's personal calling patterns, the subscriber's credit or other personal financial information, services which the residential subscriber purchases from the corporation or from independent suppliers of information services, and demographic information about an individual subscriber. Id.
96 Cal. Civil Code § 1798.82.
97 Name is defined as a first name or first initial and last name. Cal. Civil Code § 1798.82.
98 Id. This does not include publicly available information from federal, state or local government records. Id. at § 1798.82.
99 Cal. Pub. Util. Code § 2894.10.
100 47 U.S.C. § 222.
101 Cal. Bus. & Prof. Code § 17200.
102 Or any County Counsel authorized by agreement with the DA, or City Attorneys, in some instances. Id. at § 17204.)
103 15 U.S.C. § 45(a)(1). This statute does not apply to unfair methods of competition involving foreign commerce. 47 U.S.C. § 45(a)(1).
104 Cal. Bus. & Prof. Code § 17500.
105 See Greenlining Institute v. PUC, 103 Cal.App.4th 1324 (1st Dist. 2003) (holding that the Commission lacks jurisdiction to adjudicate claims under Business and Professions Code Sections 17200 et seq, and 17500).
106 TURN argues that the list is "extremely overly inclusive." Reply Comments of The Utility Reform Network, Consumer Federation Of California, National Consumer Law Center, Consumers Union, Disability Rights Advocates and Calpirg, On The Proposed Decision of Commissioners Peevey and Kennedy, p. 5 (Jan. 23, 2006) ("Consumer Groups Reply Comments"). We, however, find that this list is a useful resource, as it provides a thorough list of the range of rules and laws that may be brought to bear on a consumer protection issue.
