Obscure effort to charge for unlisted numbers leads to ferocious lobbying fight in Capitol

What began as a little-noticed, consumer-backed attempt to prevent telephone companies from forcing their customers to pay for the right to keep their numbers unlisted has erupted into a full-press lobbying fight–financed largely by telephone companies–that astonished even Capitol veterans.

At one point, according to a lobbyist familiar with the issue, there was one lobbyist assigned to each of the 15 members of the Senate Appropriations Committee as the telephone companies and their allies sought to thwart the plan proposed by Sen. Sheila Kuehl, D-Santa Monica. “I’ve seen assigning a lobbyist to each member of a committee on a big bill, but Appropriations has 15 members,” the lobbyist said. “They (the phone companies) have hired half the lobbying world.”  

Kuehl’s bill, SB 1423, would prevent telephone customers from having to pay to keep their telephone numbers private. Currently, AT&T’s land-line customers pay about $1.25 a month to keep their numbers unlisted, and some other, smaller companies charge nearly $2—charges that in some cases have increased four-fold or more since the market was deregulated two years ago.
Customers are not charged if they allow their numbers to be listed in telephone books and with directory assistance. Cellular phone numbers are not listed.

The bill is opposed by AT&T, the largest player in California’s telephone market, and a coalition of companies and businesses that includes Verizon, Frontier, SureWest and the state Chamber of Commerce. Their lobbying firms and advocates include some of the most powerful in the Capitol. The list includes Manatt Phelps, Aaron Read, Kahl Pownall, Platinum Advisors, former Sen. Richard Polanco, Lang Hansen O’Malley and the Flanigan Law Firm.

The bill would “engage the Legislature in selective rate-setting that fails to consider the broader policy questions surrounding universal service,” as well as “contradict approximately 80 years of public-policy decisions and turn the notion of universal service on its head,” AT&T’s William Devine wrote lawmakers. “Clearly, this major shift in public policy should require a review by the CPUC with a report back to the Legislature.”

The communications industry coalition said they were unaware of any consumer unhappiness with charging for unlisted numbers.
“Companies are not aware of any consumer complaints regarding the charge for having their numbers unpublished or unlisted or that being published is a violation of their privacy,” the eight-member coalition told the Appropriations Committee.

Opponents aren’t buying it, noting that the fees for keeping numbers unlisted total about $70 million annually and that unlisted numbers can’t be sold or resold to marketers—an additional source of income.

They believe it is a privacy issue, question the propriety of seeking the PUC’s involvement and believe phone companies are being allowed to charge customers for essentially doing nothing. And they contend that Democrats and Republicans have told them privately that they like the bill but fear the combined lobbying clout of the communications companies.

That clout included intervention from an unexpected source, according to two Capitol staffers and a lobbyist familiar with the issue.
Public Utilities Commission President Michael Peevey reportedly called Senate Leader Don Perata and asked him to intervene by ordering the bill removed from the Appropriations Committee calendar. Perata asked Kuehl to remove the bill—which she did.

Peevey, through his press office, declined to be interviewed for this story; Perata also was unavailable.

Kuehl said her bill was a necessary protection for consumers.

"I know the telephone companies have been focused on making as much money as they can since all of their services were deregulated. They have applied themselves very energetically to raising the price of an unlisted number," Kuehl said. 

Supporters include the Utility Consumer Action Network, the PUC’s Division of Ratepayer Advocates, the Privacy Rights Clearninghouse and others.

“They (the telephone companies) were just using their raw power to prevent a vote. There is not one argument on the merits, and this is overkill. But I think righteousness will prevail,” said consumer lobbyist Lenny Goldberg.

Appropriation committee staff members had considered designating the bill as having little or no fiscal impact —a move that would have made the bill's path through the Legislature much easier. Ironically, the Appropriations Committee received the bill in the first place apparently because of an error: The Legislative Counsel’s office made a procedural mistake in “keying” the bill, a move that put it into Appropriations.

The PUC president said the bill did indeed have a fiscal impact, about $220,000 for the administrative costs associated with changing the current rules. If that were true, the bill would be subject to fiscal hearings.

In the end, the bill was hastily shunted to the five-member Rules Committee, headed by Perata, where its fate was uncertain. Capitol staffers believe the bill could be sent to the Senate floor as early as next week—or it could be held indefinitely. If it emerges from the Senate, however, it faces another round of fighting in the Assembly.