CPUC votes to let telcos fine themselves, keep the money

by Steve Blum • , ,

Miss me yet?

In the most cynical decision I’ve ever seen the California Public Utilities Commission make, telephone companies will be allowed to pay fines to themselves, if they fail to meet service quality standards.

Fines, it seems, are just another cost of doing business for telecoms companies and don’t matter anyway. So why not let them keep the money?

Boiled down, that’s CPUC president Michael Picker’s rationale for establishing new telephone voice service level requirements backed up by a swingeing schedule of penalties and then saying but we’ll let you keep the money if you invest it in infrastructure or pay staff. Or something. Anything.

No kidding. That’s what last week’s decision says

Carriers may propose, in their annual fine filing, to invest no less than twice the amount of their annual fine in a project (s) which improves service quality in a measurable way within 2 years.

Commissioner Mike Florio was quick to – correctly – point out that the policy is unenforceable. Even hefty fines are trivial compared to, say, AT&T’s annual capital and operating budgets in California. Concocting an “incremental expenditure” two years down the road, based on last year’s budget, is a trivial accounting exercise. AT&T will leave it to the summer interns to figure out.

A rational alternative was offered by commissioner Catherine Sandoval. She proposed a system of simple fines and a more granular reporting system, to make sure big outages in small rural communities, like Selma in Fresno County, don’t disappear under an avalanche of average results from Los Angeles or San Francisco.

Picker didn’t even bother to bring Sandoval’s alternative up for a vote. He knew he had yeses from commissioners Carla Peterman and Liane Randolph in his pocket, so he put his version on the table and called the roll: Picker, Randolph and Peterman, yes; Sandoval and Florio, no.

With that three to two vote, the matter was closed and AT&T, Frontier and the scattering of rural telephone companies in California will be left to slap their own wrists when service doesn’t measure up to the standards that remain.

I was never a summer intern for AT&T. I was a summer intern for Bell Labs, which was only half owned by AT&T. The other half was owned by Western Electric. Which was owned by AT&T. Which also owned Southwestern Bell. Which AT&T had to divest so Southwestern Bell could buy AT&T. Which proves I was never a summer intern for AT&T.