6. Discussion
6.1 Violation of the Public Utilities Code and D.95-04-028
Having summarized the voluminous record, we now address whether this record establishes, by a preponderance of evidence, that Cingular has violated the law.
6.1.1 Section 451 -- Just and Reasonable Service Mandate
The OII's Ordering Paragraph 1(a) and 1(b) assert, respectively, that Cingular violated § 451 by failing to comply with that statute's service mandate and by establishing unreasonable rules. Section 451 requires that all public utilities not only charge just and reasonable rates but also "... furnish and maintain adequate, efficient, just, and reasonable service ... necessary to promote the safety, health, comfort, and convenience of its patrons, employees, and the public."
A review of decisions spanning several decades30 reveals that, as relevant here, the Commission has interpreted § 451's reasonable service mandate to require, for example, that utilities provide accurate consumer information by a readily accessible means, refrain from misleading or potentially misleading marketing practices, and ensure their representatives assist customers by providing meaningful information about products and services.31
We find that the record in this proceeding establishes a corporate pattern and practice that resulted in unreasonable customer service in violation of § 451 for the period January 2000 until May 2002,32 when Cingular adopted a 15-day return/cancellation policy and abandoned its prior official policy. That policy required customers to pay an ETF if they wished to cancel their contracts before the expiration of the typically one- or two-year contract terms that Cingular offered. That policy was unjust, and therefore unreasonable, because customers were unable to determine whether they would be able to use Cingular's wireless service in the ways they desired until they attempted to make or receive calls-and no customer could do this without first signing a contract for service.33
Cingular concedes that its ETF was designed to avoid churn. Thus, in pursuit of market share, Cingular's prior official policy effectively trapped customers into contracts for service regardless of whether Cingular could provide the coverage or capacity these customers sought. This is the crux of Cingular's violation of § 451. We focus upon the conditions under which Cingular imposed the ETF, resulting in an unjust rule and constituting unreasonable service. Our investigation does not seek, either directly or indirectly, to regulate Cingular's rates. We make no findings on whether imposition of an ETF is unreasonable per se. Neither do we make any findings about what amount, if any, constitutes a reasonable or unreasonable ETF.
All of the expert witnesses in this proceeding testified that wireless service cannot be guaranteed, given the physics of radio energy. Hilly or mountaineous terrain, large structures and thick walls may all prevent a wireless system from functioning at a particular location, as may other obstacles, natural and made-made. Cingular's Jacot testified that considering these vagaries, using the phone is the best way to determine if a wireless carrier can provide the service one requires. Thus, on this basis alone we could find that Cingular's prior official ETF policy was unjust-without even considering the state of Cingular's GSM infrastructure development at that time.
Other evidence in the record, on balance, reinforces our assessment that Cingular's no return/no refund/ETF policy was an unjust rule, and that application of this unjust rule resulted in unjust and unreasonable service, which violated § 451. As we discuss in Section 5 of today's decision (and discuss further in the subsection immediately following this one), Cingular knowingly created and pursued advertising, marketing and sales strategies that sought to secure market share by building Cingular's subscriber base and encouraging increases in minutes of use per customer regardless of the ability of Cingular's expanding GSM system to deliver service.
Caceres and the customer witnesses provide firsthand, verified statements and sworn testimony about the frustrations they experienced as customers of Cingular. These witnesses' stories are not equally specific nor do they relate equally egregious facts, but they are largely credible. Considering the totality of the evidence, we conclude that these customers' experiences were not unique but that many other customers were discovering, only after signing up with Cingular, that Cingular's service did not meet their needs. Cingular certainly knew from customers' complaints, what it already knew from its own engineers, that the demands on the Cingular system were far surpassing the system's ability to meet those demands. Instead of allowing new customers a "grace period," Cingular deliberately spurred demand that it could not meet, while continuing to impose its no return/no refund/ETF policy. Cingular's apparent hope was that these customers would prefer to put up with continued frustrations rather than incur an ETF of $150 (or more). The imposition of such fees under these circumstances was unjust and unreasonable.
Cingular argues that the complaint numbers need to be considered in the context of total customers, and that since its customer base expanded so greatly between 2000 and 2001, it is not surprising that the number of complaints also increased. Cingular calculates, for example, that the informal complaints to the Commission represent "a complaint rate measured only in the thousandths of a percentage point" and suggests that this measure indicates an enviable performance record. (Cingular opening brief, p. 8.)
