Tag Archives: Rachelle Chong

A Victory for Consumers: Senate Rejects Rachelle Chong

See also Paul Hogarth’s diary on this subject.

Rachelle Chong has been a controversial figure in California’s telecom world for a while now. She was appointed by Gov. Schwarzenegger to replace Susan Kennedy when Kennedy was named CoS. Earlier this week, Sen. Steinberg declined to schedule a hearing before the Rules Committee, effectively blocking her confirmation.  The reason for the denial? Simple, she was an instrument of industry, even comparatively in a body that is always faced with charges of industry capture

The Utility Reform Network, or TURN, a San Francisco-based consumer group, has opposed Chong for taking the lead role for what they described as industry-friendly regulations deregulation, including rules to boost basic rates by $3.25 last January, $3.25 next month and a removal of the rate cap in January 2011. Telecommunications companies have supported her. (CapWeekly)

Not only did she work to get rates increased, but this little story is rather amazing in not only its audacity, but also its ramifications.

Chong drew fire at her first confirmation hearing in 2006 for inserting last-minute language into a complex, 282-page proposal dealing with telephone-company deregulation.

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“At the last minute, and at the last day, this particular paragraph was inserted that let AT&T out from under [the regulations]. The way this was slipped into the decision was not acceptable,” said Commissioner Geoffrey Brown, who later co-authored an impassioned, scathing dissent. He voted in favor, he said, “but I didn’t know what was in there. Nobody knew what was there.

Chong, and her staff, defended the language, but it just isn’t believable.  Despite the telecoms best efforts to get Chong approved, and boy did they try, it looks like she won’t be remaining on the PUC.

Also, Chong isn’t the only nominee up for confirmation, as Board President Michael Peevey’s fate is also up in the air.  Keep an eye out on that nomination.  The early money is on his confirmation. Considering Chong’s rejection, I kind of doubt that the Senate will come in with both guns blazing. It just doesn’t play to type.

Steinberg Stands With SRO Tenants Against AT&T

State Senate President Darrell Steinberg has announced that the Senate Rules Committee will not hold a hearing on CPUC Commissioner Rachelle Chong before the end of the year – effectively killing her confirmation.  For low-income residents and consumers, this is wonderful news.  Chong used her position at the CPUC to sponsor an AT&T-backed proposal to de-regulate the state’s Universal Lifeline program – which would have meant thousands of Californians losing basic telephone service.  The Central City SRO Collaborative spent months turning out tenants against this proposal (with invaluable help from TURN), and Chong paid a heavy price for it by losing her job.  An Astroturf campaign by Verizon and AT&T wasn’t enough to save her, and the message it sends to the CPUC is – “Don’t mess with Lifeline!”

SRO tenants never thought they would venture in the world of CPUC appointments, but the campaign to save Universal Lifeline inevitably took them there.  For a flat monthly rate of $6.11, low-income people can get a basic “no-frills” phone line that helps them keep in touch with doctor’s appointments, job interviews and loved ones – or to handle emergency situations.  The Central City SRO Collaborative has signed up tenants onto Lifeline for years – so when TURN told us it was in jeopardy, we jumped into action.

The California Public Utilities Commission (CPUC) is one of the most powerful state agencies, but its Commissioners keep a low profile.  And when there isn’t much public attention, companies that the Commission regulate and stand to gain billions run the show.  Rachelle Chong has functioned as the CPUC’s unofficial telecommunications “expert” – and is close to telecom giants Verizon and AT&T.  When AT&T wanted to de-regulate Lifeline, Chong was the Commissioner they asked to submit their proposal.

For the Central City SRO Collaborative, testifying at the CPUC was a new experience.  We would bring Lifeline customers out to their hearings to speak against the proposal, and at every meeting the Commissioners would postpone the vote.  It began to look like a common delay tactic we see in many corrupt government bodies – keep putting off the decisions until the poor people get tired of always having to come back.  Problem is, we just kept turning out every time.

The CPUC finally realized in July that we weren’t going anywhere – so Chong temporarily “shelved” her proposal to re-write it.  Of course, she was hoping the issue would quiet down until after her confirmation sails through.  After all, most people don’t know who is on the CPUC – so who’s going to stop her from getting re-confirmed in Sacramento?  With AT&T and Verizon lobbying heavily on her behalf, she could take up the proposal later.

