California fines Cingular for service, policy violations

The California Public Utility Commission has fined Cingular Wireless $12.14 million for failing to provide new subscribers in the state with a trial period, even though the carrier allegedly had implemented a corporate policy that calls for a 15-day return/refund policy. The CPUC also cited Cingular for prohibiting early termination of contracts unless subscribers paid fees ranging from $150 to $550.

Cingular also was cited for failing to inform consumers of network problems it experienced in 2001 when it struggled to keep pace with significant increases in subscribers and minutes used, which the commission said were “largely attributable to Cingular’s successful advertising and marketing efforts.” The fine is the largest imposed upon a wireless carrier by the commission said CPUC spokeswoman Sherri Inouye.

In addition to the fine, Cingular was ordered to reimburse subscribers who paid all or part of the early termination fee.

Cingular said it was appalled by the ruling and would appeal it. An initial review of the ruling indicates it is “fatally flawed” from both a legal and factual perspective, according to Michael Bennett, executive director of external affairs for the carrier. “The decision goes to the unsupportable and outrageous extreme of recommending that Cingular be ordered to comply with CPUC rules that do not even exist yet,” Bennett said in a statement. He added that Cingular’s business practices are “customer-focused, lawful and fair.”

However, the CPUC said that forcing new subscribers into a contract term without benefit of a trial period would be an “unjust and unreasonable” policy because the best way for consumers to confirm that the service meets their needs is to actually use the phone. The commission said such a policy would violate the state’s public utilities code and an earlier CPUC decision.

Bennett noted that the ruling is a “presiding officer’s decision” that can be appealed to the commission. A POD would become a commission order after 30 days in the absence of an appeal by either party or by a commission member.

Ironically, Cingular is among the wireless carriers that voluntarily agreed to comply with a 10-point consumer protection code announced yesterday and developed by the Cellular Telecommunications & Internet Association. The code calls for a 14-day trial for new services purchased by consumers.