It is a practical impossibility to interview all, or even a small fraction, of the customers of a large utility such as Cingular. The question for us here is whether the experience of the complaining customers is broadly symptomatic of Cingular's practice and the conditions on Cingular's system during the period covered by the investigation. We find that it is. The growth that Cingular strove for and achieved occurred in each of California's major metropolitan areas, though it was not limited to them. Cingular adopted promotional policies for system-wide use in California and imposed its no return/no refund/ETF policy on a system-wide basis. The coverage and capacity problems likewise appear to be general. Cingular has provided no evidence that these problems were isolated and local. Neither has Cingular offered any persuasive evidence that the "silent majority" of its customers should be understood as indicating that Cingular's rules and practices were reasonable and resulted in reasonable service.
We recognize that there is evidence that Cingular waived part or all of its ETF (which did not include its agents' ETF) for an undetermined number of customers who happened to attempt to cancel their contracts within the first 15 days. We have already pointed out, in Section 5.3 of today's decision, some of the flaws with Cingular's assertion that this so-call "de facto policy" broadly supplanted its official policy. While these waivers do not negate the official policy, in Section 6.2 of today's decision we consider to what extent Cingular's waiver of some ETFs, or its other financial concessions to some customers, should be considered a mitigating factor and should reduce the penalty for violation of § 451.
In finding Cingular's ETF policy unreasonable, we also find its agents' and dealers' ETF policies unreasonable, and we hold Cingular accountable for those policies in accordance with the law of agency. Not only does the record as a whole establish that Cingular exercises substantial control over its agents and dealers when it chooses to, but Cingular's briefs concede that the law of agency governs its relations with its agents and dealers.
6.1.2 Section 451/Section 2896 - Required Disclosure
Ordering Paragraph 1(c) of the OII asserts that Cingular failed to provide adequate information to customers about its service, in violation of § 451 and § 2896. As relevant here, § 2896(a) requires all telephone corporations (including wireless carriers and resellers) to provide customers with "[s]ufficient information upon which to make informed choices among telecommunications services and providers."
In D.02-02-027, which granted limited rehearing of D.01-09-058, the underlying decision in UCAN v. Pacific Bell, supra, the Commission found no need to address definitely whether § 2896 is self-executing or "may only be implemented through rules adopted by the Commission." (D.02-02-027, slip op. at p. 7.) D.02-02-027 cites legislative history indicating the author's intent to codify minimum customer service standards, some already required by the Commission. The decision states:
While section 2896 provides a statutory basis for the Commission's requirements regarding the prospective remedies imposed by [D.01-09-058], we need not rely upon section 2896 alone to impose penalties. When misleading or potentially misleading information is provided to customers regarding optional services, such practices clearly violate section 451's mandate that telecommunications carriers provide reasonable service. (D.02-02-027, slip op. at p. 8.)
In fact, as we discuss in the preceding subsection, the Commission has long-required all public utilities-not solely telecommunications utilities-to provide enough information to customers to enable them to make informed choices about utility service.
We do not need to address Ordering Paragraph 1(f), which asserts that Cingular failed to establish statewide service quality standards in violation of § 2896(c), since neither CPSD nor UCAN pursued this charge at hearing or in the briefs. In our pending rulemaking, R.02-12-004, filed on December 5, 2002, we are reviewing whether the Commission should revise the service quality standards which govern telecommunications carriers, and if so, how.
The record on disclosure establishes that Cingular provided very little information to potential customers in its advertising or marketing materials, or via its sales agents, that could assist such customers in assessing Cingular's coverage and capacity capabilities. CPSD and UCAN go further; they argue that both in advertising and at the point of sale, Cingular and/or its agents misleadingly portrayed the capabilities of Cingular's network.
As Section 5.2 of today's decision discusses, the maps Cingular placed in brochures and stores are not particularly helpful, since they are rate area maps, not coverage maps. In other words, they show where Cingular's rate plan applies and thereby strongly suggest concurrent coverage, but they do not identify known areas within those rate areas where coverage is problematic or nonexistent. Furthermore, Caceres and some customer witnesses report receiving coverage assurances from agents that proved to be erroneous. There is no evidence that Cingular provided sales people with training about coverage or supplied them with up-to-date coverage information in any systematic way. In fact, Cingular admits that any information more specific than the maps generally is unavailable at the point of sale. It must be obtained from customer service representatives, and even they do not have ready access to the information necessary to predict the actual likelihood of coverage at a given address, but must contact radio frequency engineers for it.
