Red tape cut in PUC move
Technology Op-Ed
2.14.2005
San Francisco Examiner, February 14, 2005
Recently the California Public Utilities Commission delayed the so-called "consumer bill of rights," a courageous move that will benefit all Californians if the decision is made permanent. That's right, a bunch of regulators actually said that the telecommunications industry did not need any more regulation and rejected the bureaucratization of cell phone service. Indeed, the sector is already highly controlled, and the rules the PUC suspended would have added red tape without any benefit for consumers. The consumer bill of rights should have been called the consumer bill of frights, because its aim is to standardize service among telecom providers, wiping out important competition that pushes companies to outdo each other. Under the rules, cellular and other telecom providers would have had to comply with nitpicky mandates such as printing consumer bills in 10-point font. That's the kind of micromanagement Californians don't need or want because it is expensive and they wind up paying for it. According to analysis by Debra Aron of Northwestern University, if the rules go into effect, consumers could be paying an extra $5 a month on their bills, the California economy could lose $2.3 billion in growth, and more than 12,000 jobs could be lost. Aron's analysis was based on an earlier version of the bill, but even if the numbers aren't exact, the losses would still be massive. At a time when jobs and innovation are of utmost importance to Californians, it's good to see the PUC is doing its part to try to restore shine to the Golden State. But not everyone sees it that way. Some groups and individuals are locked into the worn-out notion that government must dictate the rules. "The PUC and phone companies have placed consumers on hold," said Joe Rideout of Consumer Action. But at least one cell company, US Cellular, announced it would leave the state if the regulations remained in place, and other companies would have continued with litigation. For too long, the telecommunications sector has been mired in lawsuits, harming everyone but the high-paid lawyers who argue the cases. Fortunately, Gov. Arnold Schwarzenegger and his team understand the economic consequences of unnecessary regulations and litigation. A few months ago, the governor warned that the new telecom rules would only serve to "impede growth in the highly competitive wireless industry." He's right, and it's encouraging to see his new appointees to the PUC seem to share that view. But not all policymakers are supportive of innovation in California's important tech sector. State Sen. Debra Bowen said she's considering introducing the bill of rights in the Legislature. But it is to be hoped that if the bill were introduced there, the truth would come out loud and clear. Lester Wong, advisor to PUC President Michael Peevey, made a good point recently when he said, "If you have rules that cost business a lot of money but don't really provide real protections to the consumer, that's not really being consumer-friendly."
That's what would have happened under this scheme, with special-interest groups trying to impose the old command-and-control regulatory system. The time has come for a regulatory revolution in telecommunications that will truly benefit everyone.
Clear thinking and honest analysis was the basis of the PUC's recent decision, a step in the right direction. Now the commission should stick to principle and do what's right for Californians by making the decision permanent. Sonia Arrison is Director of Technology Studies at the Pacific Research Institute. She can be reached at sarrison@pacificresearch.org.
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