Consumer Groups: CPUC Should Disregard Legal Threats When Considering Service-Quality Proposal

Consumer advocates said the California Public Utilities Commission should move ahead with service quality rule changes that the telecom industry says would be illegal. “The Commission has the authority and supporting precedent to impose meaningful enforcement mechanisms for its customer protection and service quality rules,” The Utility Reform Network (TURN) and Center for Accessible Technology (CforAT) said in reply comments the CPUC received Tuesday. However, telecom industry commenters said a CPUC staff proposal and consumer groups' proposed additions aren’t supported by facts, the law or policy reasons.

The CPUC is considering changing its 2016 enforcement framework under General Order 133-D, which includes a mechanism that lets carriers avoid penalties when they promise to invest twice the fine's amount. Criticizing that method, staff proposed different thresholds for assessing service quality violations, more stringent standards and automatic customer credits, among other changes (see 2406280032). However, Verizon and other telecom companies earlier this month raised the specter of litigation should the CPUC move forward (see 2409040030). Meanwhile, consumer groups in docket R.22-03-016 asked that the commission tighten requirements.

TURN and CforAT urged the CPUC to reject industry’s arguments that the commission lacks jurisdiction to impose standards on VoIP and that wireless and "competition is sufficient to ensure reasonable installation times, reduced outage durations [and] responsiveness to customer needs.” Industry's “lengthy and repetitive arguments” on CPUC jurisdiction “simply distract from meaningful discussion of the same providers’ failure to deliver reasonable service quality and the steps the Commission should take to remedy those failures.”

The telecom industry continues to: "deny the existence of systemic service quality issues, threaten to pass on compliance costs to consumers, and argue against the removal of exemptions for non-emergency issues outside of their control,” the CPUC’s independent Public Advocates Office (PAO) responded: Those and other industry arguments "contradict the evidence ... and should be disregarded.”

But there’s a legal problem, replied AT&T. "Even if the Staff Proposal or its supporters could establish the factual support for these recommendations, which they have not, federal law bars the Commission from regulating the quality of wireless and VoIP services.”

The consumer groups disagreed. Industry "makes several incorrect claims" about CPUC authority to regulate VoIP and wireless service quality, said PAO. "Many of these arguments are outdated, as the industry purposefully misrepresents the latest changes in the law." For one thing, the U.S. Constitution's 10th Amendment gives states police power to protect public safety, the office said. As for regulating wireless, the preemptive language of Section 332 of the Communications Act “is limited to regulations that directly and explicitly control rates, prevent market entry, or require a determination of the reasonableness of rates.” The CPUC "retains the clear authority to regulate 'the other terms and conditions of commercial mobile services,'” said PAO, quoting Section 332. Meanwhile, regulating VoIP as a Title I information service isn't “expressly preempted,” it added.

TURN and CforAT had a different take on VoIP classification but arrived at the same conclusion: California isn’t preempted. “Providers have not identified a federal law that governs all terms and conditions for VoIP service,” they argued. “While the FCC has used direct and ancillary authority to enact select regulatory requirements on VoIP service, it has steadfastly avoided classifying VoIP service under Title I or Title II of the Communications Act (and thus imposing a specific regulatory structure on VoIP service) despite repeated opportunities to do so.” Such "ad hoc regulation" can't be used to preempt states, they said.

Small Business Utility Advocates disagreed with the claim that competition makes extending service quality standards to VoIP unnecessary. “Relying on competition alone has consistently failed [environmental social justice] communities," wrote SBUA. “Service providers have been systematically disinvesting in, providing deteriorating service quality, and offering fewer alternatives to low-income communities and Black, Indigenous, and other communities of color.”

Is VoIP Too Hard to Regulate?

Supporters of the staff proposal "fail to recognize the technical complexities of providing VoIP that would cause the proposed VoIP Rules to be unmanageable,” argued VoIP providers Shastabeam and Velocity Communications in a joint reply. Sonic Telecom and the Voice on the Net Coalition made similar arguments in their replies.

"A typical VoIP call may include local loop facilities, protocol conversion gateways, switches, backbone facilities, wireless frequency and/or facilities, cell phone tower facilities, etc.,” said Shastabeam and Velocity. “The split in responsibilities for various aspects of service quality between or among multiple providers makes the imposition of service quality standards impossibly complex to identify the source of a service quality problem and infeasible to implement or oversee.”

Many of the requirements would inappropriately modify private contracts between VoIP providers, the VoIP companies added. For example, a proposal that requires "a wholesale provider to offer customer credits for service quality issues would constitute a substantive modification to private contracts because it is virtually certain that the parties’ existing agreement would not include such provision.”

Other telecom industry players condemned consumer group recommendations that expanded on the staff proposal. The advocates “proposed rules that are even more unreasonable than Staff’s proposed metrics,” said Verizon.

The telecom industry's opening comments "overwhelmingly show the lack of factual, legal or policy basis to justify the radical revisions to G.O. 133-D in the Staff Proposal,” said Frontier Communications: Consumer groups likewise fail to support the "even more radical revisions" that they propose.

Consumer advocates' “proposals are unrealistic and infeasible in many respects and would significantly increase the exorbitant and unrecoverable costs and burdens that the Staff Proposal would impose on the Small LECs’ small, rural operations,” said a coalition of rural providers.