Were Cingular's disclosure practices a violation of law? Weighing evidence on the recognized imperfections in wireless systems generally against evidence of the scope of Cingular's known network problems in 2001, including its inability to meet its own internal measurement standards, we find that Cingular's coverage disclosures were insufficient to permit customers to make informed choices about whether to contract for its service. This failure does not meet the just and reasonable service mandate of § 451, and cannot meet an objective interpretation of the duty owed to customers under § 2896(a). We calculate the penalty impact of this violation in Section 6.2 of today's decision.
We do not reach the same conclusion for 2000 or 2002, however. The evidence of network problems in 2000, on balance, is less comprehensive and therefore less compelling; and in 2002, Cingular's network showed measurable improvement. Regardless, we think the evidence as a whole militates for clearer, more accurate customer disclosures on a prospective basis. The Commission may order prospective remedies in an adjudicatory proceeding even though it does not find a violation of existing law. Section 761, in relevant part, authorizes the Commission, after hearing, to revise "the rules, practices ... or service of any public utility" and "by order or rule, [to] fix ... the rules, practices ... [or] service ... to be observed ... or employed."34 We discuss such remedies further in Section 6.2 of today's decision.
CPSD and UCAN also argue that Cingular routinely failed to disclose its agents' ETFs to customers. Clearly, the newspaper ads we examine in Section 5.4 of today's decision do not disclose the existence of an agents' ETF, let alone the amount of that ETF, though they do provide notice that unidentified conditions/restrictions may apply in addition to Cingular's ETF. The evidence establishes that neither Cingular nor its agents attempted to spell out the full, potential cost of handset and service packages in advertising: Was this a violation of existing law? Kamins admitted that some customers might be confused. The sworn statements of customers, to the effect that they did not realize they had contracted with a Cingular agent until they tried to cancel their contracts and learned of the additional ETF, certainly suggests that some customers were confused. The confusion underscores the success of Cingular's "look and feel" marketing efforts and logo-driven advertising. It also suggests, however, that these customers did not read the contracts they were provided, since the contracts in the record not only require a customer's signature, but require the customer to initial the portion that discloses the applicable ETF.
We conclude that while Cingular's ETF disclosures could have been clearer, they do not violate existing law. The contracts contained sufficiently detailed disclosures, and customers had the opportunity to decline to execute the contracts. We reiterate our opinion that Cingular's legal culpability stems from imposing the ETF (and permitting its agents to impose an ETF) from day one of the contract period-that is, without providing any trial period. Nonetheless, considering the expert opinion in the record on the potential for confusion, as well as evidence that some confusion may have occurred, we believe clearer disclosures are warranted, both in advertising and at the point of sale, and should be ordered prospectively.
Likewise, we are not persuaded that the coverage implications in the newspaper advertising or other marketing brochures introduced in the record support a finding that Cingular and its agents engaged in systematic deceptive marketing and advertising practices. Certainly some of the ads, particularly the "Where-ever, When-ever" ad, suggest that Cingular's network could provide better coverage and capacity than many customers experienced. But this ad, run by a Cingular agent, appeared in newspapers in 2002, when Cingular's internal service quality measurements showed marked improvements over 2001. The ads touting "anytime minutes" and the like use language that has become common parlance for competitive rate plans offered by the wireless industry generally, not only by Cingular. Thus, in determining whether advertising utilizes puffery or outright deception, interpretation is key, and the focus group evidence in the record reflects that consumers formulate differing interpretations, just as experts do. We do not find that Cingular or its agents crossed the line and violated these statutes. Again, given a reasonable trial period, consumers who determined that Cingular's service did not live up to the advertised claims would have had a simple remedy-they could have cancelled service. The violation we find centers on Cingular's failure to offer any trial period at all for the period from January 2000 through April 30, 2002. In fact until May 1, 2002, Cingular's official policy expressly prohibited returns or refunds once the contract was signed.
6.1.3 Section 451/D.95-04-028 - Bundling Decision Compliance
Ordering Paragraphs 1(d) and 1(e) of the OII assert that Cingular violated § 451, §702 (which requires all public utilities to comply with Commission orders and rules) and Ordering Paragraph 1(5) of D.95-04-028 (which permits bundling of wireless service and equipment as long as "[p]roviders conform to all applicable California and federal consumer protection and below-cost pricing laws"). The OII ties the asserted violations of D.95-04-028 to allegations that Cingular violated the Song-Beverly Consumer Warranty Act, the Consumer Legal Remedies Act, the UCL and Com. Code §§ 2314-2316.
