BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

 

 

Investigation on the Commission's Own Motion into the Operations, Practices, and Conduct of Pacific Bell Wireless LLC dba Cingular Wireless, U-3060,

U-4135 and U-4314, and related entities (collectively "Cingular") to determine whether Cingular has violated the laws, rules and regulations of this State in its sale of Cellular Telephone Equipment and Services and its Collection of an Early Termination Fee and other Penalties from Consumers.

Investigation 02-06-003

(Filed June 6, 2002)

Reply BRIEF OF UTILITY CONSUMERS' ACTION NETWORK (UCAN)

 

Michael Shames

Lee Biddle

UTILITY CONSUMERS' ACTION NETWORK

3100 Fifth Ave. Suite B

San Diego, CA 92103

619-696-6966

July 1, 2003

 

I. INTRODUCTION

 

This reply brief is offered in response to the opening briefs of Cingular and Consumer Protection and Safety Division (CPSD) dated May 19, 2003. UCAN will limit its comments on the CPSD brief to the discussion of remedies. Cingular's opening brief will garner the majority of the attention in this brief. Not unexpectedly, Cingular denies that the large numbers of complaints logged by CPSD, UCAN and Cingular itself, the admissions in the evidentiary record and the graphic recounting of abusive actions from nearly 50 customer declarants amounts to any transgressions of California consumer protection laws. Moreover, Cingular denies that the Commission has the authority to take any action even if state consumer laws were flouted by the Company. UCAN will leave it up to the Commission to decide whether this stance is overly aggressive lawyering by Cingular's counsel or further evidence of corporate disinterest in honoring the state's laws.

UCAN's focus will be to rebut many of the disingenuous legal arguments advanced by Cingular and to expose Cingular's repeated mis-citation of legal precedent. UCAN will also address the numerous blatant mischaracterizations of the facts in the evidentiary record. Finally, UCAN will comment upon CPSD's proposed remedies --- and Cingular's tactical decision to eschew discussion of remedies in its opening brief.

UCAN's reply brief will be in three parts. In the first section, UCAN will address the legal issues raised by Cingular in its brief. UCAN will refrain from rearguing the many points that have already been addressed by the Commission in response to Cingular's Motion to Dismiss. However, particular attention will be paid to Cingular choice to ignore or misstate key precedent as well as to update the Commission on recent court holdings that affirm the Commission's decision.

Second, and more importantly, UCAN will take Cingular's general "lack of evidence" argument head on by addressing the facts that have been presented by UCAN/CPSD which support findings of specific violations of law. UCAN will also use this section to address Cingular's defenses, including the claim that it did the best it could to help customers.

Third, UCAN will add to the discussion of remedies to clarify contentions raised by Cingular and issues discussed in the CPSD brief.

II. RESPONSE TO CINGULAR'S LEGAL ARGUMENTS

 

Just as it has in its motion to dismiss, Cingular overstates and exaggerates the pre-emptive power of federal law and selectively portrays precedent case law. Cingular's legal arguments generally try to express the extreme limits it believes are imposed on this Commission- or, presumably, anyone- when attempting to enforce consumer protection laws against wireless companies, and then Cingular tries to limit the reach of those consumer laws.

When it reviews the law, the Commission will find that the courts have increasingly recognized that this Commission still has its traditional consumer protection powers over wireless providers, and that none of the proposed remedies offered by UCAN or CPSD impede on any jurisdictional responsibilities bestowed upon the FCC by Congress. Further, Cingular misstates legal precedent and the record in reaching the conclusion that Cingular has not violated existing consumer protection laws.

A. Federal Preemption Does Not Impede the Commission's Investigation

 

It is certainly appropriate to explore exactly what restrictions may be placed on remedies sought in this case. (Cingular brief at 19). In response to Cingular's Motion to Dismiss, the Commission did precisely that. Intent upon relitigating this matter, Cingular repeats arguments and adds additional ones. One glaring omission is Cingular's failure to address any jurisdictional conflicts with the specific remedies put forth by UCAN.[1] But the most notable omission is Cingular's failure to acknowledge at least four recent appellate cases that undermine Cingular's jurisdictional defense.

Cingular's opening brief consists of vague yet grandiose statements that federal law- specifically Section 332 of the Communications Act - preempts allegations of the OII discussing level of service. (Cingular brief at 20). Cingular also claims that any remedy dealing with termination fees or other fee policies necessarily is an attempt to regulate rates. (Cingular Brief at 19-25). However, case law, and in particular recent cases that have emerged since the Cingular Motion to Dismiss was argued, reaffirms the Commission's decision that both service levels and termination fees may be discussed without implicating the prohibitions of Section 332.

On its face, all that Section 332 prohibits is regulation of "the entry of or rates charged by" wireless providers.[2] As discussed below, the recent cases show that states are permitted to engage in a discussion of service levels and even rates charged for the purpose of enforcing consumer protection laws. As the California Appeal Court has already stated in Speilholz v. Superior Court, "[a] judicial act constitutes rate regulation only if its principal purpose and direct effect are to control rates."[3]

UCAN will refrain from a repeat of the many cases it referenced in its response to the Cingular Motion to Dismiss. But the Commission should take notice of two recent state appeal court decisions that squarely support state efforts to enforce state consumer protection rules and impose damage penalties on wireless providers. These recent cases amount to final nails in Cingular's jurisdictional coffin.

In Union Ink Co. v. AT&T Corp.[4], a New Jersey appeals court faced a complaint very similar to what is at issue here. Plaintiff's alleged that:

[S]ubscribers are frequently disconnected involuntarily, unable to connect with the service, and therefore unable to place calls, and do not automatically receive credit for involuntary disconnections when unable to reconnect within five minutes of such involuntary disconnections. Also, subscribers often do not receive calls placed to them. Compounding this problem, callers to subscribers are often not placed in the subscriber's voice mail system.[5]

 

AT&T claimed that the states' scrutiny of this practice would amount to a prohibited regulation of rates or market entry. [6] AT&T's arguments were rejected. The court first stated that "pre- emption is not lightly found; the intent of Congress to displace the historic police powers of the states must be ‘clear and manifest,'" citing in part to Wisconsin Pub. Intervenor v. Mortier, 501 U.S. 597, 605 (1991). The court then reviewed in detail the increasingly long line of decisions discussing Section 332's preemptive power and concluded:

The intent of Congress regarding the particular issues before us has been stated with sufficient clarity to command the almost uniform recognition of the administrative bodies and courts that have touched the issues. It is that the Communications Act should not supplant state law regarding claims that do not bear directly on rates or entry into the field of mobile telecommunication. Those rules of law that, generally, govern the relationships between parties to consumer transactions are singled out for particular preservation.[7] (emphasis added)

 

In Bryceland v. AT & T Corp[8], a Texas state appeals court ruled that claims against a wireless communications provider for fraud in the inducement, negligent misrepresentation, deceptive trade practices, and breach of contract were not preempted by federal law. The court specifically ruled that a review of the level of service provided by AT&T did not force the court to engage in prohibited rate setting:

On reviewing the factual allegations in Bryceland's amended petition, we conclude its allegations do not require the factfinder to prescribe, set, or fix a reasonable previous or prospective rate for AT & T's future services to adjudicate Bryceland's claims. Nor would determining what damages should be awarded to Bryceland involve setting a rate for services charged. Rather the court will determine the difference between the value of what AT & T promised and what Bryceland received. (at *3)

 

The judicial title wave flooding Cingular's jurisdictional defense continued with new cases in 2003. This year, at least two additional decisions have supported a state court's ability to regulate wireless carriers. In Russell v. Sprint Corp.,[9] a court determined that complaints regarding Sprint's directory assistance charges did not necessarily require the court to set rates, but instead attacked Sprint's disclosure of those rates.[10] In State ex rel. Nixon v. Nextel W. Corp.[11] the Missouri Attorney general alleged that Sprint and Nextel "have decided to charge their customers more money for cellular telephone services, but rather than increasing their basic rates, defendants have characterized the increase as a fee."[12] Although the allegation directly discussed rates, the court determined that there was no preemption, since "there is nothing in the Petition which will require defendants to change their rate practices."[13]

The Commission is on very solid legal ground in its application of state consumer protection laws in this OII. Cingular's arguments are groundless.

B. Termination Fees and Other Billing Practices Are Not Preempted

Cingular also argues that any prohibition on charging early termination fees, cancellation fees or mandating the terms on which such fees can be charged would be preempted rate regulation (Cingular Brief at 22-23). First, Cingular fails to provide any evidence that CPSD or UCAN seek to prevent the company from charging early termination fees. Moreover, the authority cited by Cingular does not support such a proposition even if such challenges were made.

