Who won the war of Tariff Rule 12?
By Jonny Iosim [1]
On April 24th, the California Public Utilities Commission, made a ruling on AT&T Tariff Rule 12 that will have a significant impact on AT&T marketing abilities. The ruling gave validity to Advice Letters 28800 and 28982 written in 2006 by AT&T. Advice letters in the context here are proposals by AT&T to the CPUC in order to change policies that are currently under the control of the commission. The decision this past April further called for the incorporation of basic rate provisions to be clearly established in customer phone calls as well as on the AT&T website. Eliminated from Tariff Rule 12 are summary and bridging requirements (these were mandatory guidelines for AT&T to incorporate in their phone calls as a way of simplifying the calls due to complaints of purposely misleading customers) for customer service phone calls and an obligation to seek permission before marketing. The age-old war between consumer and corporation has effectively ended on the issue of Tariff 12, but who is the winner?
The battle of the eliminated provisions
According to the April decision, advice letters 28800 and 28982 are now in effect. These letters eliminated certain provisions from Decision 01-09-058 (the 2001 decision in which UCAN won suit over AT&T and consequently mandated many marketing restrictions on AT&T that were incorporated in Tariff 12). These provisions were generally directed towards the conduct of customer service representatives and preventing them from aggressively pursing a sale. AT&T had a notorious history of heinously pursuing a sale on every phone call pursuant to an internal policy called "offer on every call". With the elimination of certain provisions in tariff 12, AT&T may very well return to this practice.
As of now, AT&T does need to clearly structure their customer service phone calls, identifying when the the service part has concluded and the marketing portion has begun. They no longer need to provide a summary of the phone call, and perhaps most importantly, they do not need to seek permission in order to market new services and products. AT&T claims that since the notorious 2001 loss in D. 01-09-058, they have incorporated many new policies to change their customer service images. HOMERUN for example has become the internal model to follow for customer service. HOMERUN consists of
"Have Enthusiasm to answer the call...",
"Obtain first Call Resolution...",
"Make use of your Sales Tools to provide the right the right offer to the customer...",
"Explain the AT&T Advantages...",
"Really make a Quality Offer...",
"Upbeat and Skillful Close...".
"Need to Follow the Contact Guide...".
Despite their new catchy acronym, it is still too early to say whether or not HOMERUN is a hit let alone a "home run" . What is evidently clear is that the elimination of these guidelines from Tariff Rule 12 will ease up restrictions on AT&T's aggressiveness in pursuing a sale on a customer service call. The commission defends their decision by stating that they will keep an eye out for reports and abuses of AT&T's newly found free reign and will not hesitate to reinstate restrictions if need be. The bottom line remains that AT&T has a history of abuse, and without sufficient evidence (and not acronyms) showing that they have changed their ways, removal of these restrictions seems premature and consumers remain at risk. This aspect of the April 24th decision is another homerun for AT&T, who will now be less restricted while making their own sales pitches.
Scorecard AT&T: 1 - Consumer: 0
The battle of the mandated inclusions
The April 24th decision requires that new customers be provided with the basic flat rate for the AT&T service before "bundles" and "deals" are to be suggested. Additionally pursuant to TURN's (The Utility Reform Network) and the DRA' (Disability Rights Advocates) requests, AT&T is now also required to put these basic rates on their website under Tariff Rule 12. It would seem on the surface that this is win-win for the consumer, but is it really?
For starters, the requirement to provide the basic flat rate first, before any bundles, is arguably already incorporated in California Law. While not explicitly stated in 2896, the decision that the commission issued in April stated the following:
"AT&T's marketing script disclosures regarding its stand-alone basic services and its flat and measured basic services rates do not demonstrate that it provides consumers with sufficient information on which to make informed choices as required by Pub. Util. Code §2896.
California Public Utility Code 2896 already requires utility companies to give sufficient information to make informed choices as well as reasonable statewide standards in terms of customer service. In the days of "offer on every call", AT&T would purposely make their phone calls more confusing to consumers who often bought bundles they did not need and sometimes could not afford. When AT&T was failing to give basic rates or purposely drive up sales by advising consumers to purchase unnecessary services, we were not receiving sufficient information and ATT was violating 2896. Consumers should already be protected from such abuse from utility companies. In the 2001 Rule 12 decision, AT&T was penalized $25.55 million for their marketing abuses. So what does this inclusion of the basic rate provision in Tariff 12 do? It pretty requires AT&T to put portions of California law in Tariff 12....so in essence...not a whole lot.
The next inclusion that the April 24th decision called for AT&T to make their basic rates available online in the tariff section. AT&T does indeed provide the basic rate on their webpage. Hooray! By the way, have any of you tried to find the tariff section? How many customers will really be benefited by the inclusion of a basic rate in Rule 12 on the AT&T regulatory page? Simply put, the people who needed to be protected by AT&T's marketing abuse are not the same ones who are going to be looking up tariffs online. Additionally, the regulatory page is not easily navigable and finding the basic rate or even the tariff page may take more than an Internet Explorer. Also, let us also not forget about 2896. Technically, this provision is hardly necessary since AT&T should be following the law(2896) and providing sufficient information to begin with. This provision, while possibly helpful at times of research, does very little in consumer protection or in curtailing AT&T's notorious marketing abuse history. It seems as though this provision was added to appease TURN and DRA. TURN and the DRA did propose other modification to rule 12, but the commission denied these requests. These requests included a 30-day grace period to cancel without penalty, affirming the rights of the commission to actually monitor customer service representatives, requiring AT&T to provide the total estimated bill amount to customers wishing to purchasing services, and a few other provisions that actually had a purpose for us, consumers, and was not a rehash of the law. While it is better that these provisions be in Tariff 12 than not, their effects are speculative and their necessity is minimal. This is not a score for AT&T, but sadly not for we, the consumer, either.
AT&T: 1 - Consumer: 0
The commissions April 24th decision is one that will allow AT&T to return to most of the marketing practices prior to 2001. The main exception is that AT&T is still required to resolve problems that initiated a consumer phone call before they can market new products. However, this aspect was never in dispute through the recent Tariff 12 legal battles. In fact, just the thought that AT&T could eliminate that provision would bring some serious speculation as to whether or not California is taking one huge step backwards in protecting consumers from big utility companies and their egregious marketing practices. Perhaps this is the next step for AT&T? Maybe they can write a new advice letter? The last advice letter seemed to work out for their benefit even though they didn't follow the correct procedure in attempting to change Tariff 12. An advice letter inconsistent with legal procedure coupled with new internal policy acronyms won the commission over once. Whose to say it wont happen again? May I suggest SCORE?
Sale,
Coerce,
On every call,
Retry to sell, and
End call with a sale.
And with that the final scorecard of the AT&T is the only winner here
FINAL SCORECARD
AT&T 1- CONSUMER 0
On the more optimistic side, perhaps AT&T has actually altered their internal policies and is genuinely concerned with providing outstanding customer service and does not wish to confuse customers into spending more money on services they don't need. Time will tell, rather than AT&T or the commission. It should be noted that this decision puts AT&T's conduct in their own hands rather than the commissions. This on face seems fair and logical, but there was a reason why it was taken from them once and without noticeable changes and improvements, the premature April 24th decisions runs the risk of taking Californians backwards rather than forward. The legislature should expand Public Utility Code §2896 to consolidate these types of marketing problems that AT&T and other utility companies use as part of their marketing strategy.