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News Release
April 8, 2003
CONTACT: David Fish
(202) 289-8928

California Wireless Regs Bad for Consumers
Foundation Files Comments w/ Golden State Utilities Commission

WASHINGTON, D.C. - A proposal by the California Public Utilities Commission to impose significant regulations on the state's highly competitive wireless telephone industry is unnecessary and would harm consumers. That is the crux of a new regulatory filing with the state agency based on an in-depth study by Emory University Professor of Economics and Law and Progress & Freedom Foundation Senior Fellow Paul H. Rubin.

Written by Kent Lassman, a Foundation research fellow and director of its Digital Policy Network, the filing says the proposed wireless regulations “would reduce the rights of consumers, increase the costs and prices of service and limit technological innovation and the amount of information available to consumers.”

In his study, Rubin, a former Federal Trade Commission and Consumer Product Safety Commission official, found “no evidence” the market is “not operating well”. He said the wireless industry is already regulated under state consumer protection and anti-deception laws and other regulations applicable to all industries. Citing recent figures used by advocates, he maintained only “three to four consumers per million per month found it worth filing a complaint of any sort.”

“Since the wireless industry in California is competitive, any new regulation will increase prices and reduce the level of services available to consumers,” Rubin wrote. “Regulation will also have unintended consequences: less, not more, information offered in the marketplace, reduced rates of innovation, less entry and competition, and increased litigation. Although the proposed regulations are labeled a consumers ‘bill of rights,’ they actually will reduce the rights of consumers to contract for plans that they desire.”

Rubin maintains the California market is “highly competitive,” with 158 registered wireless carriers – six to eight in any given market. “Carriers compete in this market by offering a large number of plans and options,” he wrote. “Carriers could also compete by offering provisions covered by the proposed rules. The fact they do not indicates that consumers do not find these provisions worth the cost.”

The Progress & Freedom Foundation is a market-oriented think tank that studies the impact of the digital revolution and its implications for public policy. The Foundation is a 501(c)(3) nonprofit organization founded in 1993.



The Progress & Freedom Foundation