Cingular continues to look back to this Commission's 1995 petition to the FCC[14] as the basis for arguing that the Commission may not prohibit or limit termination fees. (Cingular Brief at 23). However, this bears little resemblance to what the FCC actually stated in that case. In 1995, the CPUC's proposed regulatory scheme involved regulation of specific monthly rates and limitations of certain marketing practices, such as "lock-down" contracts that included termination fees beyond the first year.[15] The FCC noted the CPUC had to demonstrate that continued direct rate regulation was necessary to protect consumers from unjust and unreasonable rates. The federal commission simply stated that it could not make a determination that continued CPUC regulation was necessary on the basis of the record before it.[16] The FCC also stated that, "establishing with particularity a demarcation between preempted rate regulation and retained state authority over terms and conditions requires a more fully developed record than is presented by the California Petition and related comments."[17] Thus, this case can be held to stand for little more than a determination that the CPUC presented insufficient evidence to show that continued direct regulation of rates was necessary. The FCC did specifically state: "[W]e believe the CPUC retains whatever authority it possesses under state law to monitor the structure, conduct and performance of CMRS providers in that state." [18]

Two older cases are notable for the flexibility they give states to act on issues tenuously and indirectly related to setting wireless rates, including termination policies. In Brown v. Washington/Baltimore Cellular, Inc.[19] the federal court was asked to remand to state court claims that the defendant wireless carrier charged unlawful late fees. The defendant argued that Section 332 preempted the field and plaintiffs could not challenge the validity of late charges. The court identified the key issue under Section 332 as "whether late fees constitute the ‘rates charges' or ‘other terms and conditions' of wireless service."[20] The court found that Congress did not intend to preclude state lawsuits over late fees:

While Congress may have completely preempted claims relating to rates, it has left other terms and conditions to the states. . . The court finds that fees are not included in "rates" of service, but rather are part of the "other terms and conditions" of service. While rate of service reflect a charge for the use of cellular phones, late fees are a penalty for failing to submit timely payment . . . Congress did not pre-empt all claims that would influence rates, but only those that involve the reasonableness or lawfulness of the rates themselves. [21]

 

Similarly, in Esquivel v. Southwestern Bell Mobile Systems, Inc.,[22] the court determined that termination fees are "other terms and conditions" of service. "The court is persuaded that the liquidated damage provision here is a ‘term and condition' of the agreement rather than a rate." Id.

The above cases support the idea that this Commission may not fix Cingular's future rates. Nor may the Commission require Cingular build a certain number of towers. UCAN and CPSD have requested no such remedy. Beyond these few express limitations, this Commission has great flexibility to craft the remedy it believes appropriate, and the Commission should not be persuaded by Cingular's misguided attempts to show otherwise.

It is notable that Cingular relies upon TPS Utilicom Services, Inc. v. AT&T Corp.[23] Cingular cites this case in support of the proposition that state consumer protection claims can be preempted by Section 332. (Cingular Brief at 24). However, TPS Utilicom Services is not a consumer case at all. It involves one corporation suing another. Second, the TPS plaintiff requested that the court find the FCC acted inappropriately in permitting an AT&T affiliate to enter the FCC's auction of cellular spectrum.[24] The court rightfully determined that this was an action that squarely involved market entry and the propriety of the FCC's auction guidelines, and should be taken up at the federal level, rather than in state court.[25] Thus, this case is inapposite to the consumer issues before the Commission here and has been misrepresented by Cingular.

C. Public Utilities Code Section 451 is Not Preempted by Federal Law and Applies to Cingular

 

UCAN will not re-engage in a belabored argument over the applicability of Public Utilities Code Section 451. Suffice to say, the very terms of Section 451 discuss "all rules made by a public utility". Second, Cingular makes a very conclusory argument that any discussion of the manner in which Cingular provided its service to the public necessarily implicates Section 332's prohibition on regulating the "rates or market entry." (Cingular Brief at 21 and 28). As discussed at length above, a review of service levels or even rate policies does not constitute prohibited rate setting or improper control over market entry.

By law, Commission is prohibited from requiring Cingular to provide a specific level of service as a condition of entering in the California market. Nor may it set what rate Cingular must charge to its customers. (See discussion above) Cingular improperly attempts to shoehorn this limitation into prohibiting a review of what level of service Cingular provide versus what it promised customers.

This Commission is not being asked by any of the parties to "prescribe, set, or fix a reasonable previous or prospective rate" for Cingular's service (see Bryceland above), but to simply determine whether Cingular adhered to state consumer protection laws in its representations of its service and its use of early termination penalties. A ruling by this Commission that Cingular's service was "unjust and unreasonable" because it was less than was promised to consumers or because Cingular required customers to submit to unfair rules does not implicate Section 332's prohibitions. Once again, "a judicial act constitutes rate regulation only if its principal purpose and direct effect are to control rates."[26]

UCAN was amused by but unpersuaded by the attempted analogy offered by Cingular between its customer service and that offered to commuters using the BART transportation system or Golden Gate Bridge. (Cingular brief at 28-29). This comparison is inappropriate albeit ironic. Congestion levels on BART and the Golden Gate Bridge are obviously well known enough to the public and are fully disclosed on a daily basis on all morning and evening news shows. In stark contrast, Cingular has fought desperately to deny its customers any information about the congestion on its network - even historical information was deemed by Cingular to be sacrosanct.[27]

D. Public Utilities Code Section 2896 is Not Preempted by Federal Law and Does Apply to Cingular

Cingular here recycles an argument rejected by this Commission on several occasions. Cingular again claims it cannot be held to the standards enunciated in 2896 until the Commission requires it to follow such rules. (Cingular opening Brief at 32) The Commission has, of course, rejected this argument in the response to Cingular motion to dismiss[28], and in UCAN v. Pacific Bell.[29] Most importantly, since the motion to dismiss, the Court of Appeal has supported the Commission by rejecting Pacific Bell's appeal of the UCAN v. Pacific Bell case.[30] The Supreme Court rejected review as well.[31]

Perhaps acknowledging that it will inevitably be held to the standards of Section 2896, Cingular distorts the meaning of this statute into one that essentially places no obligations on Cingular at all. In particular, Cingular argues that this law does not "even suggest that a provider would be required to provide a coverage map to a particular level of detail or to distinguish between strength of signal on such maps"(Cingular Brief at 33).

Cingular chooses to ignore a key clause in that statute, which reads: "but not limited to." This clause is important as it recognizes that no statute, can define each and every act a company must take to comply with the law. Section 2896 places a burden on companies to provide "sufficient information upon which to make an informed choice among telecommunications providers." It is the obligation of the company, and when it fails then regulators, to make the determination of the sufficiency of information, as "it would be impossible to draft in advance detailed plans and specifications of all acts and conduct to be prohibited since unfair or fraudulent business practices may run the gamut of human ingenuity and chicanery."[32]

Thus this Commission must review the particulars of this case and determine if Cingular met its reasonable disclosure obligations to the public under Section 2896. Cingular may not be in violation of a law that states a specific requirement to make true coverage maps available to the public.[33] However, what this Commission should determine is that withholding coverage information from the public is fundamentally unfair and prevents the effective functioning of a competitive marketplace. As discussed in the opening briefs and in the fact section below, Cingular withheld information about 1) significant call blocking and capacity constraints, 2) specific limitations in the network to provide coverage in large areas of urban California and 3) the lack of coverage in residential areas and the challenges of in-building coverage. Cingular provided no readily accessible information about system limitations.

Provision of accurate coverage maps would have been among the best ways Cingular could have provided this information to the public. The Commission action here need not sanction Cingular specifically for failing to provide coverage maps. It needs to sanction Cingular for failing to provide the public with the information necessary to make an informed choice about Cingular and for providing misleading maps and other documents. The provision of real coverage maps would have been a way to readily give this information to the public.

This law, by not demanding a laundry list of actions required by Cingular, actually provides Cingular the flexibility to craft its own program for providing the public with necessary information. Cingular need not vet every marketing program and map with the Commission. It seems Cingular's essential argument is that since the Commission has not already found its marketing efforts improper and insufficient to conform with 2896, it cannot do so in this proceeding. Logic does not support this argument.

Cingular also attempts to mischaracterize testimony in support of its argument that California law cannot compel disclosure of information. Cingular states: "UCAN's witness/counsel Shames admitted that no standards relating to internet publication of coverage maps currently exist." (Cingular Brief at 34). In reality, all Mr. Shames did was state the obvious: there is no current Commission rule which spells out a specific requirement to publish maps. (HT1323-1325). However, there are standards relating to disclosure of information, namely code Section 2896.

E. Decision 95-04-028 and other consumer protection laws (CLRA/17200/17500).

 

Cingular concedes that bundling is subject to Commission enforcement under the standards of consumer protection law. (Cingular Brief at 34). Where UCAN and Cingular seem to differ is the definition of "bundling activity". UCAN submits that "bundling activity" includes the sale and marketing of bundled packages of phones and service, the promises made during the sale of bundled packages and the terms and conditions customers of bundled packages are required to accept. Cingular paints an unduly limited scope of the Commission's decision. It limits any application of the bundling rules to ". whether it unfairly offers only specific services with certain phones, whether Cingular's distribution inappropriately bundles service and equipment, etc.". (Cingular Brief at 36). UCAN submits that Cingular's position does not square with the language and spirit of D. 95-04-028, which intended to prevent unscrupulous acts related to the sale of phones and service.[34]

As was explained in UCAN's Opening Brief, the practice by agents of tacking on additional termination penalties on the basis that was required to recover the cost of the phone sold to customers is a direct consequence of the bundling permitted by the Commission in D. 95-04-028. The Commission is now obligated to look to those same consumer laws it expected to protect consumers and determine which Cingular and its agents may have violated them in their efforts to recover the cost of phone hardware (CPE) sold to customers in bundled transactions. (UCAN Brief, p. 18)

D. 95-04-028 is but one of many bases for this Commission to apply the standards of consumer protection laws to enforce Commission rules and law. As UCAN identified in the opening brief, the Commission has been urged by the courts on multiple occasions to review standards from similar consumer protection law when adjudicating commission cases, since the standards of concepts such as "fairness" and "reasonableness" are universal and are common across several statues.[35]

For example, B & P code sec 17200 prohibits, among other things, "unfair" business activity, while PUC Section 451 requires "fair" business activity. It would only be appropriate for this Commission to look to the standards of fairness inherent in Section 17200 case law in rendering a decision under PUC Section 451. Similarly, the Consumer Legal Remedies Act is a declaration of this state's effort to "protect consumers against unfair and deceptive business practices," (Civil Code section 1760), while Public Utilities Code Section 2896 "established minimum standard[s] reflect[ing] traditional regulatory concerns for consumer protection and also emerging concerns about fair competition."[36] Given the similarity in both intent and language in these laws, the Commission should rightfully draw on standards articulated by the courts as establishing a reasonable standard of conduct for businesses under the Public Utilities Code.

