California Senate Leader Blocks Reconfirmation of Pro Deregulation Utility Commissioner Supported by Verizon and AT&T

The leader of the California State Senate is blocking the reconfirmation of a sitting California Public Utility Commission member, Rachelle Chong:

Chong, who has been severely criticized by consumer groups, was first appointed in 2006 and had been seeking a term that would have lasted through 2014.

The decision means she will have to leave the commission at the end of the year.

Chong, who functioned informally as the Public Utilities Commission's main telecommunications regulator, had received support from the state's two largest phone companies, AT&T and Verizon, which benefited from her successful push to deregulate most land-line services.

They lobbied for her confirmation, and AT&T solicited support letters from nonprofit groups and government organizations, some of which had received funding from the company. Both phone companies also donated to a nonprofit group affiliated with Steinberg [the California State Senate President Pro Tem].

* * * * Steinberg spokesman Nathan Barankin said the problem was Chong's record, including efforts to deregulate phone services that he said could also raise rates for low-income users in the state's Lifeline program.

"We felt it was important to have a commissioner with a little more enthusiasm for consumer protection," he said.

* * * * Chong supporters say she protected consumers by capping rates during deregulation of land-line phone service and reduced a backlog of more than 25,000 consumer complaints. Consumer groups argue that her protections are coupled with giveaways for utilities, such as unlimited land-line prices after the rate caps end in 2010. They say backlogged complaints have mostly been closed without investigation.

AT&T, the state's largest phone company, had collected and given to the Senate letters of support for Chong to lawmakers from a host of grassroots organizations. Some of the groups have received donations from the company or from a technology program that it helps fund and for which Chong is an advisor.

Murray Bass, head of a small nonprofit in Northern California, wrote to lawmakers saying Chong was a strong voice for low-income seniors. But in an interview, he said he'd endorsed her at the suggestion of executives at AT&T, which has given his group money.

"There's an essential conflict of interest when a regulated -- or supposedly regulated -- entity is intervening on behalf of a regulator that's friendly to them," said Mark Toney, executive director of the Utility Reform Network, a group that opposed Chong.

Michael Rothfeld, PUC Member's Bid for Second Term Rejected, Los Angeles Times, Dec. 9, 2009.