DECISION ON APPEAL OF COMMISSIONER NEEPER
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
The Utility Consumers' Action Network, Complainant, vs. Pacific Bell (U 1001 C), Defendant. |
Case 98-04-004 (Filed April 6, 1998) |
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And Related Matters. |
Case 98-06-003 (Filed June 1, 1998) Case 98-06-027 (Filed June 8, 1998) Case 98-06-049 (Filed June 24, 1998) Investigation 90-02-047 (Filed February 23, 1990) |
FINAL OPINION ON PACIFIC BELL'S
MARKETING PRACTICES AND STRATEGIES
(Appearances are listed in Attachment A.)
TABLE OF CONTENTS
Title Page
FINAL OPINION 2
1. Summary 2
2. Procedural History 4
2.1. Requests to Reopen The Record 6
3. Disputed Material Facts 7
4. Witnesses Presented 8
4.1. UCAN 8
4.2. Greenlining 8
4.3. ORA 9
4.4. TIU 9
4.5. Pacific Bell 10
4.6. Wallace Roberts 10
5. Burden of Proof 10
6. Statutory and Decisional Standards Applicable to Pacific Bell's
Duty to Inform Customers 11
6.1. General Standard 11
6.2. Sufficient Information to Make Informed Choices 12
6.3. Tariff Rule 12 and Information Regarding "Packages" 14
6.3.1. Application of Tariff Rule 12 to Packages With Local Exchange Service 16
6.4. Information Regarding Caller ID Blocking 17
7. Marketing Specific Services 19
7.1. Caller ID and Blocking Service 19
7.1.1. Pacific Bell's Contract With BRI 23
7.2. Anonymous Call Rejection 25
7.3. Inside Wire Maintenance Plans 26
7.3.1. Disclosure of Different Maintenance Plans 27
7.3.2. Landlord's Responsibility 28
7.3.3. Disclosure of Competing Maintenance Providers 30
7.4. The Basics and The Essentials Packages of Optional Services 32
7.5. The Basics Plus Saver Pack 36
8. Marketing Programs and Tactics 38
8.1. Offer on Every Call 39
8.2. Sequential Offerings 40
8.3. Incentives and Sales Quotas 43
9. Providing Customer Information 45
10. Marketing to Customer Groups 49
10.1. Marketing Targeted at Minorities or Recent Immigrants 49
10.2. Marketing to ULTS Customers 52
11. Remedies 54
11.1. Caller ID Blocking 54
11.2. Sequential Offering 55
11.3. Changes to Tariff Rule 12 56
11.4. Landlord Obligation 56
12. Fine 56
13. Consumer Education Program 59
14. Business and Professions Code 61
15. Comments on Decision on Appeal of Commissioner Neeper 62
16. Changes to the Presiding Officer's Decision 62
Findings of Fact 64
Conclusions of Law 69
FINAL ORDER 75
1. Summary
In this decision we address a number of Pacific Bell's techniques for marketing its optional services to residential customers. Although marketing is the overarching theme, each individual issue is fact intensive and we address each separately and in the context of the applicable standards.
First, we find that Pacific has violated the disclosure standards of the Commission in its marketing of Caller ID Services. A customer's decision to switch from Complete Blocking to Selective Blocking based on the marketing script Pacific provides to its consumer service representatives do not constitute a fully informed waiver of a customer's privacy rights, a precondition the Commission laid out for carriers to follow in selling Called ID services. We impose a fine of $1,146,000 on Pacific to be paid to the General Fund of the State of California.
Second, we direct Pacific to take specific actions to inform affected customers on the status of their blocking and allow those customers who want to switch to Complete Blocking to do so at no charge to the customer.
Third, although we find that Pacific's sequential offering of packaged services is not a violation of existing standards, we do find Pacific in violation of §2896 for failing to inform customers of the availability of other options in marketing the packages.
Fourth, we order Pacific to fix its Tariff Rule 12 so that customers are aware of other options and that each component service of the packages can be purchased on a stand-alone basis. We impose a fine of $913,000 on Pacific, which brings the total fine against Pacific Bell to $2,373,000. Within 120 days from the effective date of this order, Pacific shall make this payment to the General Fund of the State of California.
Fifth, we find that customers of Pacific who are tenants have the right to know that the landlord is responsible for inside wire maintenance so that customers can make informed choices if they elect to purchase inside wire maintenance from Pacific Bell. We order Pacific to inform its customers that the landlords, not the tenants, have the statutory responsibility to maintain the inside wire and usable jack.
We find in favor of Pacific Bell on several issues raised by complainants. First, no law or decision prohibits Pacific Bell from requiring all service representatives to offer optional services on every call, so long as the call answering standards of General Order (GO) 133-B are met.
Second, the statutory and decisional standards that apply to Pacific Bell's marketing efforts make no distinctions based on ethnicity or duration of residency in this country. Hence, the request of some complainants that we hold Pacific Bell to a different disclosure standard for certain groups of customers is denied.
Third, based on the record before us, we find that complainants have failed to meet their burden of proof to counter Pacific's explanation with significant showing of customers who were actually confused by the name The Basics Saver Pack and the Essentials.
Fourth, we deny complainants' request that we order Pacific Bell to cease and desist from offering any individual monetary incentives to service representatives and decline to interject this Commission into the collective bargaining process. Increasing regulatory oversight is contrary to our goals.
Fifth, although Pacific Bell is subject to stringent federal and state regulations regarding the privacy of customers' information, those standards do not prevent Pacific Bell from providing customer information, subject to appropriate security measures, to its agents and affiliates for Pacific Bell marketing purposes.
Finally, we do not find Pacific's actions in this complaint case warranting any further action in the form of a pervasive customer education effort.
