Update 6-7-2007: this bill was voted down 17-20 on the Senate Floor.

Can the "Cell Phone Subscriber Consumer Protection Bill," recently passed 5-3 in the California Senate Energy, Utilities and Communications Committee, finally provide basic cell phone consumer protections?

At the very least, it's clear that the California Legislature is the only venue to obtain these protections. Indeed, the California Public Utilities Commission(CPUC) foolishly claimed last August that there was sufficient competition to justify massive deregulation of the telecommunications industry in California. With cell phone complaints topping the list of consumer complaints in 2006 to organizations like the Better Business Bureau and UCAN, this purported "competition" has failed to improve quality of service. UCAN has pushed basic, economically rational consumer protections on cell phone service for years, and took part in the process of crafting the "Telecommunications Consumer Bill of Rights" which was unfortunately revoked by the Schwarzenegger CPUC in 2005.

A new opportunity and incarnation of the "Telecommunications Consumer Bill of Rights" is SB 831, the "Cell Phone Subscriber Consumer Protection Bill."

"Cell phone companies are merging, competition is decreasing, customer service is deteriorating, and yet California cell phone subscribers have little or no protection against industry abuses," said State Senator Alan Lowenthal (D- Long Beach). "SB 831 would establish a minimum standard of protections that every cell phone subscriber needs and deserves."

Indeed. Here's the short list of consumer protections in SB 831. Hopefully public outcry can make this bill a reality.

• Standardized Trial Period - The Right to Cancel Cell Phone Contract Without Early Termination Fees

Simple. You would have a trial period of either 30 days or 10 days after your first bill, whichever is longer. Most carriers currently have at least a 14 day trial period, and some even allow 30 days. However, this provision would be particularly effective in countering some of the shadiest members of the cell phone world, the 3rd party resellers such as those kiosks you see in your local mall. These third parties often lure consumers into unnecessary additional contract terms, including eliminating trial periods, requiring 180 days of service, and separate early termination fees up to $400 per phone. Cell phone companies allow these third parties to plaster company logos all over their stores and kiosks, passively condoning the ridiculously aggressive sales tactics that often trap consumers and pick their pocket rather than provide them a service. So this provision would reduce contract inconsistency and consumer confusion purposefully imposed by the carriers.

• Pro-Rates Early Termination Fees

Yes, the fact that whether a consumer cancels in month 2 or month 23 of a two-year contract and receives the same penalty IS ridiculous. Cell phone company excuses abound - "we need to cover the costs of getting a new customer", "we need to cover subsidized handsets", global warming, etc, etc. There are great arguments that these static, inflexible penalties are illegal liquidated damages clauses under California Law. Regardless, this provision of SB 831 forces some reason into the ETF concept.

• Requires Clear Notification of Rights When Unauthorized Charges Made to Phone

This is largely covered by current "cramming" protections, the only clear difference being clearer notification on each bill of a consumer's right to dispute unauthorized charges. Otherwise this reinforces provisions that prohibit the company from reporting to a credit agency while an unauthorized charge is in dispute.

• Prevents Third Party Retailers from Charging Early Termination Fees

Exactly as it says, SB 831 prevents one of the sneakiest, most painful cell phone sales practices, those exorbitant $400 per phone ETFs (discussed above) that many third parties charge in addition to the carrier ETF.

• Right to Cancel if Phone Companies Make Unilateral Changes in Contract

Basic contract law protects this right for consumers, and cell phone contracts (except Cingular at the time this was written) typically make mention of a consumer's right to get out of a contract when changes are "materially adverse." However, the cell phone companies speak with forked tongue, and too often in practice ignore basic contract principles, telling customers they can't cancel a contract even when material terms have changed. SB 831 provides reinforcement of customers' rights to cancel when companies change the terms of the contract.

• Limiting the Term of a Contract to Two Years

Technically, we have seen contracts longer than two years. In fact, due to all major carriers' decisions over the last few years to refuse to prorate the last month of service(another sign of vibrant competition?), a two-year contract now is actually two years plus the amount of days until the next billing cycle date. That said, we haven't seen contracts of 3 or 4 years, but it IS possible. This law would not allow contracts longer than two years.

All in all, this law provides basic, reasonable consumer protections that allow for real competition while minimizing predatory and anti-competitive practices designed to trap consumers rather than provide a service.

Read more about the bill here and here.