Conclusion

In summary, I feel that the modified presiding officer's decision of Administrative Law Judge Jean Vieth is supported by the law and the evidence.

/s/ GEOFFREY F. BROWN

Geoffrey F. Brown

Commissioner

San Francisco, California

September 23, 2004

I.02-06-003

D.04-09-062

Dissent of Commissioner Susan P. Kennedy

Item 45 Cingular Wireless

September 23, 2004

I dissent.

While I agree that Cingular's combination of a stiff early termination fee with a no-trial-period contract violated Section 451, I disagree that the evidence supports fines and reparations of the size this decision imposes.

We do not regulate either service quality or prices in the wireless industry. We can, and we should, discipline carriers who fail to provide the "just and reasonable" service required by Section 451.

In exercising our power under that statute, however, we must be careful to not overstep the narrow boundaries within which we have authority over wireless carriers. In my view, today's decision does just that.

First, as to service quality, the decision punishes Cingular for providing inadequate service. Although the decision is couched in terms of failure to disclose problems with service, it is clear that the real issue is not disclosure per se, but service quality. If Cingular's service quality had been adequate in the minds of my colleagues, the failure to disclose the state of the system would not have risen to the level of a violation.

Second, as to rates, by ordering a wholesale return of all early termination fees paid by Cingular customers over a two-year period, this Commission is effectively reducing rates for those customers for that period. Each customer who gets a rebate will now have been provided service for a lower fee than customers who do not receive a rebate. In my alternate decision, I frankly acknowledged the possibility that reparations might trigger a rate regulation challenge. This decision guarantees that challenge, in my opinion, and I will be very surprised if it is not successful.

Beyond its unwarranted intrusion into service quality and rate regulation, this decision has other serious flaws. Record support for findings of wrongdoing largely consists of a small number of clearly unrepresentative customer accounts. This is not an acceptable way to regulate. We state that Cingular was engaged in widespread wrongdoing that justifies a heavy fine, but the only hard evidence to support that conclusion is complaints from 49 clearly unhappy customers --- out of a customer base of millions. Not only does a decision based on such a small and biased data set fail basic tests of statistical reliability, contrary evidence in the record has either been disregarded or misinterpreted. For example, the record reveals that during 2001, Cingular's average minutes of use per phone per month doubled from around 250 to over 500. The majority points to this as evidence of wrongdoing because it occurred when the system was briefly stretched to capacity. But is it not much more compelling evidence that Cingular's customer base was happy with its service? Customers do not normally double their use of a product unless they are satisfied with it.

Furthermore, we are punishing behavior that was not against any Commission rule at the time. We should be reluctant to impose heavy fines for allegedly bad behavior in the absence of regulations specifically prohibiting that behavior. Finally, I am troubled by the fact that the record fails to disclose that Cingular's behavior was significantly different from that of any of its competitors. I appreciate that "selective enforcement" is generally not a defense (i.e., responding to a charge of speeding by saying that "the other guys were going just as fast".) However, I am very concerned by this situation, because we have singled out one company for punishment before adopting rules of general application to the industry as a whole.

/s/ Susan P. Kennedy

September 23, 2004

San Francisco, California