Background

As the Commission observed in opening this rulemaking, the past decade has been witness to a rapid evolution in the telecommunications industry, not only in the technology the industry employs but as well in its structure, the mix of services it provides, and the ways it provides those services. A wide variety of what were once monopoly services is increasingly available from competing providers. Regulatory policies have likewise been evolving in ways aimed at enabling and promoting competition and all the benefits competition has promised to provide. At the same time, legislators and regulators have not been blind to the potential for abuse that may exist in any market, regulated or fully competitive. This Commission has for some time recognized that the ongoing shift to a more competitive telecommunications marketplace challenges it to find new methods to protect consumers, and it has made great strides in meeting that challenge.

The Commission's stated purpose for this proceeding, then, is to consider whether to revise its existing consumer protection rules and/or establish new rules applicable to regulated telecommunications utilities. If changes are needed, the task is to decide what specific rules should be revised or established and for which classes of telecommunications utilities.

The rulemaking order that began this proceeding introduced a Commission staff report suggesting specific consumer protection measures, including a telecommunications consumers' bill of rights, rules to protect those rights, and changes to the industry's current tariffing and limitation of liability practices. Respondent utilities and interested parties were invited to submit comments and replies, and a full spectrum of stakeholders did so. Regulated utilities were well represented, individually and in groups and associations expressing shared views. Local, state and federal governments commented. Individuals and organized groups made presentations on behalf of residential and small business consumers. In all, the Commission received 71 submittals from 39 groups consisting of 67 named entities, some of which were in turn associations of many more unnamed members. Not surprisingly, commenters representing the telecommunications utilities were generally opposed to the staff report's proposed rights and rules and other measures, while consumer representatives were generally supportive. There were exceptions in each camp, both as to individual commenters and specific proposed measures. The rule-by-rule discussion sections to follow will provide more on the positions taken in comments, and some of the alternatives suggested.

The Commission's next step was to arrange to hear as much input as possible from consumers. The public was invited to 20 public participation hearing sessions in 13 locations throughout the state between mid-June and September 2000. With the utilities' assistance, informative notices were published and mailed to virtually every telecommunications consumer in California. Those unable to attend were urged to express their views in writing. By fall 2000, some 1200 people had taken the time to attend one of the public sessions and more than 300 of them made public statements. Those who spoke represented a cross section of the affected public: residential customers, large and small business customers, senior citizens, union members and representatives, public officials, minority business associations, low income groups, community-based organizations of every kind, and many others. Another 2000 responded and made their views known by letter or e-mail. The general public sentiment as expressed in both the public participation hearings and correspondence was overwhelmingly in favor of the Commission's taking on a much stronger consumer protection role.

In January 2001, Assigned Commissioner Carl Wood issued two rulings seeking comments on two additional sets of proposed rules falling within the scope of the rulemaking proceeding. The first set was Proposed Rules on the Inclusion of Non-communications-Related Charges on Telephone Bills. On September 29, 2000, Governor Gray Davis signed Assembly Bill (AB) 994¹ extending a Public Utilities Code Section 2890² ban on non-communications-related charges in telephone bills to July 1, 2001. AB 994 also added Section 2890.1 to the Public Utilities Code, explicitly directing the Commission to adopt by that date any additional rules it determined necessary to implement the billing safeguards set forth in Section 2890. AB 994, Sections 1(c) and 1(d), cites this rulemaking proceeding as a proper vehicle for the Commission to do so. After considering some 31 sets of comments and replies, we issued Decision (D.) 01-07-030 adopting a set of interim rules governing the inclusion of non-communications-related charges on telephone bills. We stated that those rules, possibly with some modifications, would be incorporated into and superseded by the new general order we adopt in this decision.

In the second January ruling, the Assigned Commissioner sent out for comments his Proposed Rules for Slamming, prepared in response to the FCC's decision in CC Docket No. 94-129. The FCC rules gave each state the option to act as the adjudicator of slamming complaints, both interstate and intrastate. Under the FCC's order, each state which opts to take on that responsibility must notify the FCC of the procedures it will use to adjudicate individual slamming complaints. We received 24 sets of comments and replies on those proposed rules.

On June 6, 2002, Assigned Commissioner Wood issued a draft decision and a proposed general order, "Rules Governing Telecommunications Consumer Protection," for public comment. Thirty-two sets of comments were filed, followed by four days of workshops during which industry and consumer representatives thoroughly vetted the draft decision and general order. At the conclusion of the workshops, Commissioner Wood agreed to suspend the proceeding schedule to allow carrier and consumer representatives to convene an informal working group to suggest rule changes both sides could agree to. After the working group submitted its report, the parties were afforded two more opportunities to submit comments and reply comments before the next draft decision was issued; 24 groups did so, producing an additional 29 sets of comments or replies. Parties had another opportunity for input when the draft decision and general order were mailed for public comment on July 24, 2003 as required by Public Utilities Code Section 311(g)(1). Additional changes were made in response to the Section 311(g)(1) comments, and the revised draft served a second time to parties to allow comments and replies to comments on those changes and the draft decision's proposed treatment of the economic effects of the new general order.

After considering extensive party and public input, the Commission is adopting G.O. ___, Rules Governing Telecommunications Consumer Protection, Appendix A to this order. New G.O. ___ includes five parts: Parts 1 and 2 comprise the final version of the telecommunications consumers' Bill of Rights and rules to protect those rights first proposed in R.00-02-004; Part 3 consists of the Rules Governing Privacy; Part 4 is the set of Rules Governing Billing for Non-communications-Related Charges we issued in D.01-07-030, with only minor changes; and Part 5 is Rules Governing Slamming Complaints.

Below we discuss each part of new G.O. ___ in turn. For the consumer protection rights and rules in Parts 1 and 2, each right is addressed and then each rule, linking the rule to the right(s) it will help safeguard. The input we received on the draft rights and rules from the parties was extensive and generally very constructive. It would be unhelpful, and because so many contributed, impractical as well, to repeat every point raised in the comments. Instead, we summarize the significant issues raised and explain how these updated rules accommodate them.