UCAN feels no need to respond to Cingular's claims on these specific legal standards at any length, and will stand by the arguments made in UCAN and CPSD's briefs.[37] However, UCAN does feel compelled to bring to the Commission's attention at least one serious instance of misleading legal argument by Cingular. Cingular cites to one specific case to establish limits on the Commission's ability to discern unconscionable contract provisions. (Cingular Brief at 39). In so doing, Cingular grossly misstates the conclusion of Schnall v. Hertz Rent a Car.[38]

Cingular implies that the case permits excessive termination fees, so long as other providers have lower termination fees- or a so called "meaningful choice" exists. Specifically, Cingular states that "a contractual provision is not, however, "unconscionable" when customers have a "meaningful choice" and can avoid the provision either by selecting another of the defendant's products, or by purchasing from a competitor whose contract does not include the subject provision" and references the Schnall case in support of this proposition. (Cingular Brief at 39)

However, Schnall stands for no such proposition. In Schnall, the face of the Hertz rental contract allowed the customer three different choices for how to pay for a full tank of gas in a rental car. The customer could chose to 1) return the car with a full tank 2) pre-pay for the gas at a close to market rate or 3) pay a higher rate for Hertz to refill the tank upon return.[39] The court found that the face of the Hertz contract provides a choice of options and a consumer was not obligated to choose the one challenged as unconscionable.[40] By contrast, the contracts offered to customer by Cingular and its agents do not present choices of termination fees. Nothing on the face of the contract provides the customer the opportunity to avoid the termination fees.[41] No document in the record indicates that a customer may bypass a termination fee - because no such option was made available to customers. The price was the same for the consumer whether a phone was purchased or not. (HT 1236)

It is also interesting to note that although the Schnall court did not find the contracts to be unconscionable per se, it nevertheless refused to dismiss the case. The court found that the manner in which Hertz disclosed the true cost of the fuel may be misleading, since the cost of fuel is disclosed in a document separate from the main contract.[42] This part of the Schnall decision corresponds to the facts in this case. Here the true cost of terminating Cingular's service is not revealed in Cingular's own contract (or ads), which only reveal Cingular's $150 termination fee. That true cost is not disclosed until the customer is presented with an additional codicil by the agent who seeks additional fees up to $400.

 

 

III. DISCUSSION OF FACTS

 

 

Cingular's brief focuses largely on an attempt to diminish the evidence presented by UCAN and CPSD. Cingular attempts to portray the Cingular customer experience as one that is fair and states that "Cingular has at all times adequately disclosed the nature and extent of its service to consumers" (Cingular Brief at 16). It argues that it did nothing wrong (Cingular brief at 3) and that the record contains no valid customer complaint (Cingular brief at 6). Cingular further implies that it has done all it can to alleviate whatever problems its customers did face (Cingular brief at 3)

The evidentiary record in this proceeding shows otherwise. As will be explained below, untold thousands of Cingular consumers were exposed to a service environment that was legally deficient and, in some cases, downright shameful, and certainly not just and reasonable.[43] The facts also show how Cingular's defenses and explanations for its behavior ring hollow. Cingular also ignores that it specifically failed to take certain actions that could have easily and more quickly mitigated network problems.[44]

Before getting into specific responses to Cingular's factual arguments, UCAN presents here a general summary of some of Cingular's most egregious assertions and where contradictory evidence abounds to negate those assertions.

A. Highlights of Cingular's Most Outrageous Contentions

1. "There is no evidence of significant consumer problems (Cingular brief at 6) There is no showing that Cingular was actually at fault in even one complaint" (Cingular brief at 8)

 

UCAN and CPSD presented evidence that up to several hundred thousand Cingular consumers experienced problems with their Cingular service.[45] Aside from over 1100 documented complaints directly to UCAN and CPSD, the Commission has been presented testimony directly from 48 customers who went through the time and trouble to submit sworn declarations.[46] Most of these customers were subjected to depositions or cross-examination by Cingular.[47] The egregious nature of these complaints is discussed at length in UCAN and CPSD's testimony.

Cingular failed to produce any alternative number of consumer problems, since Cingular intentionally chose not to track or record most consumer complaints. (HT 578: 1-15 and HT 1406-1408) It does not know how many people called the company to complain about service problems. It does not know how many customers went back to the sales locations to complain about service problems. Thus Cingular has no rebuttal to UCAN/CPSD facts about complaints.

2. "Representations of misleading advertising turned out to be false" (Cingular Brief at 12)

An audacious statement. Even Cingular's own expert -- Professor Kamins-- testified that Cingular's ads were potentially misleading both because the ads promoted the idea that residential coverage was ubiquitous[48] and second because the ads hid the nature of Cingular agents and their additional termination fees.[49] Cingular's expert also conceded that he did not review whether Cingular's network was adequate to back up the claims made in ads (HT 1114:20-27). He admitted that he has seen companies overstate service attributes in order to build market share and eliminate competitors (HT 1103: 8-11). Finally, he made his determination that Cingular's ads were not improper using a standard that required intent to deceive (HT 1121: 7-13), which is not the correct standard.[50]

UCAN and CPSD presented over 50 unique ads touting Cingular's "unlimited" service, which allowed customers to "talk hours, not minutes" using Cingular's "whenever, wherever" service, for which "no coverage map was required."[51] Not one ad reveals the up to $400 in additional termination fees charged by agents. And most of them make overt suggestions that Cingular offers coverage at customers' home and offices despite evidentiary evidence that Cingular's network was not designed to offer either.[52]

3. "CPSD/UCAN did not establish that coverage or capacity fell below customers' reasonable expectations" (Cingular Brief at 15)

 

Cingular admits that its network did not meet its own expectations or industry standards.[53] Even without the company's own admissions, the Commission has ample evidence of customers' reasonable expectations. Aside from the advertising discussion above, UCAN/CPSD presented numbers of customers whose reasonable expectations were created by Cingular and then not met when they:

1) Did not get coverage despite explicit promises by Cingular's sales representatives and maps showing coverage.[54]

2) Were subject to up to $550 termination fees per phone, even though all ads disclosed only $150 termination fees.[55]

3) Could not make or receive ANY calls during peak hours for days on end.[56]

4) Had less coverage with Cingular than with their prior carrier.[57]

5) Were told to by Cingular representatives to expect system improvements shortly, yet those improvements did not occur.[58]

6) Purchased phones at locations with special signal enhancement devices.[59]

Further, UCAN/CPSD expert witness Robert Zicker testified about his experience in focus groups. He learned that customers expected the phone to work in whatever areas are important to them, and had little technical knowledge which would make them think the capabilities of the phone were limited. (HT 745)

UCAN and CPSD also presented Cingular's own documents showing that customers routinely canceled their service because their coverage expectations were not met.[60] And, as mentioned above, Cingular has admitted that its calls were blocked at rates over 400% higher than their own targets. [61] Cingular also admitted that it enhances signals at certain specific sales locations, which would give rise to unattainable expectations of in building service.[62] Cingular also sent letters promising customers imminent improvements in the same areas where Cingular knew local opposition or building moratorium prevents building system improvements.[63]

All of these factual assertions are largely unrebutted. Cingular presented no specific evidence regarding consumer's reasonable expectations and denied relying on any studies of customer expectations (HT 1410:20 to 1411:4). Cingular seems to want this Commission to believe that a FCC pamphlet provides evidence of consumer expectations. A review of this pamphlet will not inspire such confidence. Nor the unrebutted fact that this pamphlet was just "recently" put on the FCC website (HT 836:13:50). Cingular has presented no evidence tha the said pamphlet was available to its customers in 2001 or 2002. Additionally, Cingular has not presented a single customer who actual saw and read this pamphlet. Cingular apparently made no effort to distribute this to customers and cannot show it assisted customers in forming their expectations of service.

What Cingular does say about consumer expectations reveals exactly why the typical consumer may be prone to expectations about wireless service that Cingular cannot meet. Cingular states:

"The large majority of network-related testimony revealed precisely why a wireless consumer cannot reasonably expect to be able to place and receive calls on their wireless handset 100% of the time and that complete coverage is not provided by any carrier in California today." (Cingular Brief at 15)

 

But the "network related testimony" presented in this case consists of information that Cingular, and indeed the entire industry, keeps out of public view.[64] Virtually every network related document produced in this proceeding has been held by Cingular and this Commission as confidential, including maps showing Cingular's actual current coverage and current congestion and blocking rates.[65] One of the precepts of the case advanced by UCAN and CPSD is that if this information was revealed to the public and not held as secret, customers' expectations of Cingular service would comport more with what Cingular can actually deliver. It is absurd for Cingular to claim that the public's expectations can be judged based on information Cingular prevents from being publicly disclosed. When reviewing what consumers might reasonably expect from Cingular, this Commission must look to what is actually available to customers, not what Cingular selectively presents to this Commission in its defense.

As will be discussed in CPSD's reply in more length, Cingular has not provided to the Commission most of the focus groups and other customers studies it conducted in support of its multi-million dollar ad campaigns. Cingular's extensive market research would, of course, provide the company with an understanding of the average wireless consumers. Yet it presented none of this in its defense. What it did produce, long after hearings concluded, shows that customer coverage expectations were repeatedly not met.[66]

UCAN submits that the Commission has before it an adequate evidentiary record that will permit it to serve its statutory duty of determining what Cingular's customers' could reasonably have expected in light of the company's representations and then whether those reasonable expectations were met by the company.

