Letter From Our ED—July 2005

TURN celebrates turning 30-something with a party and by continuing to fight for ration energy and telecommunications policy.

What a year 2005 is shaping up to be!

On the phone side, California is seeing the purported “competitors” of SBC and Verizon becoming the latest victims of the “Baby Bells'” insatiable appetite. SBC’s wireless affiliate Cingular had barely finished swallowing AT&T Wireless late in 2004 when SBC announced plans to finish the meal by consuming all that was left of AT&T. Not to be outdone, Verizon engaged in a highly public bidding war to win the right to absorb MCI. In today’s political environment, it’s unlikely that the phone giants will have too much trouble gaining federal and state approvals of the merger. So as early as the end of 2005 we’re likely to see two more major competitors disappear from the phone industry, and SBC and Verizon licking their chops as they survey the horizon for their next takeover victims.

One might think that such consolidation would dishearten the cheerleaders for further phone deregulation, given the clear signal that whatever competition existed is now on the decline. One would be wrong, instead, we’re seeing a new push for further deregulation, in the name of achieving a “uniform regulatory framework.” Traditional phones now supposedly “compete” with cell phones (even though the biggest providers in both markets are the same three or four companies), with phone services from the cable company (replacing one monopoly with another), and with various internet-based technologies (requiring a computer and broadband service, which has not reached some communities and is beyond the budget of many households). After the next round of consolidation, SBC will cite kids using cans and string as the competition warranting further deregulation! The bottom line is clear. We are at serious risk of having an unregulated monopoly or, nearly as bad, two or three unregulated service providers for this essential service.

On the energy side, it is getting to be clear that California’s best hope for getting a rational energy policy in place is to get California’s voters directly involved in the effort. Last year the Legislature passed AB 2006, which would have replaced the current patchwork electricity policy with a straightforward plan that relies on energy efficiency, reduced demand and renewable resources whenever practicable. Governor Schwarzenegger vetoed the bill, in part because it did not embrace his pet project, a revival of deregulation for the electricity market. AB 2006 did not preclude such a revival, but that wasn’t enough for the Governor.

So TURN has turned to the initiative process. While we have misgivings about how the process is currently used in California, we think our proposed measure is just what reformers like Hiram Johnson had in mind in the 1930s, the state’s elected and appointed officials have failed to act on these issues, so we’re putting it directly in the hands of the voters. The Electric Consumers Protection Initiative (Proposition 80) will be one of a small handful of initiatives on the November ballot that comes from the people, rather than the politicians.

The initiative goes further than AB 2006 did in putting a stop to further deregulation. In light of the billions of dollars that it cost the state, and the ongoing disruption to our ability to implement and pursue a rational, long-term energy policy that will keep costs AND environmental impacts as low as possible, there’s an easy answer to those who want more deregulation in this critical area: NEVER AGAIN!

On a happier note, our “TURN Turns 30-Something” event in late April was a resounding success! Nearly 200 guests joined us for an evening celebrating TURN’s past, present and future. We honored Senator Debra Bowen with TURN’s Legislative Award, and presented the Charlie Ross Press Award to KRON (San Francisco’s local TV station) for its ongoing news coverage of consumer issues. Thanks to all of you who contributed to support this event, and to honor TURN’s 30-something track record on behalf of California consumers. Here’s looking forward to the next thirty years!

Sincerely,

Executive Director
Bob Finkelstein