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CONTACT: Patrick Ross
July 24, 2003
(202) 289-8928
Wireless "Bill of Rights"
Still Wrongs Consumers

Former PUC Chair and Emory Economist Question Regulations

WASHINGTON D.C. - The California Public Utilities Commission's updated wireless consumers' 'bill of rights' announced today by PUC Commissioner Carl Wood is well intentioned but potentially harmful to consumer interests in the competitive California marketplace. Despite efforts to improve the measure, it is still overly regulatory, like its predecessor. That is the view of two national experts, former Colorado PUC chairman Raymond L. Gifford and Emory University professor of law and economics Paul H. Rubin, both of The Progress & Freedom Foundation.

"It makes no sense to burden the intensely competitive California wireless marketplace with heavy regulation," says Gifford, who left the Colorado PUC earlier this year to become president of the Foundation. "The California PUC should think yet again before taking action that will almost certainly harm consumers. The path California regulators are on still leads directly to higher prices and fewer choices than would exist otherwise." The Foundation filed official comments with the California PUC in April.

"This proposal is not much better," says Rubin, a Foundation senior fellow, who released a study on the California regulations earlier in the year. "No justification is presented as to why a competitive industry needs any rules at all. This is especially true since new federal rules regarding portability are designed to increase competitiveness. The rules will increase costs to consumers and there is no reason to expect that the benefits are worth the increased costs."

"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," Rubin wrote in the study. "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." He maintains the California market is "highly competitive," with 158 registered wireless carriers [at the time of the study]- 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."

Rubin, a former FTC and Consumer Product Safety Commission official, said only "three to four consumers per million per month found it worth filing a complaint of any sort."

The Progress & Freedom Foundation is a market-oriented think tank that studies the digital revolution and its implications for public policy. It is a 501(c)(3) research & educational organization.



The Progress & Freedom Foundation