5. "Cingular has at all times adequately disclosed the nature and extent of its service to consumers" (Cingular Brief at 16)

 

Cingular's advertisements told consumers that "no coverage map was required"[67] and it had "unlimited" service.[68] Ads and brochures showed people enjoying coverage inside homes[69] and on mountains and in boats.[70] Maps showed vast unbroken areas of coverage.[71] Agent owned stores appeared identical to Cingular owned stores, both in ads[72] and in appearance.[73] No ads revealed that termination fees may total as much as $550 per phone.

After being locked into contracts (with NO cancellation clause during most of the OII period) customers learned that Cingular did not guarantee any level of coverage, even in a customer's urban home or office[74] and "that lack of residential coverage was consistent with wireless technology."[75]

The record shows that, not only did customers not know the extent of Cingular's network problems, but some of Cingular's executives were also unaware.[76] Cingular now claims that it mitigated this lack of disclosure to its customers by offering a "de facto" termination policy even before actually having a written one. Yet Cingular cannot point to anything in which it communicated this secret policy to its own customer service reps.[77] Cingular has no idea how many customers called to ask about canceling and were told about the written "no-return" policy rather than the secret policy. (HT 575:1-8) Cingular produced nothing showing it informed its agents about this secret policy, and it has no idea how many people attempted to return their phone at agent locations. (HT 1421:19-22) And, Cingular can not offer any estimates of the number of customers who refrained from calling because they were not aware of and had not been told of the "de facto" policy.

Cingular also claims that its disclaimers were sufficient to warn customers about network limitations. (Cingular Brief at 101) First, even if accepted as true, the record is replete with customer declarations describing sales representatives' claims that contradicted company disclaimers about coverage not being guaranteed.[78] Second, Cingular's disclaimers varied over time and generally do NOT express that coverage is not guaranteed at any specific locations.[79]

6. Cingular cannot be expected to obey "secret" rules nor can the Commission reasonably enforce such non-existent rules (Cingular Brief at 17)

 

Cingular is selling telecommunications products and services to consumers in California. It is not subject to "secret" rules, but law developed by the California Legislature, standards enunciated by California courts and rules handed down by this Commission. Courts and this Commission are not obligated to make a laundry list of every act that may be a violation of the law, nor direct companies on what it must do to comply with those laws. As the courts have stated:

It would be impossible to draft in advance detailed plans and specifications of all acts and conduct to be prohibited, since unfair or fraudulent business practices may run the gamut of human ingenuity and chicanery.[80]

 

Notably, it is apparent that none of the witnesses presented by Cingular had familiarized themselves with California consumer law. As Cingular's advertising expert conceded, it is critical for a company's marketing operations to be aware of the laws of the state in which they do business. (HT 1097:17-22) Yet, Cingular witness and marketing executive David Garver was generally unaware of California consumer laws (HT: 1259: 24-26). More importantly, Cingular's advertising expert made his conclusions based on faulty law. He states that that an ad is only deceptive if the company intended to deceive (HT 1121:7-14), which is not the correct legal standard in California.[81] Cingular had only to read the laws to know whether they were violating them. Of course, since Dr. Kamins did not review Cingular's actual network capabilities, he would have no way to determine if Cingular falsely represented the capabilities of that network, even if intent was the requirement. (HT 1114:20-27).

B. Evidence Regarding the Customer Experience

Cingular's general contention is that the Commission's investigation is tantamount to a "manufactured crises". (Cingular Brief at 1) In order to rebut this contention, UCAN will describe below how the evidentiary record establishes a relatively typical experience for the prospective Cingular customer from 2001 to the present. This section will briefly summarize the customer experience, from prior to sale through an attempt to terminate service. It will also demonstrate what little evidence there is on the record from Cingular attempting to explain away some of these issues.

The customer experience begins, of course, prior to the sale taking place. Just as with any product or services, a customer's decision to investigate Cingular service and the decision to purchase from Cingular is formed by such things as advertisements and brochures promoting Cingular service, promotional materials in stores, and conversations with sales representatives.

 

 

PRE-SALE CUSTOMER EXPERIENCES
1. Ads for Cingular's "unlimited coverage" for which "no coverage maps is required"[82]

The Commission has before it a wide range of Cingular advertisements, brochures and other promotional material. The Commission also has the testimony of expert witnesses Professors Pratkanis and Kamins. From this evidence, Commission has an evidentiary record upon which it can determine if these ads appropriately portray the fact that Cingular would not guarantee the performance of its network at any specific location or that customers could expect 400% more call blocking than the industry standard. The Commission can also determine whether a reasonable customer would have known that the pictures referring to residential and office scenes effectively conveyed that Cingular had not designed its network to provide in-building or at-home coverage. [83]

The Commission must determine whether the information in these ads or other sales literature disclosed to customers information that Cingular knew internally. For example, that let Cingular's coverage in residential areas was particularly weak.[84] Or that the Cingular network was overtaxed and customers were having calls blocked at high rates.[85] The record shows that Cingular knew of the importance held by customers of network quality. [86] UCAN submits that Cingular told the consumer what the consumer wanted to hear; it did not give consumers the true facts upon which they could make an informed decision.

As discussed above, Cingular's own expert thought some of these ads were potentially misleading. (HT 1125: 28-1126:2). Further, in attempting to defend the "whenever-wherever" ad, he pointed to the fact that it really just promotes convenience, and not ubiquitous coverage. (Cingular brief at 71) Among the "conveniences" Dr. Kamins points to is the ability to call and explain a late arrival from traffic jams. (Cingular brief at 71.) This is ironic, because another part of Cingular's same brief points out that traffic jams place strains on network capacity and are times when customers might regularly be denied service. (Cingular brief at 103). Thus, even if a customer formed the impression that you could regularly make calls in a traffic jam based on this ad, that customer would be forming an expectation that Cingular considers unreasonable.[87]
2. No Way For a Customer to Distinguish Between Cingular-Owned Stores and Those Owned By its Agents.

When the average customer first approached a Cingular store it was presented with misleading information about ownership and control of the Cingular store selling the phone service. Customers had no realistic way of knowing whether the store was agent-owned or company-owned, nor of the consequences of accountability attendant with the different ownership. This is an important point as the record in this case establishes that there are significant differences between shopping in an agent owned store versus a Cingular owned store. And, the majority of customers dealt with Cingular agents.[88]

Yet ads created by Cingular hid the distinction between company owned and agent owned stores. Cingular made no differentiation between agent-owned and company-owned stores in its ads. (HT 1249:10-13) In fact, the agent-owned stores themselves were made to "look and feel" like company owned stores so as to minimize the distinction.[89] Yet, the Cingular customer who patronized an agent-owned store was to later learn that they had notably fewer rights and protections than with a Cingular owned store. While there is nothing inherently wrong with Cingular developing a uniformity among the different ownerships, Cingular is estopped from relying upon a defense that holds customers responsible for being able to discern the differences in the stores' ownership.

Moreover, Cingular can not distance itself from the practices of the agent-owned stores for charging exorbitant liquidated damages for contract cancellations. UCAN discussed a few of the customer witnesses who were subject to these $400 termination fees in its opening brief and will not belabor the point. (UCAN Brief at 29). Due to these unrevealed termination fees, they stayed with Cingular, providing Cingular with revenue it would not have received, but for the fees Cingular allowed its agents to impose.

3. Maps and Materials Given to Customers in the Store.

 

Once at the store, customers were given misleading and deficient coverage maps, were presented with patently false oral representations by salespersons who had little accountability (nor were judged) for their misrepresentations. Customers were not informed that some stores had their signal strength artificially enhanced by nearby antenna boosters. And customers were never told that notwithstanding the ads that suggested in-building and at-home coverage was commonplace, the Cingular network was not designed to provide in-building or at-home coverage. UCAN alleges that all of these actions and omissions violate state consumer protection laws.

Cingular's opening brief avoids the critical question of what its "coverage maps" show to the average customer. The overwhelming evidence is that the maps only show "rate areas" and not actual coverage, yet they were routinely provided to customers as coverage maps.[90] Any customer who asked about coverage should have truthfully been told "we cannot create a map showing coverage and I can't tell you where your phone will work." Yet the record indicates otherwise; customers were led to believe that the maps indicated extensive wireless coverage.[91]

All of the publicly-distributed maps produced in this proceeding show large, unbroken areas of "coverage" over most populated areas of California.[92] In contrast, the maps designated as confidential and not made available to customers show a very different story.[93] Again, this Commission must look to what is publicly available to determine what a customer might reasonable have expected from Cingular.

4. Cingular Did Nothing To Restrain In-Store Representations

Cingular ostrich-like stance that there is very little evidence of in-store misrepresentations stretches credulity. (Cingular brief at 85). In reality, the record before this Commission demonstrates that there was a pattern of misrepresentation, some of which will be reviewed again below. At page 34 of its brief, CPSD identifies some of the voluminous material complied from customers identifying misrepresentations by sales representative, including customers specifically promised coverage in buildings.[94] U CAN discusses some examples at pages 63-64 of its opening brief.

What emerges is a pattern in which Cingular salespeople did and probably could not help but make misrepresentations to their customers because they were not given essential information by Cingular. They were not informed of network deficiencies. They were not informed of customer dissatisfaction with coverage. They were not provided lists of upcoming projects. They were not provided with any maps of Cingular's network.[95]

Most importantly, Cingular has presented absolutely no evidence of any sort of program or effort to keep agents and sales representatives from misrepresenting service or any evidence of discipline taken against any agent or salesmen for misrepresenting service to customers. Sales representatives and agents appear to have only one incentive: to sell more phones. [96] Cingular's "mystery shopper" program was little more than a way to keep agents on the sales message, and not a way to check their honesty. As described by UCAN in its opening brief, the deficiency of the mystery shopper tests almost guaranteed that sales representatives would mislead customers who were concerned about network quality. (UCAN Brief at 64-65)

 

POST SALE CUSTOMER SERVICE/COMPLAINT RESPONSE

 

The evidence shows that Cingular's unfair and unreasonable behavior continued after the sale.
5. Customers Were Given Misinformation About Source of Reception Problems.