The record developed in this investigation provides insufficient evidence to support allegations by CPSD and UCAN that Cingular and its agents/dealers sold ineffective or defective wireless phones. The evidence on this issue is confined to the statements of some customer witnesses that Cingular's sales agents advised them to upgrade their handsets to get better service but that after the upgrades, service did not improve. These statements alone do not prove faulty handsets. Customers who have additional evidence may pursue equipment issues in court under applicable consumer protection statutes, if they choose to do so.
As discussed in Section 4.1 of today's decision, appellate court precedent holds that we lack jurisdiction to adjudicate the UCL or impose its penalties. We conclude, similarly, that we cannot adjudicate the Song-Beverly Consumer Warranty Act or the Consumer Legal Remedies Act or impose remedies those acts provide. Moreover, since the record fails to establish that Cingular and its agents sold faulty wireless equipment, further review of the Song-Beverly Consumer Warranty Act, the Consumer Legal Remedies Act or the UCL cannot usefully inform our assessment of Cingular's culpability for poor service or disclosure failures under §§ 451 and 2896. We may examine such issues directly under §§ 451 and 2896, and in this decision we do so. The subsections above explain why we find Cingular's imposition of an ETF from January 2000 until May 2002 to violate §§ 451 and 2896. By violating these statutes, which codify basic consumer protection principles, Cingular also has violated Ordering Paragraph 1(5) of D.95-04-028.
Finally, given the lack of evidence that Cingular and its agents sold ineffective or defective wireless equipment, we have no need to consider the implied warranty provisions in Com. Code §§ 2314-2316.
6.1.4 Other Issues
In their briefs, both CPSD and UCAN argue that Cingular has violated Bus. and Prof. Code § 17026.1(b), which requires cellular phone retailers to post signs advising that the phones may be purchased separately from service.35 CPSD and UCAN also argue that Cingular's ETF constitutes an illegal liquidated damages charge under Civ. Code § 1671. Since the OII's Ordering Paragraphs cannot reasonably be interpreted to provide notice of either allegation, we do not address these issues further. Either party could have sought to modify the OII and/or the Assigned Commissioner's scoping memo to include such charges, explaining the Commission's subject matter jurisdiction and the factual basis for the proposed amendment. Neither did so. Advancing new legal theories in briefs, after submission of the evidentiary record, is improper. Such tactics are not only unfair to defendants, because they do not provide adequate notice and an opportunity to prepare a defense, but they hinder the Commission's ability to ensure full and fair record development, which is necessary to sound decision making.
6.2 Remedies
6.2.1 Penalties
Having found Cingular in violation of law, § 2107 requires that we order a monetary penalty. The statute sets forth the parameters for maximum and minimum penalties as follows:
Any public utility which violates or fails to comply with any provision of the Constitution of this state or of this part, or which fails or neglects to comply with any part or provision of any order, decision, decree, rule, direction, demand, or requirement of the commission, in a case in which a penalty has not otherwise been provided, is subject to a penalty of not less than five hundred dollars ($500), nor more than twenty thousand dollars ($20,000) for each offense.
The monetary range mandated by § 2107 applies here, since the Public Utilities Code does not specify some other penalty for the violations we have found. Section 2108 provides, in relevant part, that "in case of a continuing violation each day's continuance thereof shall be a separate and distinct offense."
We have found that from January 1, 2000 to April 30, 2002, Cingular's official ETF policy, which prohibited returns or refunds and required an ETF, was unjust and unreasonable and thereby failed to provide adequate, just and reasonable service to customers, in violation of § 451 and D.95-04-028. We also have found that Cingular's failure to disclose known network problems to customers during 2001 constituted violations of §§ 451, 702, 2896 and D.95-04-028 and rendered its official ETF policy even more egregious. Both violations constitute continuing offenses during the relevant time periods. Considering the record as a whole, we find that the penalty for each violation should be calculated on a daily basis.
As the Commission has stated before, "The primary purpose of imposing fines is to prevent future violations by the wrongdoer and to deter others from engaging in similar violations. Fines should, therefore, be set at a level within the range permitted by § 2107 that is sufficient to achieve the objective of deterrence without being excessive in light of the offending utility's financial resources." (UCAN v Pacific Bell, supra, slip op. at p. 80.)
