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Press
Release Contact:
October 30, 2000
Janee Briesemeister
(512) 477-4431 ext. 117
Consumers
Union's Southwest Regional Office
AUSTIN, TX -- At its meeting on Wednesday, the
Public Utility Commission will vote on the adoption of long-awaited
rules implementing SB 86, a new law intended to provide increased
consumer protections in a competitive telephone market.
On the heels of adopting a separate rule that
permits telephone companies to hide the amount of fees and surcharges
included in customer bills, the PUC is set to vote to adopt rules
which will increase the risk to consumers who venture into the
competitive market for telephone service.
Consumers Union's reading of the PUC analysis
is that the agency has opted to reduce the current level of consumer
protections applicable to the new competitors in order to reduce a
so-called "burden" on telephone companies. "Thus far consumers'
experience with telephone deregulation has been one frustration after
another," said Janee Briesemeister, a CU senior policy analyst.
"Under these rules, the situation will get worse rather than
better."
If adopted, consumers shopping for new utility
services will have to compare more than prices, services and a
company's reputation. They will also need to check a company's
policies on items such as penalties for cancellation of service, late
payment charges, refunds of deposits, and standards for declining to
serve a potential customer. Spanish-speaking customers will
specifically have to request key information on rates and services to
be provided in Spanish, even after the service has been marketed to
them entirely in Spanish.
"The proposed rules are shortsighted and unfair
because they create a dual regulatory system of protections that will
stifle competition," Briesemeister noted. "On the one hand, current
customer protections would be left in place for the former monopoly
utilities like Southwestern Bell, and Verizon (formerly GTE). On the
other, new competitors entering the market would be required only to
disclose their policies to consumers, through a contract or terms of
service statement. The added confusion will discourage consumers from
making a change even if it is in their best interest."
"The PUC has succumbed to the industry argument
that customer protection rules amount to a "burden" and will hurt
their ability to compete," she added. "Not true. Good rules that
equally protect all consumers, regardless of whether they choose a
new company or stick with their current provider, will encourage
consumers to seek out the best prices and services. If applied
universally, good customer protection rules will encourage
competition by giving consumers who are often reluctant to venture
into a new market some level of assurance that new companies will
treat them fairly.
These rules are meant to implement SB 86 which
gave the PUC authority to protect electric and telecommunications
customers against fraud and abuses in the marketplace.
"We believe the rules thwart the intent and the
letter of SB 86 by reducing, rather than maintaining, consumer
protections for telephone service," Briesemeister said.
For a copy of the proposed rules, its highlights and lowlights, and an example of a consumer complaint that would not be addressed by these rules, please call Janee Briesemeister at 512-477-4431, ext. 117.
Consumers Union, publisher of Consumer Reports, is an independent, nonprofit testing and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health nutrition, and other consumer concerns. Since 1936, our mission has been to test products, inform the public, and protect consumers.