Cingular's sales agents - either because they were ill-informed or because they actively sought to deceive customers- repeatedly blamed Cingular's phones for reception difficulties. The pattern shown in the evidentiary record is that customers were convinced to upgrade phones rather than cancel their service.[97] In each case, the phone upgrade resulted in a renewal of a long-term contract, thus locking the customer into a longer commitment. And in no case did the upgraded phones resolve the customers' problems. It merely masked the source of the reception problems and kept the customer on the Cingular system. And Cingular presents no evidence or argument in its brief showing that the upgraded phones did offer better reception abilities.

6. Customers Were Lied to About Pending Network Improvements

Alternatively, customers complaints about the network deficiencies were affirmed by Cingular representatives but they were told that an antenna installation in that particular location was imminent, thus convincing the customer to defer canceling the service.[98] However, to their dismay, many customers later learned that the installations were not imminent. In many cases, the antenna installations apparently never occurred. And in any case, no Cingular employee had any basis to suggest "imminent" installations, as the Cingular computer system placed no completion dates on any planned antenna installations.[99]

7. Customers were Misinformed about the Return Policy

Prior to May 2002, Cingular apparently had a "secret" 14-day return policy. Of course, there is nothing in writing to support that this policy even existed. What the record shows is that all written policies on this point indicate that "no return is possible".[100] Additionally, the record indicates that customer service were not required to disclose this policy to customers. (HT 575:1-8) Some did, some did not. Cingular is unable to present evidence to that effect.

Alternatively, the customer was told that there was nothing wrong with the Cingular network and that the customer was contractually obligated to pay an excessive termination penalty if he or she cancelled the service contract. This preemptive threat discouraged untold numbers of complaining customers from asserting their right to cancel the contract. Customers simply chose to put their Cingular phone in a drawer, but continued to pay Cingular a monthly fee, just to avoid paying Cingular its termination fee.[101]

8. Offers to waive terminations fees were hollow

When a frustrated Cingular customer did finally decide to cancel, in far too many cases, customers were treated shabbily and wrongfully subjected to excessive termination fees. Customers were whip-sawed between Cingular and their agents. For example, Cingular might agree to waive its termination penalty for a complaining customer but would take no action against its agents who sought excessive penalties of their own.[102] Cingular would wash their hands of the matter and consider the customer complaint resolved.[103] Meanwhile, the customer would be subjected to termination penalties of up to $400 imposed by unreasonable agents who were acting under the control of Cingular.

C. Cingular's Defenses in its Brief are Not Supported by the Record.

1. Cingular's "Mature Market" Defense is Groundless

 

Cingular's presents an argument that consumers could not be misled because "the reasonable consumer comes into an environment with experience, cynicism, and knowledge of consumers in a sophisticated marketplace." (Cingular Brief at 77-78). Cingular provides no substantive study of consumer expectations or testimony from Cingular's own internal marketers. Instead, it cites to Dr. Kamins somewhat tortured interpretation of a single question in one study of the impact of an ad. (Cingular Brief at 76-77) Cingular also presents no testimony from actual customers regarding their expectations of coverage. Thus Cingular has no evidentiary basis for its claims about the state of the cellular phone market and the argument should be dismissed.

Even if the Commission were to accept Cingular's argument, it would simply increase the deceptiveness of Cingular's ads, materials and representations. For example, if a customer were to switch from a competing carrier to Cingular, according to Cingular this person would have expectations for Cingular's service based on what they experienced with that competitor. Thus, Cingular would have to show the Commission that its coverage was comparable to that of its competitors. But it did not.

In fact, UCAN presented unrebutted testimony that Cingular's network performance was below industry norms.[104] If anything, Cingular had a higher standard of disclosure to any customer who had used a competitors network. UCAN produced testimony from several customers stating that their coverage and service with Cingular was significantly worse than with their prior carrier.[105] These customers were part of the "switcher" market, yet their reasonable expectations about Cingular service were not met. UCAN also presented evidence from customers who assumed Cingular would work in their neighborhood, because other neighbors used their cell phones in their homes.[106] Yet Cingular did not work at their home.

2. Cingular's disclaimer defense

The essence of Cingular's disclaimer defense focuses in this disclaimer statement: "Cingular does not guarantee access to the network or service coverage in all places at all times" (Cingular Brief at 71). This defense is undermined by three facts. First, there are several ads and brochures presented here that do not have that disclaimer.[107] Not all customers received this disclaimer.

Second, the Commission must determine whether this disclaimer was prominent enough to be read. In one of the few areas where experts agreed, both Professors Pratkanis and Kamins agreed that the disclaimers were not designed to adequately convey information about the network.[108]

Third, and most importantly, the Commission must determine if this disclaimer was sufficient to put a customer on notice of ALL the limitations of Cingular coverage. UCAN submits that the Commission must find that the disclaimer failed to explain to customers that

1) its calls are blocked at higher than industry standard rates

2) its coverage is not provided in vast areas of California, including urban areas and

3) its network is not designed to provide coverage at homes or in buildings.

Notably, Cingular presents no evidence that this disclaimer was sufficient to give customers of all the myriad facts.

3. Cingular's "Everybody does it" Defense is Unsubstantiated

Cingular argues that it did the same thing as every wireless carrier ("no showing that Cingular deviated from industry practices "; Cingular Brief at 17). First, this is not relevant to determining if Cingular's acts broke the law. Second, there is significant evidence that Cingular had particular unique problems in its network[109] and, as discussed above, customers switching from other networks found Cingular's service deficient. Third, Cingular itself introduced no evidence of other provider's coverage area or customer service practices, so there is no basis in the record for Cingular's argument.[110]

Cingular also was the ONLY company that maintained a no return policy. (HT: 700- 20-25). Notably, although Cingular introduced ads from other companies, it introduced no contracts and no statements about the return polices of other companies.

D. Cingular's Poor Choices Regarding Network Improvements

Cingular final contention is that regardless of what sort of problems it may have had in the network, it has ultimately fixed them. ("When Cingular has experienced network problems, it has gone to great lengths to fix them and, ultimately, to satisfy its customers " Cingular Brief at 93). Cingular further claims that when it has problems, it "fixes them to the best of its ability" (Cingular Brief at 105)

The evidentiary record is hampered by the absence of definitive evidence that the network has been improved and the problems alleviated.[111] However, assuming that this is the case, the Commission must still deal with the qualifier "ultimately". In this case, it took over two years of customer complaints - at a minimum.

The Commission may properly focus on the steps that Cingular could have taken to alleviate customer complaints during those two years. Cingular had reasonable options that it could have exercised to have minimized or prevented the problems raised in this OII. Cingular chose NONE of these options.

1. Cingular Failed to Make Service Available on Other Networks to Cover Its Dead Zones.

At hearings, Cingular admitted that when faced with a troubled network in other parts of the country, it permitted customers to "in-market roam". In other words, it allowed Cingular customers who could not get a Cingular signal due to a weak network to use competitors systems, even if Cingular did own a network in that same region.

In Washington, . . .as a result of having a poor network, we made the business decision that in order to provide a satisfactory customer service for our customers, that we would allow our customers to roam for some period of time on the ATT network. (HT 933-934).

 

Cingular decided not to provide California customers this same benefit, believing that the network here was "competitive" (HT 934:3-7). Ironically, one of Cingular's primary customer service problems for sometime was interference from the AT&T wireless network. As explained by Cingular network engineer Jim Jacot, Cingular experienced problems when AT&T turned on its GSM system in California, the same technology used by Cingular. (HT 930-931). Customers' phones would receive a AT&T network signal stronger than Cingular's and the phone would then display "ATT" or "SOS only" on the handset. (HT 931 17-21). UCAN received numerous complaints of this problem and it was also described by customers submitting declarations.[112]

Of course, there are costs associated with allowing customers to roam on another provider's network. The competitor will charge for this service. Therefore, Cingular made a "business decision" that it would not permit the AT&T system to act as a relief valve for customers while it continued to build out its own system. (HT 933). This business decision robbed Cingular customers of a functional service while Cingular took time to build-out its network.

2. Cingular Insisted Upon Heavily Promoting Service For A Strained Network.

Cingular's own marketing expert admits that companies can control demand for products through levels of advertising spending, as UCAN reviewed in the opening brief (HT:1115:7-19 UCAN opening brief at 56). Notably, Cingular's ad spending exploded between 2000 and 2001.[113]

Similarly, it is only logical that incredibly attractive calling plans, offering "unlimited" service at very low prices, would attract more customers than more expensive plans offering fewer minutes. UCAN presented testimony from several customers who chose Cingular because of the low cost of its plans, such as unlimited "family talk" mobile to mobile calling[114]

Simply put, Cingular had many tools at its disposal to control demand on its network. Instead of using the tools to keep network demand in line with network capacity, Cingular used the tools to continue to attract more and more customers onto the network.

3. Invest in the Network Prior to or Contemporaneously to Customer Demand.

The record shows that Cingular made its most substantial investments in improving its California network only after serious problems emerged. And as Cingular states repeatedly, network improvements take time and are subject to delays which might be beyond the carriers control.[115] Therefore, the Commission could reasonably conclude that network improvement spending needs to run far ahead of increases in the customer base which may burden the network. The spending on improvements in residential areas needs to run ahead of increased promotion of family share plans and other plans which will burden network areas.

