7. Installed Equipment on Customer Premises

Edison argues granting an exemption to Rule V.F.1 for use of the utility's name or logo on affiliate equipment installed on the customer's premises does not harm the underlying purpose of Rule V.F.1. This is so because, by definition, equipment will not be installed on a customer's premises until that business or individual becomes a customer of the affiliate. Edison explains that in order to become a customer, the business will have already been exposed to the required disclaimer at least once. According to Edison, its affiliates do not manufacture or sell equipment that can be obtained in unaffiliated stores. Therefore, Edison believes that exempting equipment installed on a customer's premises from the disclaimer rule will not create customer confusion or provide the affiliate with an unfair advantage because the commercial transaction will have already taken place before the equipment is installed.

ORA and Edison disagree with Edison, and urge Edison to present and describe the specific situations with respect to equipment installed on the customer's premises for which it seeks exemption. In its reply, Edison emphasizes its argument stated above, and also states that the primary purpose of the affiliate name or logo on installed equipment is to inform, not to motivate a commercial transaction. For example, Edison states that security service yard signs are designed as a deterrent device to prevent criminal activities. The yard signs also provide neighbors or others with information about how and to whom to report a possible security problem. Edison also states that the use of a name or logo on a refrigeration compressor rack enables service persons (including those employed by the affiliate, the customer, and other third-party vendors) to identify clearly which pieces of equipment are owned, operated, or maintained by a particular firm. In its reply, Edison has also attached a detailed current list of those items of equipment that its affiliates may install on customer premises which it believes should be exempted from the disclaimer requirement. This list includes many security-related products and refrigeration equipment.

Although the primary purpose of using the name or logo on installed equipment may be informational, it may also have a secondary marketing purpose or effect. However, because we do not want to discourage the affiliates from informing customers how to repair the equipment they have purchased, and because consumers generally should have been exposed to the disclaimer in the marketing of the product, we grant Edison, and other utilities subject to the Affiliate Transaction Rules, a limited exemption to Rule V.F.1's disclaimer requirement for affiliate-installed equipment on a customer's premises. We do so provided that the customer has been exposed to the disclaimer in the affiliate's marketing of the product, and provided that the utility name or logo on the equipment is not accompanied by additional marketing information (i.e., that it is not accompanied by a phone number where the customer can buy similar products or receive compatible services, etc.). We do not believe this limited exemption should harm competition because our Rules also continue to prevent the utility and affiliate from jointly marketing products or services.

Furthermore, if parties can demonstrate the utility is using this limited exemption, or those granted above, to circumvent the purpose of our Affiliate Transaction Rules, we can eliminate the narrow exemptions we adopt in this decision.