In determining the size of the penalty, where one is levied, the Commission has held that the size of the fine should be proportionate to the severity of the offense and has applied the criteria adopted in D.98-12-075, which issued in the Affiliate Enforcement Rulemaking. These criteria include: (1) the severity of the offense; (2) the conduct of the utility (before, during and after the offense); (3) the financial resources of the utility; (4) the totality of the circumstances related to the violation; and (5) the role of precedent.
Severity of the offense includes the physical or economic harm caused to the victims or to the integrity of the regulatory process, unlawful benefits gained by the utility, and the number of violations. The conduct of the utility includes the utility's actions to prevent the violation, detect the violation, and disclose and rectify the violation. With respect to the financial resources of the utility, the Commission considers both the need for deterrence and constitutional limitations on excessive fines. Consideration of the totality of the circumstances requires the Commission to look at the unique facts of each case, which may mitigate or exacerbate the degree of wrongdoing, in the furtherance of the public interest.
When we apply these criteria to the evidence in this proceeding, we find, first, that both violations are extremely serious. They each represent an ongoing corporate practice that failed to provide adequate, just and reasonable service to customers, both those who purchased service for personal purposes and those who purchased service for business use. Between January 2000 and April 30, 2002, this corporate practice harmed a large number of customers, inconveniencing them all, causing monetary losses for many and obliging some to deal with collection and credit rating agencies. We cannot determine the total number of customers harmed, but the evidence establishes that this number was not limited to some proportion of the 1.5 million customers Cingular added between early 2000 and the end of 2001. The evidence indicates that some number of additional customers who had established service before 2000 were also injured when they were persuaded to "upgrade" to new, fixed term contracts subject to ETFs.
Second, regarding Cingular's conduct, Cingular's briefs reiterate that it has done nothing wrong and that its network problems since 2000 constitute normal growing pains. But the evidence illustrates that during this period, Cingular's primary motivation in California, preventing churn in order to build market share, overshadowed its fundamental statutory duty to operate by just and reasonable rules in order to provide adequate, just and reasonable service. Cingular cannot show that its waiver of its own ETF, or part of that ETF, for perhaps 30,000 to 35,000 customers who happened to complain about service within the first 15 days, or its offer of service charge credits and the like to other customers, adequately redressed the harm its official ETF policy caused. As we discuss in Section 5.3 of today's decision, among other things, Cingular cannot show that this "de facto" waiver policy was communicated effectively to customer sales representatives or to customers, or was applied in a uniform, nondiscriminatory manner. Regardless, Cingular admits that it generally did not waive ETFs for customers after 15 days' time. Moreover, the sporadic waiver of Cingular's own ETF did not affect its agents' ETF, which Cingular asserts that it could not waive.
The record does not reflect what portion of Cingular's revenues from January 2000 through April 2002 is attributable to its official ETF policy, and we have no means to estimate the sum. The record does reflect that some customers paid an ETF or part of an ETF; the record also reflects that some customers decided it would cost them less to pay monthly service charges until the contract term expired. The record also reflects that for year-end 2002, Cingular reported corporate revenues of $14,746,000,000. Nationwide, Cingular had approximately 22 million customers at that time. Thus, the nearly three million in California represented about 14% of Cingular's customer base, and most likely were the source of about 14% of its revenues.
Regarding the remaining criteria for assessing penalties (financial resources, totality of the circumstances, and precedent), several recent Commission decisions that impose a sizeable penalty on a major telecommunications utility are instructive. In re Qwest Communications imposes a fine of $20,340,000 for 8,362 separately established slamming and cramming offenses perpetrated on utility customers ($5000 for each slamming offense and $500 for each cramming offense). (D.02-10-059, rehrg denied D.03-01-087.) In another proceeding, a consolidation of In re Pacific Bell, Pacific Bell Internet Services and SBC Advanced Solutions (I.02-01-024) with a complaint against Pacific Bell (C.02-01-007), the Commission adopted the parties' proposed settlement, which included a penalty of $27 million for an estimated 30,000 to 70,000 offenses related to DSL billing and reporting errors. The Commission noted, "if Respondents were penalized $500 for each offense, the total penalty would equate to 54,000 offenses, well within the range indicated." (D.02-10-073, slip op. at p. 15.)
