Service Quality and Consumer Protections

Background

Consumers expect and deserve reliable, safe, and affordable utility service. It is essential to health, safety, and economic welfare. State customer service quality and consumer protection regulations help protect consumers from inadequate service, fraud, misrepresentations, unfair trade, and deceptive advertisements and practices. Effective protections provide criteria for customers and regulators to use in assessing the quality of consumer experiences with service providers; repair, service, and office staff; and network performance. Such regulations are commonplace for industries that affect public safety and economic prosperity, such as automobile safety regulations that set minimum safety equipment standards. The adoption of minimum standards gives providers clear service objectives and establishes guarantees for which their customers can hold them accountable. Creating a standardized set of statistical measures also enables consumers to compare providers more fairly.

Service Quality and Consumer Protections: Policy

High-quality service for all

In this policy: FederalLocalState

Policymakers should ensure that every consumer has access to reliable, safe, and high-quality utility and telecommunications services at just, reasonable rates, terms, and conditions. All consumers should be entitled to minimum service standard protections.

Policymakers should ensure that consumers have timely and consumer-friendly means of redress for billing disputes and other problems with their telecommunications or utility service.

Policymakers should establish rights and protections for consumers facing termination of service.

Regulators should regularly compile and report the complaints they receive about essential utility and telecommunications services.

Policymakers should ensure that telecommunications, natural gas, electric, and water bills contain complete and clear descriptions of all charges listed and that they clearly identify the service provider responsible for each charge.

Protection from “slamming” and “cramming”

In this policy: FederalLocalState

Regulators should:

  • fully enforce existing laws and regulations against slamming (switching a customer to a competing provider without authorization), cramming (adding services to an account without authorization), and other deceptive marketing practices;
  • require service providers to obtain clear, verifiable, and recorded authorization before changing any consumer’s telecommunications, natural gas, or electricity provider;
  • impose substantial penalties on companies that engage in slamming, cramming, and other deceptive marketing practices; and
  • ensure that consumers who have been slammed or crammed do not have to pay for any resulting charges and receive full refunds on any payments for unwanted services.

Ensuring consumer protections in utilities

In this policy: FederalLocalState

Policymakers should prohibit the imposition of:

  • mandatory binding arbitration (see Chapter 12, Personal and Legal Rights—Pre-Dispute Mandatory Binding Arbitration),
  • unfair early termination penalties, and
  • separate monthly line-item charges, surcharges, or other fees on customers’ bills unless such charges have been expressly mandated by law.

Regulators should monitor—including through audits—sales and marketing practices to detect and deter misleading practices.

Policymakers should commit to data-driven, evidence-based decisionmaking.

Policymakers should ensure that any utility provider that issues its customers an electronic bill also provides customers, upon their request, a free paper copy of the customer’s regular bill each billing cycle.

Ensuring high-quality telecommunications service

In this policy: FederalLocalState

Policymakers should:

  • ensure that basic telecommunications service quality remains high even as incumbent telecommunications carriers deploy new technologies and services;
  • publish service-quality data;
  • establish a baseline performance level for each incumbent local-exchange carrier that reflects its recent performance (or a higher performance level if regulators determine that the company’s historic performance is inadequate), with any penalties incurred under these inadequate performance levels returned to customers in the form of bill credits;
  • protect consumers from bearing the cost and risk of telecommunications carriers’ entry into new markets; and
  • ensure that regulatory agencies have the authority and resources to monitor competitive conditions and require remedial actions across all communications providers and technology platforms.

Ensuring high-quality energy service

In this policy: LocalState

State policymakers should establish basic service-quality standards for all energy utilities. These standards, at a minimum, should:

  • adopt specific and enforceable reliability standards and reporting requirements for routine maintenance;
  • post publicly monthly service-quality data and report them to state regulatory commissions;
  • establish a baseline performance level for each company that reflects its recent performance (or a higher performance level if regulators determine that the company’s historical performance is inadequate). Any penalties incurred under such inadequate performance should be returned to customers in the form of bill credits;
  • ensure that in any year in which it is assessed penalties, each energy utility informs its customers of its failure to achieve the baseline level of service quality; and
  • adopt specific standards for major storms and widespread outages, and require timely reporting and review of the response to major storms.

Policymakers should establish and adequately fund consumer education and outreach programs to maximize the public’s understanding of its rights and obligations with regard to utility service quality.