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CONTACT: Patrick Ross
August 14, 2003
(202) 289-8928
California Wireless Regulations Questioned
New Rubin Study Included in Official Comments to PUC

WASHINGTON D.C. - Plaintiff and class action lawyers - not consumers - would be the ultimate beneficiaries of new wireless phone regulations being pushed by government regulators in California.  That is one of the findings of a new study by former Federal Trade Commission and Consumer Product Safety Commission official Paul Rubin into the so-called "Consumer Bill of Rights."  In his detailed analysis of the recent Public Utilities Commission proposal -- the substance of official comments filed with the PUC today -- Rubin concludes the regulations are unnecessary and would be costly to consumers.  He says they would "actually reduce the rights of consumers" by mandating contents of calling plans, despite consumers' wishes.

"The proposed Consumer Bill of Rights amounts to a mandatory price increase on California wireless phone consumers," writes Rubin in a paper released today by The Progress & Freedom Foundation.  "The regulations will be costly and unnecessary." Rubin is currently the Samuel Candler Dobbs Professor of Economics and Law at Emory University and a senior fellow at the Foundation.

"These 'rights' are ill-defined and open ended," writes Rubin.  "There is thus real danger that a bill of rights and the associated rules will lead to additional litigation as plaintiff's attorneys and class action attorneys may find it worthwhile to bring lawsuits based on 'violations' of an open-ended and vague set of 'rights.'"  Because litigation is costly and time-consuming, he says consumers will be harmed.  According to Rubin, there are only a trivial number of complaints [against wireless providers], and these seem to be resolved with current rules."

While the newest set of draft regulations released on July 24 is an improvement over the earlier proposal, Rubin says that, in such a highly competitive state as California, new 'protections' are unnecessary and "would increase the price paid by consumers or reduce service, or both."  Among the unintended consequences, according to the Rubin study: less information offered in the marketplace, reduced rates of technological advancement, less entry into the market and increased litigation.

Foundation experts filed official comments on the previous set of regulations in April.

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