Industry Advocate Rachelle Chong: Deny Confirmation

TURN is urging senators to reject the nomination of Rachelle Chong to the CPUC because she acts against public interest, rejects public input and broke commitments made to the Senate Rules Committee.

The Commission has no further duty to ensure rates are “just and reasonable” because competition and the marketplace will do that for us. ~Rachelle Chong

Since her appointment as CPUC (California Public Utilities Commission) Commissioner in January 2006, Rachelle Chong has sided with powerful telecommunications companies against the public interest by leading the dismantling of regulations protecting customers from rate hikes, price-gouging, deceptive marketing, early termination fees, confusing contracts, and unfair billing practices.

Ms. Chong subscribes to the same free market ideology that led to the current global financial crisis. Applied to her role as CPUC Commissioner, it means that prices for services such as directory assistance, call waiting, and unlisted numbers have increased by 30%-400%. California ratepayers are paying billions of dollars more, and getting less customer service and enjoying fewer consumer rights.

Therefore, TURN is urging the California State Senate to reject the confirmation of Rachelle Chong for another term as CPUC Commissioner. Rather than permit her to intensify her deregulation agenda from this position, the Senate must insist that the governor bring balance to the Commission by appointing a consumer champion who pledges to fulfill the CPUC mission to “serve the public interest by protecting consumers and ensuring the provision of safe, reliable utility service at reasonable rates.”

Commissioner Chong Deregulated the Telecommunications Industry, exposing consumers to skyrocketing prices, unfair billing practices, and discriminatory pricing.

  • Commissioner Chong sponsored the decision that triggered wholesale deregulation of most prices for the telecommunications industry. As a result, prices for an array of telephone features have increased by 30% to 400% for consumers during the past 24 months.
  • Commissioner Chong sponsored the decision that effectively eliminated any carrier reporting and CPUC monitoring of the impacts of the new deregulatory regime on prices, universal service (affordability and availability) and the status of competition in the marketplace. As a result, the CPUC compromised its ability to monitor customer complaints, deceptive marketing practices targeting non-English speakers, or unfair billing practices.
  • Commissioner Chong sponsored the decision that removed price deregulation of basic phone service starting in 2011, authorizing increases up to 30% in 2009, and another increase of 30% in 2010. AT&T, which controls 70% of California landlines, is permitted to increase its monthly basic service bills of $10.94 by $3.25 in 2009 and another $3.25 in 2010, with no limits to increases starting in 2011.
  • Commissioner Chong sponsored the decision that permits increases in LifeLine services for low-income customers of $0.81 monthly, without conducting an affordability study to assess the impact of price increases. LifeLine customers were hit with monthly increases of up to 12% starting January 1, 2009 with no guarantee that LifeLine will remain affordable after 2011.
  • Commissioner Chong sponsored a decision permitting Geographic Deaveraging, reversing a system that spread the costs of providing basic phone service evenly across the state. Customers in rural areas are vulnerable to significant increases in monthly bills to reflect the high cost of providing service in hard-to-reach areas.

Commisisoner Chong Refused to Solicit Public Input, resulting in higher costs and fewer consumer protections.

  • Commisioner Chong refused appeals from consumer groups involved in the Limited English Proficiency (LEP) docket to require telephone companies to distribute in-language contracts and sales materials to customers at point-of-sale. Instead of giving customers options, Commissioner Chong made sure phone companies had a menu of options for complying with in-language rules. Despite acknowledging complaints from LEP customers, Comissioner Chong refused to require telephone companies to track complaints, report fraud, or increase consumer education and protection.
  • Commissioner Chong refused repeated requests to convene Public Participation Hearings or solicit public input prior to issuing a ruling deregulating prices for Basic Phone Service. Requests for public input&mash;including legal filings, petitions signed by hundreds of consumers, letters sent bu community based organizations, and testimony at CPUC meetings by dozens of customers—fell on deaf ears.
  • Commissioner Chong Refused requests for additional opportunities for public input on major changes to the LifeLine program for low-income customers.
  • Commissioner Chong refused requests to conduct an Affordability Study prior to issuing a ruling that approved rate increases for Basic Phone Service and LifeLine. After intense pressure by TURN and the CPUC’s Division of Ratepayer Advocates, Commissioner Chong agreed to a limited Affordability Study, but only after rate increases went into effect. Commissioner Chong is on record stating that fundamental changes to the LifeLine program can move forward with no assessment of the impacts on consumers’ ability to afford the service.

Commissioner Chong Broke Promises to the Legislature, failing to keep her commitment to protect consumers and stop telecom marketing abuses.

  • Commissioner Chong failed to keep her written commitment made to the Senate pro tem during her confirmation hearing in January 2007, to move swiftly to suspend the elimination of AT&T disclosures of marketing abuses. As a result, AT&T was permitted to continue its abusive sales and marketing practices free from CPUC monitoring and oversight for a year and a half.
  • Commissioner Chong reneged on her written commitment to ensure that service contracts would be “in-language” by supporting the decision that failed to require that telecommunications contracts be written in the same language as sales and marketing materials. As a result, non-English speaking customers who sign up for services based on marketing materials in a language other than English have no right to receive a contract in that same language.