Cingular did exactly the opposite. While it increased its advertising and promotions, network spending was scaled back below what even Cingular's own engineers believed to be necessary.[116]

Cingular's opening brief bypasses any discussion on the evidence that its network spending for 2000 and 2001 were inadequate to handle the demand its attractive calling plans created. In essence, Cingular made customers the victims of its short cited practices of underfunding the network.
E. OTHER Cingular Misrepresentations About the Evidentiary Record.

The nastiness that pervades Cingular's brief is best typified by its statement that UCAN has completely discredited itself as a credible source of complaints. (Cingular Brief at 54). UCAN need not waste Commission time and attention presenting a point by point rebuttal of the distortions in pages 55-59, except to point out that Cingular had ample opportunity to depose or otherwise inquire into the declarations of all UCAN witnesses. (HT 1353-1354).

Not unexpectedly, Cingular seeks to focus on UCAN's use of relevant and revealing testimony of Deborah Davis and conveniently ignores the declarations by 24 other customers. Notably, Cingular fails to rebut ANY specific factual assertions from UCAN declarants about their Cingular experience. Cingular could have produced its own records regarding these customers, but largely choose not to. Cingular is attempting to create a smokescreen in a desperate attempt to keep the Commission from looking at the experiences that UCAN witnesses present.

IV. REMEDIES

In this section UCAN offers comments upon remedies proposed by CPSD as well as reaction to Cingular's brief discussion on remedies. Cingular declines to address any of the specific remedies raised by UCAN or articulated in the OII. [117] Where it does address remedies, it does so with impunity.

Cingular states:

"Cingular certainly shares the concerns expressed by ALJ Vieth in questions posed to Mr. Shames over the ability of the Commission to impose direct regulation over agents.[118] While Mr. Shames refused to directly answer the questions posed by ALJ Vieth, he did concede that there are limits on the Commission's jurisdiction over these third parties.[119] Cingular anticipates that UCAN will potentially revise its proposal in light of ALJ Vieth's questions and will respond to such proposal, if made, in its reply brief."

 

UCAN is compelled to point out that Mr. Shames did not "refuse to directly answer the questions" posed by the judge. To the contrary, it was answered directly, as the cited text indicates. Her question, while phrased in such a way as prevent a yes or no answer, was apt and was anticipated. Cingular's citation says more about Cingular's characterizations of transcript statements than about what record reflects.

Needless to say, UCAN has not modified its proposed remedy and had no need to do so, as will be discussed below.[120] As explained in UCAN's opening brief, the Commission has no jurisdiction over Cingular independent agents, the Commission has full authority to require Cingular to accept responsibility for the actions of its agents. (UCAN Brief, p. 6-11).

Cingular's opening brief expressly dismisses UCAN's proposed remedies as "an outline... not tied ... to any of the evidence in this proceeding" and that UCAN "may potentially modify such proposals in its briefs." (Cingular Brief at 109). The record is sufficiently clear to invalidate Cingular's characterization. However, UCAN does anticipate Cingular will argue some specific proposed remedies are preempted in its reply brief. UCAN's discussion in the legal section above is offered, in part, to address this anticipated argument by Cingular. Below, UCAN expands upon three issues raised by CPSD or Cingular in the opening brief.

A. Penalty Waiver For Cause

Cingular does raises an issue that touches on one of the remedies proposed by UCAN; specifically, the proposal that Cingular customers should be permitted to cancel "for cause" beyond the formal trial period without penalty. Similarly, CPSD addresses this matter as well in its brief. Specifically, Cingular states that "it should be evident to anyone that wireless capacity problems can happen at any time" (Cingular Brief at 104). Cingular also states that coverage is dynamic and may change "daily". (Cingular Brief at 63). CPSD supports UCAN's proposed remedy and suggests that the Commission require "some sort of ministerial or ombudsman position". (CPSD Brief, p. 59)

As explained in UCAN's brief, the Commission can not fully address the malfeasance of Cingular by simply enforcing and extending a trial period. (UCAN Brief, p. 79-83) Where a customer experiences a deterioration of service due to Cingular's adjustments of its antennae, a failure to adequately maintain its network (as occurred in 2000-2001) or the customer moving their home or office location, the trial period simply doesn't protect against the burdensome termination penalties imposed by Cingular and its agents.

CPSD's reference to an "ombudsman" raises concerns about the independence of this function. Traditionally, ombudsperson offices are part of the corporate structure and are not independent of the company; UCAN strongly believes that independence is a vital element of its proposed model. For example, the Automobile Club of Southern California provides dispute arbitration for any AAA member who has disputes with AAA-accredited auto repair services. The independence of the AAA gives the parties the assurance that the matter will be objectively assessed.

The National Association of Securities Dealers (NASD) offers arbitration for consumers who have disputes with securities dealers and claims to handle 90 percent of all such arbitrations and mediations in the United States. (http://www.nasdadr.com/whatdr.asp ). Similarly, insurance disputes in Australia are resolved by an independent office dedicated to dealing with insurance complaints. (http://www.iecltd.com.au/index2.html) In fact, both Cingular and its predecessor Pacific Bell Wireless both sought to impose independent mediation upon any customer who has a dispute with them. (Exh. 6, Coxum - Cingular Terms and Conditions; Larsen, PBW Terms and Conditions). Thus, the model is not an unusual one.

The difference in what UCAN proposes is that the Commission would establish the guideline by which an arbitration on a termination fee waiver would be conducted. (UCAN Brief, p. 81) Specifically, the Commission would order that the fact to be determined by the independent arbitration is whether the signal strength of signals to locations where the customer primarily uses the wireless service (e.g. home and office locations) adequately robust as to assure reliable and high-quality service.

B. Reparation to Customers Forced to Pay an ETF

CPSD raises the issue of reparation to customers who were subjected to an ETF. (CPSD Brief, p. 59-60).[121] This proposal is consistent with the remedies outlined in the OII as well as with UCAN's argument that the early termination fees charged by agents were not proper liquidated damages. (UCAN Brief, at 22-23 ) Accordingly, Cingular should be held responsible for the illegal acts of its agents and should be ordered to reimburse to all customers who were charged early termination fees since January 15, 2001.

CPSD's discussion is vague as to what customers should be reimbursed early termination fees. UCAN believes that the Commission must order reimbursement of ETF paid by any customer to BOTH Cingular and/or Cingular's agents. As discussed above, while the Commission may not be authorized to order agents to reimburse these monies to the customers, the Commission can require Cingular to make the reimbursement based upon its liability for its agents' actions. Moreover, Sections 451 and 453 of the Public Utilities Code bestows the Commission with the ability to full reparation to its customers for any ETF charged by an agent where the Commission were to find that because of its inadequate maintenance of its network and its failure to provide accurate information to its agents about the network, customers were wrongfully charged a rate. (See PU Code Section 453.5)

C. The Importance of Accurate Coverage Maps

 

UCAN is in full support of the proposal advanced by CPSD in its opening brief as a means of making available accurate coverage maps to the public. (CPSD Brief at 55) Cingular does take great pains to criticize the concept of publicly available maps that mimic the information actually available to Cingular engineers. (Cingular Brief at 105) It conveniently hides behind a defense that such maps could not be 100% accurate. The Commission should not allow the inability to achieve perfection to prevent it from insisting upon reasonably accurate coverage maps as a means of correcting a pattern of practice that tolerated deceptive sales practices about its coverage capabilities.

V. CONCLUSION

More than anything, this investigation boils down to the need to listen to customers. The evidentiary record built by CPSD and UCAN has presented the Commission is a formidable record of first-hand accounts by customers who have taken the time to provide detailed and painful recountings of shabby treatment they experienced at the hands of Cingular. UCAN is unaware of any investigation before this Commission in which as many detailed customer testimonials have been presented or as many customers have been affected (in excess of 144,000). We ask that the Commission listen to the detailed accounts presented by of these customers and heed their collective plea for action so that future Cingular customers need not suffer continued slights.

Cingular's defense is akin to the infamous distortion of the famous Golden Rule: "he who has the gold, rules". Cingular has the best access to the feedback that it received from its customers. It has the customer service representative records. It has the internal analyses conducted by their marketing department. It has the network tickets that signify action taken by its engineers in response to customer complaints. And it has steadfastly declined to either provide the data or provide it in an aggregated form.

This strategy is transparent; deny the Commission a clear record of what happened and to insist that the complaints have been "manufactured" and that its customers have expressed no notable dissatisfaction with its service since it assumed control of Pacific Bell Wireless in 2001. Such tactics may work in criminal courts, but they should not be tolerated by this Commission.

It is likely that the Commission will never know the full extent to which Cingular was aware of customer dissatisfaction. UCAN has offered evidence which suggests motive: the need to boost sales in order to support an oft-delayed IPO that was to be conducted in 2001 and 2002. And after the conclusion of the hearings, Cingular offered some additional clues as to the depth of Cingular customer dissatisfaction. It is contained in a press released issued on June 3, 2003 and attached as Exhibit A to this brief.[122] The press release is entitled "You talked, we listened". And it explains how Cingular has responded to its customers by spending $2.6 billion to upgrade its system in California. It touts improved customer service and better coverage. It even gives a phone number for consumers to call to get more information about network capabilities.[123]

This press release provides a glimpse into the core of the controversy in this proceeding. The public may never know the severity of Cingular's transgressions . But an adequate record has been presented by which the Commission can reasonably conclude that Cingular has systematically violated a significant number of California laws. UCAN requests that the Commission listen to the consumers who have talked. And it further requests that the Commission act to ensure that future customers need not be subjected to the frustrations, the deceptions and the out-of-pocket costs of those who have shared their stories with the Commission.