UCAN v. Pacific Bell, the marketing abuse decision referenced supra, closely mirrors this proceeding in that it finds two continuing violations based upon an ongoing corporate practice over about two years, rather than specifically enumerated offenses. The rehearing decision, which reduces the total penalty by shortening the applicable period but does not alter the daily fine, orders a penalty of $15,225,000, calculated at $17,500 per day for each offense, for a total of $35,000 per day. (D02-02-027, slip op. at p. 15.) The Commission determined that Pacific Bell's unlawful conduct was particularly egregious because it concerned the marketing of basic telephone services to captive residential customers, including immigrant and low income Lifeline customers and because the conduct closely resembled marketing improprieties for which the Commission had fined Pacific Bell $16,500,000 in 1986.36
UCAN v. Pacific Bell provides a very useful precedent. Considering Cingular's somewhat lower California revenues and the fact that, unlike UCAN v. Pacific Bell, we are not presented with a history of prior violations, we conclude that a somewhat lower daily penalty is appropriate under the facts established in this proceeding. We find that a total penalty of $12,140,000 is warranted considering the totality of the circumstances, which we relate in Section 5 of today's decision. We calculate the penalty as follows:
· For the period January 1, 2000 to April 30, 2002 (849 days), $10,000 per day, or $8,490,000.
· For the period January 1, 2001 to December 31, 2001 (365 days), an additional $10,000 per day, or $3,650,000.
Cingular shall pay this penalty, $12,140,000, to the State of California General Fund within 45 days after the date this decision is mailed to the service list. Proof of payment shall be filed and served on the service list and shall be provided to the Executive Director within five days of payment.
6.2.2 Reparations
Considering the passage of time and the complicated facts, we cannot fashion additional remedies to both identify and make whole all customers who would have cancelled Cingular's service within 15 days if such an option had been disclosed to them at the time they contracted for service. However, we can devise measures to limit Cingular's unjust enrichment from the partial or full ETF payments it received for contract cancellations prior to May 1, 2002, the effective date of its present policy. Cingular shall return, with interest, any sums received for early contract cancellation between January 1, 2000 and April 30, 2002, to the customers who paid those sums. Cingular shall also review ETF receipts for contract cancellations beginning May 1, 2002, and shall determine if any sums were paid for contract cancellations from day 1 through day 15 of the contract period. If so, such sums shall be reimbursed, with interest, to the customers who paid them. Likewise, since Cingular is responsible for its agents' ETF collections, is shall also reimburse customers for ETF payments to agents prior to May 1, 2002 and for any improper ETF collections after May 1, 2002.
We direct Cingular, within 75 days of the mailing of this decision, to file a refund plan for accomplishing these customer reparations, to serve this compliance filing on the service list, and to provide a copy to the Director of the Commission's Telecommunications Division so that the Division may monitor implementation of the plan. Cingular shall undertake in good faith to locate all persons entitled to reparations. The refund plan shall include the methodology for locating such customers (for example, use of an independent claims administrator or an internet-based locator service) and an estimate of the amount of reparations due. Any unpaid reparations shall escheat to the State of California General Fund.
6.2.3 Useful Service Disclosures
In Section 5.2 of today's decision, we describe the rate area maps that Cingular includes in its stores, marketing brochures and other advertising. These maps provide little useful information to customers-and no information about the relative likelihood of outdoor, in-vehicle and in-building coverage. The record reveals that Cingular (like all wireless carriers) has detailed engineering information that can predict, typically with 95% accuracy, the likelihood that these services will be available. Cingular collects some of the data itself but also uses other entities, such as drive test companies, to collect and verify data.
Cingular's engineering maps, such as Attachments 4 through 13 of Ex. 17, generally show cell locations, use color-codes to depict predicted coverage and include a legend that specifies the radio frequency sensitivities of each color-code. Cingular also has extensive data on other service issues, like the frequency of dropped calls. The record of this proceeding demonstrates that wireless providers such as Cingular know much more about the coverage and capacity of their own networks-and about the networks of their competitors-than they care to share with the public.
In fact, a customer has no ready means to obtain accurate, detailed coverage and capacity information. Information of this kind is unavailable to customers at the point of sale, either directly or through sales agents. Our review of the record in this proceeding persuades us that customers should have access to more information than they can obtain at present. While the existence of a trial service period provides a necessary and basic element of consumer protection, the trial is not free if a dissatisfied customer incurs various fixed charges or penalties. A trial does not protect customers from the out-of-pocket expenses of associated activation fees, for example.37 If customers had better information, they could better assess whether to risk the trial.
