Group Calls on Speaker Nuñez to Fix Video Franchise Law After PUC Rejects Oversight Role, Consumer Protections

Santa Monica, CA — In a perfunctory vote Thursday, the state Public Utilities Commission rejected the protests of California cities and consumer groups, deciding against any direct oversight of the state’s new statewide video-service franchises for phone and cable companies. The Foundation for Taxpayer and Consumer Rights called on Assembly Speaker Fabian Nuñez to amend the law to provide the nondiscrimination and other protections that he said would be guaranteed.

During debate over the deregulation last year, Speaker Nuñez told the San Francisco Chronicle, "The driving concept behind getting this thing done… is the consumer has the very best deal possible." Yet the PUC now states that it has no power over the franchise applications except determining whether they are "complete," said FTCR. That means commissioners refuse even to determine upfront if the application may result in technological discrimination against low-income and minority neighborhoods as new broadband infrastructure is installed.

The commissioners also decided that, unlike in all other proceedings before the PUC, consumer advocates have no right to intervene on behalf of video and broadband customers. Protests of franchising applications are not even allowed.

"This is a rubber stamp of whatever AT&T and Verizon wish to do, including exclude low income communities from service," said Jamie Court, president of FTCR. "Under these rules the only reason an application for franchise will be denied is if a form is not complete. Consumers will have no leverage over these companies, who are not even delivering the technology they promised the Legislature in exchange for the undoing of 500 local franchises."

The PUC‘s interpretation of the law is exactly that of AT&T, Verizon and cable companies, said FTCR, sweeping aside the legal arguments of consumer advocates and the cities, who have lost all their former clout in controlling the misdeeds of cable companies. PUC chief Michael Peevey even specifically warned cities not to delay issuing permits for AT&T and Verizon to tear up streets and install large utility boxes in neighborhoods.

Nuñez sponsored the bill last year at the behest of AT&T. AT&T and Verizon together spent at least $24 million lobbying for the measure, known as the Digital Infrastructure and Video Competition Act.

"The commissioners have embraced the phone companies’ arguments that the PUC is a powerless functionary, not a regulatory body," said Judy Dugan, research director of FTCR. "Nuñez and the Legislature owe Californians a law that restores some balance between corporate freedom and protection of customers’ rights."

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The Foundation for Taxpayer and Consumer Rights (FTCR) is the state’s leading consumer watchdog group. For more information, visit us on the web at: http://www.ConsumerWatchdog.org.