 

 

 

 

Respectfully submitted, Dated: July 1, 2003

 

 

MICHAEL SHAMES
LEE BIDDLE
UTILITY CONSUMERS' ACTION NETWORK

3100 FIFTH AVE Suite B

SAN DIEGO, CA 92103

619-696-6966

mshames [at] ucan [dot] org

 

 

 

 

TABLE OF CONTENTS

 

 

I. INTRODUCTION.. 1

II. RESPONSE TO CINGULAR'S LEGAL ARGUMENTS. 2

A. Federal Preemption Does Not Impede the Commission's Investigation. 2

B. Termination Fees and Other Billing Practices Are Not Preempted. 5

C. Public Utilities Code Section 451 is Not Preempted by Federal Law and Applies to Cingular 7

D. Public Utilities Code Section 2896 is Not Preempted by Federal Law and Does Apply to Cingular 8

E. Decision 95-04-028 and other consumer protection laws (CLRA/17200/17500). 10

III. DISCUSSION OF FACTS 13

A. Highlights of Cingular's Most Outrageous Contentions. 13

1. "There is no evidence of significant consumer problems (Cingular brief at 6) There is no showing that Cingular was actually at fault in even one complaint" (Cingular brief at 8) 13

2. "Representations of misleading advertising turned out to be false" (Cingular Brief at 12) 14

3. "CPSD/UCAN did not establish that coverage or capacity fell below customers' reasonable expectations" (Cingular Brief at 15) 15

5. "Cingular has at all times adequately disclosed the nature and extent of its service to consumers" (Cingular Brief at 16) 18

6. Cingular cannot be expected to obey "secret" rules nor can the Commission reasonably enforce such non-existent rules (Cingular Brief at 17) 19

B. Evidence Regarding the Customer Experience. 20

1. Ads for Cingular's "unlimited coverage" for which "no coverage maps is required". 21

2. No Way For a Customer to Distinguish Between Cingular-Owned Stores and Those Owned By its Agents. 22

3. Maps and Materials Given to Customers in the Store. 23

4. Cingular Did Nothing To Restrain In-Store Representations. 23

5. Customers Were Given Misinformation About Source of Reception Problems. 24

6. Customers Were Lied to About Pending Network Improvements. 25

7. Customers were Misinformed about the Return Policy. 25

8. Offers to waive terminations fees were hollow.. 26

C. Cingular's Defenses in its Brief are Not Supported by the Record. 26

1. Cingular's "Mature Market" Defense is Groundless. 26

2. Cingular's disclaimer defense. 27

3. Cingular's "Everybody does it" Defense is Unsubstantiated 28

D. Cingular's Poor Choices Regarding Network Improvements. 28

1. Cingular Failed to Make Service Available on Other Networks to Cover Its Dead Zones. 29

2. Cingular Insisted Upon Heavily Promoting Service For A Strained Network. 30

3. Invest in the Network Prior to or Contemporaneously to Customer Demand. 30

E. OTHER Cingular Misrepresentations About the Evidentiary Record. 31

IV. REMEDIES 31

A. Penalty Waiver For Cause. 32

B. Reparation to Customers Forced to Pay an ETF. 34

C. The Importance of Accurate Coverage Maps 34

V. CONCLUSION.. 35

 

 

 

 

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

 

 

Investigation on the Commission's Own Motion into the Operations, Practices, and Conduct of Pacific Bell Wireless LLC dba Cingular Wireless, U-3060,

U-4135 and U-4314, and related entities (collectively "Cingular") to determine whether Cingular has violated the laws, rules and regulations of this State in its sale of Cellular Telephone Equipment and Services and its Collection of an Early Termination Fee and other Penalties from Consumers.

 

 

 

 

 

Investigation 02-06-003

(Filed June 6, 2002)

Reply BRIEF OF UTILITY CONSUMERS' ACTION NETWORK (UCAN)

 

 

 

 

 

 

Michael Shames

Lee Biddle

UTILITY CONSUMERS' ACTION NETWORK

3100 Fifth Ave. Suite B

San Diego, CA 92103

619-696-6966

 

 

 

 

July 1, 2003

 

 

 

 

PROOF OF SERVICE

 

I, Betty Mallard, declare: I am employed in the City and County of San Diego, California. I am over the age of 18 years and am not a party to this action. On June 16, 2003, I served THE UTILITY CONSUMERS' ACTION NETWORK's REPLY BRIEF on the parties listed on the attached service list by placing a true and correct copy thereof, addressed as shown on the attached service list via first class mail.

 

 

__________________________

Betty Mallard

 

 

 

 

[1] See UCAN proposed remedies at ex. 202 Shames testimony at 56-58.

[2] 47 U.S.C. 332 (c)(3)(A).

[3] Speilholz, 104 Cal.Rptr.2d 197, 204 (Cal.App.2 Dist., 2001). (emphasis added).

[4] 801 A.2d 361 (N.J.Super.A.D.,2002).

[5] Union Ink, 801 A.2d at 366).

[6] Id at 368.

[7] Id at 374. (emphasis added)

[8] 2002 WL 31688961 (Tex.App.-Dallas Dec 03, 2002) (NO. 05-01-00552-CV).

[9] 2003 WL 21212134 (D. Kan. May 2003).

[10] Id. at *4.

[11] 248 F. Supp 2d. 885 (E.D Missouri 2003).

[12] Id. at 887

[13] Id. at 892.

[14] In the Matter of Petition of the People of the State of California and the Public Utilities Commission of the State of California to Retain Regulatory Authority Over Intrastate Cellular Service Rates (1995) 10 FCC Rcd 7486.

[15] Id at para. 64.

[16] Id at para 96.

[17] Id at para. 145.

[18] Id at para. 146.

[19] 109 F. Supp 2d 421 (D. MD. 2000).

[20] Id 109 F. Supp 2d at 423.

[21] Id.

[22] 920 F. Supp. 713, 715 (S.D Tex 1996).

[23] (C.D. Cal. 2002) 223 F.Supp.2d. 1089.

[24] Id.

[25] Id. at 1106.

[26] Speilholz, 104 Cal.Rptr.2d 197, 204 (Cal.App.2 Dist., 2001). (emphasis added).

[27] May 12, 2003 Joint Ruling Of Assigned Commissioner and Administrative Law Judge On Confidentiality Of Specified Exhibits, discussing Cingular's effort to maintain as confidential historic congestion statistics. Per the ruling, congestions statistics for the last year remain confidential (id at mimeo 9)

[28] D. 02-10-061 at mimeo 15

[29] D. 01-09-058 at mimeo 16

[30] The Appeal Court did not publish this decision. See the reference to the order in Greenlining Institute v. Public Utilities Com., 103 Cal. App. 4th 1324 at n1.

[31] The state Supreme Court rejected review on February 19, 2003, (Case Number S111976, information accessible at court websites).

[32] Schnall v. The Hertz Corp. (2000) 78 Cal.App.4th 1144, 1154 (quoting People ex rel. Mosk v. National Research Co. of Cal., 201 Cal.App.2d 765, 772 (1962).

[33] Cingular makes much of a quote from UCAN witness Shames stating this fact at hearings (HT:1325), cited by Cingular is its opening brief at 106.

[34] See D. 95-04-028, 59 CPUC 2d 192, 196-198.

[35] UCAN opening brief at 17.

[36] UCAN v. Pacific Bell, D. 01-09-058 at mimeo 17.

[37] On the issue of "puffery" in advertisements (Cingular brief at 41) UCAN is compelled to point out that all cases that Cingular cites are federal cases, and Cingular makes no showing that they express the standard under California state law. UCAN does stand behind the standards for advertising discussed in its and CPSD's briefs.

[38] 78 Cal.App.4th 1144.

[39] Id at 1149.

[40] Id at 1161.

[41] See agent contracts at ex 201, attachment 7 and ex 222, Cingular contract at ex 6 attachment customer "Coxum" material.

[42] Id at 1164.

[43] See UCAN Opening Brief at 40, discussing how only a limited number of customer complaint calls resulted "trouble tickets", yet Cingular still had 144,000 trouble tickets on OII related issues. See also discussion in CPSD opening brief at 20.

[44] See discussion at section III. E below.

[45] See UCAN Opening Brief at 40, discussing how only a limited number of customer complaint calls resulted in "trouble tickets", yet Cingular still had 144,000 trouble tickets on OII related issues. See also discussion in CPSD opening brief at 20.

[46] Fifteen presented with ex. 200, Beebe opening testimony, seven presented with ex. 202, Shames testimony, twelve presented with ex. 5, Escule testimony and the remainder in ex.1, CPSD Staff Report.

[47] Cingular deposed nineteen customers presented by CPSD (see attachments to ex. 6), deposed eleven customers presented by UCAN (see attachments 39-56 of ex. 202 Shames testimony and attachments to ex 404, Rodriguez testimony), and cross examined customer witnesses Coxum (HT 998) and Zumstein (HT 610) at hearings. Cingular also did not take the opportunity to depose or send interrogatories to customer witnesses presented by UCAN to rebut Cingular's opening testimony. (HT 1353-1354) Cingular twists its failure to depose these witnesses as a reason this Commission should not consider these sworn customer declarations (Cingular opening brief at 57).

[48] Ex 220 and discussion at HT 1125: 28-1126:2.

[49] Ex 211and discussion at HT 1113:17-18.

[50] See Bank of the West v. Sup. Ct. (1992) 2 Cal App4th 1254, 1267.

[51] See attachments to ex 38 and 39, Pratkanis opening and reply testimony, ex 202, attachment 10 and attachment 37.

[52] Exhibit 220.

[53] Ex 401c, Jacot testimony attachment 5 at 4. GAO report referenced in Cingular's opening brief describes the general two percent call blocking standard for the industry at 22.