CPSD and UCAN argue that the Commission should order Cingular to make its engineering maps available to customers over the Internet. Cingular contends that such a requirement would be unfair and would cause it competitive harm, since no other wireless carriers must disclose their engineering maps. Cingular also contends that the maps would be difficult for many customers to interpret and would require detailed, complex disclaimers. However, the back-of-the-envelope estimate prepared by Cingular's witness Cruz suggests it could take a relatively modest $1,510,000 to develop and maintain a software system to create and constantly update the maps for all six Cingular regions. Cruz said this estimate, which represents a company-wide, national cost, is inadequate for budgeting purposes, since among other things, third-party software license fees could be much higher than the $300,000 he factored into his calculation. Cruz's estimate anticipates a six-month lead-time to develop the software system.
This record does not supply a comprehensive assessment of the range of methods for disseminating useful coverage and capacity information, the comparative utility costs and the associated timelines. There is no analysis, in additions, of whether disseminating engineering maps poses increased security risks. There is no consideration of whether maps-color-coded to show likely outdoor, in-vehicle and in-building coverage but without specific radio frequency disclosures or cell site location demarcations-could be produced to satisfy consumers' informational needs without jeopardizing utilities' competitive concerns. There also is no discussion of whether UCAN's proposal to establish a 1-800 number for customer coverage information would provide a more inexpensive and user-friendly alternative.
Having found certain of Cingular's rules and practices to be inadequate, § 761 authorizes us to prescribe new rules and practices to replace those we have rejected. However, a generic rulemaking, R.02-12-004, the Telecommunications Service Quality Rulemaking, presently is examining service quality standards for all telecommunications carriers, including wireless providers. Therefore, we will defer resolution of the prospective standards for customer notification of coverage and capacity to that pending proceeding. We anticipate a solution applicable to all wireless providers, which will provide consumers with the information they need to make an informed choice among those providers.38
6.2.4 Other Remedies
Likewise, we have no need to duplicate the scope of Commission decision making in R.00-02-004, the Consumer Bill of Rights and Consumer Protection Rules proceeding, which is examining a number of consumer protection requirements for application to all telecommunications providers, including wireless providers. Taken as a whole, the evidence in this proceeding underscores the particular need for several of these rules.
For example, Draft Rule 2, entitled "Marketing Practices," would prohibit the use of very fine print to communicate key rates or other important terms and conditions in advertising and marketing solicitations aimed at consumers. This Draft Rule, if adopted, should minimize customer confusion attributable to widespread use of fine print disclosures, such as those found in newspaper ads and brochures introduced in evidence in this proceeding.
Draft Rule 3, entitled "Service Initiation and Changes," would mandate a minimum 30-day period for contract cancellation (45 days, if contract confirmation materials are not provided in person at the point of sale). This Draft Rule, if adopted, would provide wireless customers with a reasonable trial period and avoid the inequities that many Cingular customers experienced for lack of a fair opportunity to test whether Cingular's service met their needs. Evidence in this record suggests that a 15-day return/refund policy, such as Cingular's present policy, in many cases does not provide sufficient time for consumers to reasonably test a provider's service.
- In fact, the preponderance of the evidence indicates that Cingular's network problems began to increase in 2000, concurrent with the rise that year in customer complaints. The OII relates that the Commission's Legal Division and CPSD jointly sent Cingular a cease and desist letter on September 28, 2001, approximately ten months before this OII issued, which asserted receipt of a large number of informal complaints against Cingular in 2000. As we note above, the declarations and sworn testimony from the 49 customer witnesses, who as a group are the source of the most credible individual complaints against Cingular, include 16 complaints in 2000 and 20 in 2001, but only one in 1999. Nine of the complaints allege problems in 2002, six of them in June and thereafter.
(b) In each retail location, all retailers of cellular telephones shall post a large conspicuous sign, in lettering no smaller than 36-point type, that states the following: "Activation of any cellular telephone is not required and the advertised price of any cellular telephone is not contingent upon activation, acceptance, or denial of cellular service by any cellular provider."
- The sign shall be prominently displayed and visible to consumers and located in that area in each retail location where cellular telephones are displayed and purchased.
