COMMISSIONER KENNEDY COMMENT DEC FOR CBOR

III. STATUTORY FRAMEWORK FOR MARKET RULES

A. Statutory Overview

California consumers currently benefit from a comprehensive regime of existing state and federal statutes, regulations, rules, tariffs and decisions that are designed to protect consumers of telecommunication services and ensure they have the information they need to make informed decisions. These existing statutes and regulations address a wide array of issues, ranging from deceptive advertising to the resolution of billing disputes to appropriate provider employee identification.

Although not intended to be an exhaustive listing, some of the relevant statutes are set out in Appendix B to this Alternate Draft Decision.

B. Market Rules Not Rights

Consumer Empowerment in Place of Litigation

a. Safe Harbor for Compliance with Rules

These rules are designed to empower consumers to make informed decisions rather than to create a new legal basis for suing utilities, either before the Commission or in a civil court. Public Utilities Code §1759(a) authorizes public law enforcement agencies such as the Attorney General's office and local prosecuting attorneys to bring concurrent enforcement actions against utilities that are the subjects of Commission investigations, so long as those actions do not "enjoin, restrain or interfere with" the authority of the Commission.⁶ The authority of public law enforcement agencies to pursue concurrent actions under this standard was recently upheld by the California Supreme Court in People ex rel Orloff v. Pacific Bell, 34 Cal 4^th 1132 (2003). The Court reasoned that the Commission and the public attorneys would in most cases find it possible to coordinate their actions in such a fashion as to ensure that no remedy sought by the public attorneys would undermine or interfere with administrative remedies imposed by the Commission.⁷ However, the Supreme Court observed, and we agree, that concurrent private litigation presented "more of a risk of a lack of coordination with PUC officials, and thus greater danger that the civil action might undermine an ongoing regulatory program or policy of the PUC."⁸ In order to assert and protect the Commission's primary jurisdiction as it relates to enforcement of these rules, and to provide a stable and predictable regulatory environment, we state clearly that these rules are not intended to form the basis for a private right of action and that such concurrent private suits are barred. However, these rules are not intended to, and do not in any way limit any other legal remedies that individuals may possess for conduct not addressed by these rules.

b. Preventing Fraud and Abuse

A primary purpose of any regulatory agency is to prevent and remedy fraud and abuse. In these rules we focus on disclosure with respect to items that have historically been the subject of abuse, such as pay-per-call features, third party charges and lack of blocking options for 900 and 976 numbers. We also focus on providing customers with additional leverage in proving fraud, such as a rebuttable presumption that charges a customer claims are unauthorized are, in fact, unauthorized. Some rules contain mandatory elements that must be present before a carrier can lawfully collect from a customer, or before a service provider or a service contract can be changed or terminated. The object of the anti-fraud provisions in these rules is to ensure that customers pay only for services they actually ordered or used and deal only with service providers they actually authorized.

⁶ 1759(a) No court of this state, except the Supreme Court and the court of appeal, to the extent specified in this article, shall have jurisdiction to review, reverse, correct, or annul any order or decision of the commission or to suspend or delay the execution or operation thereof, or to enjoin, restrain, or interfere with the commission in the performance of its official duties, as provided by law and the rules of court. ⁷ "[I]n situations encompassed by this statute and by analogous provisions, the PUC and public prosecutors are expected to coordinate their efforts to accomplish the most efficient and effective means of remedying any misconduct of the public utility." Orloff, op. cit. p. 1151. ⁸ Ibid. FN 12, p. 1154.