[54] Some examples: Darrien Drucker (see declaration at ex. 200, Beebe Testimony attachment, discussion in ex. 202 Shames testimony at 38 and ex 202 attachment MS 44- Drucker deposition), Virginia Vogel (declaration at ex 200, Beebe testimony attachment, discussion in ex. 202 Shames testimony at 47 and ex 202 attachment MS 53- Vogel deposition), Mike George (declaration attached to ex 200, discussion in ex 202 p. 41).

[55] See examples: Whelan (declaration attached to ex. 200, Beebe testimony, discussion in ex 202 Shames testimony at 49, deposition at ex 202 attachment 56), Dickinson (discussion at ex 202 p. 54, declaration at ex. 202 attachment 62) and contracts including the additional termination fee of $400 (ex. 202 attachment MS-23, ex 222), O'Donnell declaration at ex 202 attachment 63.

[56] Some examples: Fraser (declaration attached to ex. 200, discussion at ex. 202 p 38, deposition at ex. 202 customer records at ex 202 attachment MS 45), Langmore (declaration attached to ex 200, discussion at ex. 202 p 44, Cingular customer records showing "system congestion" complaint at ex. 202 attach MS-50)

[57] See George (declaration attached to ex. 200, discussion at ex. 202 at 40) O'Donnell (declaration at ex. 202, attachment 63) .See also Millsap, who assumed Cingular would work in her neighborhood, since her neighbors had Sprint and Verizon phones that worked inside the home (declaration attached to ex. 200, discussion at ex. 202 at 45, deposition at ex. 202 attachment 51).

[58] Some examples, Kauffman, (declaration attached to ex. 200, discussion at ex. 202 p. 41-42, deposition at ex. 202 attachment MS 49, Cingular customer records at ex. 202 attachment MS 48) Anderson (declaration attached to ex. 200, discussion at ex. 202 at 33 and billing records at ex. 202 attachment 40) and discussion at Ex. 200 at 21. See discussion generally UCAN opening brief at 32.

[59] See ex. 202 attachment 19; Cingular wireless response to "UCAN data request three". Ex. 202 attachment 20; Earl Childers complaint as recorded by UCAN, provided to Cingular as an attachment to the Beebe opening testimony. Mr. Childers Cingular experience was also part of the news story attached to ex. 404 attachment 3.

[60] Ex. 205c, page 4

[61] Ex 401c, Jacot testimony attachment 5 at 4. GAO report referenced in Cingular's opening brief describes the general two percent call blocking standard for the industry at 22.

[62] Exhibit 202 attachment 19; Cingular wireless response to "UCAN data request three".

[63] See discussion in UCAN opening brief at 34. See ex. 202 attachment 28, press releases directed to the San Francisco, Los Angeles and San Diego areas and a copy of the San Diego letter. See also ex. 400 Ricardo Cruz testimony attachment 11, a copy of the Los Angeles letter. See exhibit 401 Jacot testimony at 16 and attachment 6 for list of jurisdiction where projects were difficult to build.

[64] The GAO report referenced by Cingular indicates that all carriers hold information about coverage areas and service levels secret. Thus a consumer has no source of any specific network information short of signing a contract and using the phone.

[65] See May 12, 2003 Joint Ruling Of Assigned Commissioner and Administrative Law Judge On Confidentiality Of Specified Exhibits

[66] See late filed exhibits 49-51.

[67] Ex. 202 attachment 37

[68] See sample ads at ex 202 attachment 10 and attachments to exhibits 38 and 39.

[69] Ex. 220.

[70] Ex. 38 attachment 1.

[71] Ex. 216.

[72] Ex. 221, ex. 202 attachments 34, 35 and HT 1249:10-13.

[73] Photos at ex. 202 attachment 35A, and ex 3 attachment 11 and 18.

[74] Cingular brief at 92

[75] Ex. 403 Testimony of Maureen Cook, at page 7

[76] Ex. 226 (Garver deposition) at 92-93

[77] Written documents showing the "no return" policy were provided to customer service representatives through the "Ask Jack" informational program (see ex. 3, reply testimony of Caceres, attachments 1- 6 and discussion starting at 2).

[78] For examples, see the Walker declaration, ex. 202 attachment 60 ; Arnold declaration, ex 202 attachment 61; Drucker declaration at 1-2 (Attachment to ex. 200, Beebe opening testimony). George Declaration at 2 (Attachment to ex. 200 Beebe opening testimony) Discussion general in Exhibit 202, shames testimony at 34-54

[79] See discussion in CPSD brief at 28 and testimony ex. 405 at 25.

[80] Schnall v. The Hertz Corp. (2000) 78 Cal.App.4th 1144, 115 (quoting People ex rel. Mosk v. National Research Co. of Cal., 201 Cal.App.2d 765, 772 (1962)) (internal citations omitted).

[81] See Bank of the West v. Sup. Ct. (1992) 2 Cal. App. 4th 1254, 1267

[82] The "no coverage map required" ad is attachment 37 to ex 202, Shames testimony.

[83] Ex. 220 contains the ad.

[84] Ex. 202 attachment 5 and 6.

[85] Ex. 401 Jacot testimony attachment 4.

[86] Ex. 38 at 12.

[87] See also Schuler declaration attached to ex. 200, Beebe testimony. Ms. Schuler could not complete a call while stuck in traffic on the way to pick up her daughter, since the system was continually busy. As a result, she could not get another person to pick up her daughter and had to pay a substantial fine to the day care center for the late pick-up.

[88] See discussion in UCAN opening brief at 46 and HT 1249:10-13.

[89] Exhibit 406 Garver testimony at 3.

[90] See UCAN opening brief at 57-58.

[91] See UCAN opening brief at 57-58.

[92] See ex. 214- a typical rate plan brochure available in stores; ex. 216, a map from Cingular's website, ex. 6, Escule Reply testimony, deposition of Dermont Delaney attachments 1 and 2- a coverage map available from a Cingular agent.

[93] See E.g attachments to ex 18, Zicker reply testimony.

[94] For example, CPSD declarant Delaney was told he could get coverage in all locations except hospitals or buildings that used to be hospitals, due to the lead in the walls. (ex. 6, Escule testimony, attach Delaney depo at p. 19).

[95] See discussion in UCAN opening brief at 63. UCAN will also let the absence of these items from the record to speak for itself.

[96] See UCAN opening brief at 56 discussing incentive programs for employees. See also discussion agent's secondary termination contracts and how they create an incentive for fraud at UCAN opening brief 66-67.

[97] See UCAN opening brief at 31 and customers referenced therein.

[98] See UCAN opening brief at 32 and customers referenced therein.

[99] See ex. 403, Cook testimony at 32.

[100] Exhibit 3, attachments 1-6

[101] Mendrano declaration, ex. 202 attachment 64.

[102] See declaration of Langmore and Whelan attached to ex. 200, O'Donnell declaration- ex. 202 attachment 63.

[103] See Dickenson declaration, ex 202 attachment 62, Green telegence notes, exhibit 213 at (u3-4) and discussion in UCAN opening brief at 67.

[104] See ex.. 200 Beebe testimony at 5 and Beebe reply, ex. 201at 4. comparing complaints received by carriers and deadzones reported by consumers at two different sources. See discussion in UCAN opening brief at 33.

[105] See George (declaration attached to ex. 200, discussion at ex 202 at 40) O'Donnell (declaration at ex. 202, attachment 63).

[106] See Millsap, who assumed Cingular would work in her neighborhood, since her neighbors had Sprint and Verizon phones that worked inside the home (declaration attached to ex 200, discussion at ex. 202 p. 45, deposition at ex. 202 attachment 51).

[107] See discussion in CPSD opening brief at 29, and, e.g. ex 202, attachment 10 and attachment 37.

[108] Exh 405 (Kamins) at 35; Exh 38 (Pratkanis) at 7

[109] See ex. 200 Beebe testimony and ex 201 Beebe reply testimony.

[110] Cingular did admit that it has access to other carriers information (HT 885-886).

[111] See discussion in CPSD brief at 48.

[112] See ex. 200 Beebe Testimony at 10, discussion in UCAN opening brief at 28, see also Millsap declaration attached thereto.

[113] See discussion in UCAN opening brief at 53, discussing ex. 202 at attachment 7.

[114] George declaration attached to ex 200, ex 202 attachment Yamamto declaration MS 58, Dermont deposition attachment to exhibit 6 at 6:6-10.

[115] See e.g. ex 401, Jacot testimony at 13.

[116] Ex. 202 attachment 13 "PBW 2001 Capital Spending."

[117] Cingular has unilaterally chose to ignore the briefing outline. At footnote 430 on page 109 of its Opening Brief, Cingular notes it has "slightly deviated from the common briefing outline by not including sections 3.B.1 - 3.B.4 as separate brief sections."

[118] Hearing Tr. Vol. 13 (Question by ALJ Vieth), 1361:14-17 ("Is it your opinion that existing law permits the Commission to restrict the termination penalties charged by Cingular's agents?").

[119] Hearing Tr. Vol. 13 (Shames), 1361:18-26 ("I think the Commission's jurisdiction is limited to that of Cingular, and I don't believe the Commission would be able to compel agents....").

[120] UCAN does provide a response to a CPSD proposal for reparation of EFT paid by customers. Based upon UCAN's analysis of Cingular's responsibility for the actions of its customers, the Commission order should require reparation for all ETF fees paid by customers to both Cingular AND its agents.

[121] UCAN did not advance this restitution remedy because it is the focus of UCAN's civil action against Cingular. However, UCAN is not aware of any legal prohibition against the Commission ordering restitution to affected customers.

[122] While normally such evidence is not attached to briefs, UCAN follows the lead offered by Cingular in its attachment of a GAO report issued after the end of the hearings. Because of the public nature of the document, UCAN submits that it is acceptable for the Commission to take notice of it.

[123] The Commission is encourage to call that number; it would afford the agency more information about the company's network than the company has been willing to publicly release in this proceeding.