The Governor appoints CPUC Commissioners, but the State Senate must confirm them.  Chong had provoked us by attempting to de-regulate Lifeline, and it turns out that she had angered other grassroots organizations as well.  We may have blocked her proposal to de-regulate Lifeline temporarily, but our leverage depended on blocking Chong’s confirmation.

TURN did an excellent job assembling a grassroots coalition to lobby the State Senate Rules Committee.  It was the first time that all three major consumer rights groups in the state (TURN, UCAN and Consumer Federation of California) worked together to oppose a CPUC Commissioner.  Seventeen groups (including our organization) that represent low-income communities and people of color sent letters against Chong’s confirmation.  We were joined by 3 faith-based organizations, 3 environmental justice groups, five small business organizations and three labor unions (including the Communication Workers.)

Chong had her own set of trade associations and non-profits write letters to the Senate Rules Committee on her behalf.  What did virtually all of them have in common?  They took generous donations from AT&T.  When the Los Angeles Times interviewed one of these non-profits, the director admitted he endorsed Chong upon the advice of AT&T executives – who had given the group money.  It was an Astrotruf campaign.

We expected the Rules Committee to hold a hearing this week – and were prepared to bring a busload of Lifeline customers to testify.  Then, we heard the hearing would be postponed until next week. Yesterday, Darrell Steinberg’s office announced there would be no confirmation hearing for Chong. “We felt it was important to have a commissioner with a little more enthusiasm for consumer protection,” said a spokesperson.

“This is exactly the way the confirmation process is supposed to work,” said Sam Kang, managing attorney of the Greenlining Institute, which had been part of  our coalition.  “Rather than rubber stamp the Governor’s choice the Committee investigated and reached its own conclusions.  The evidence was overwhelming that Ms. Chong’s decisions have had a disastrous impact on low-income communities and people of color.”

Without a confirmation hearing, Chong will be off the CPUC by the end of the year.  It’s true – of course – that Governor Schwarzenegger will now get to appoint someone else, and we don’t know who that will be.  But the Senate Rules Committee would have to confirm that person, and we are grateful that Darrell Steinberg stood up for consumers.

Regardless of who replaces Chong, the message for the CPUC is clear.  If you mess with a program that helps thousands of low-income residents have basic phone access that the rest of you take for granted, we will take you out.  Remember that you serve the people!

Broad Coalition Fights to Block CPUC Commissioner Chong

(I’ve been meaning to promote this for a couple of days. Confirmations don’t always get the level of attention they should. – promoted by Brian Leubitz)

Low-income telephone customers won a brief reprieve last month, after the California Public Utilities Commission temporarily shelved a dangerous plan to gut the Universal Lifeline program.  But the battle is far from over.  While the AT&T backed plan is being “re-written” at the CPUC, the measure’s sponsor – Commissioner Rachelle Chong – is up for a confirmation vote by the State Senate to a full six-year term.  Yesterday, a diverse coalition of advocates went to Sacramento to lobby against Chong’s re-appointment.  Two residential hotel tenants from the Central City SRO Collaborative who were selected by their peers to go joined senior advocates, consumer groups, Latino leaders and faith based groups – to express strong opposition to a Commissioner who has disregarded the CPUC’s mandate to protect consumers.  After a grueling day at the State Capitol, we met with four of the five members of the Senate Rules Committee – and all four of San Francisco’s delegation in the legislature.  “I’m impressed,” said State Senator Gil Cedillo (D-Los Angeles), after we told him who else we had met with that day.  “I can’t even get a meeting with four of my colleagues in one day.”

The California Public Utilities Commission is one of the most powerful bodies in the state, with a budget as large as the state General Fund.  The five CPUC Commissioners are supposed to look out for consumers and regulate utility industries, but too often fall under the influence of PG&E and AT&T.  Appointed by the Governor to a six-year term, the only “check” on the CPUC’s power is a confirmation vote by the State Senate – but rejections almost never happen.  But we were going to try to stop Commissioner Chong.

Universal Lifeline is a program mandated by the state legislature – but regulated by the CPUC – which provides a “no-frills” telephone line at an affordable rate of $6.11/month – allowing poor people to keep in touch with doctor’s appointments, job interviews and loved ones.  But Commissioner Chong’s proposal replaced the flat rate with 55% of the highest market price (when AT&T has jacked up telephone rates.)  Only after hundreds of seniors and low-income tenants representing various organizations spoke out at multiple hearings did the CPUC suspend this proposal, but it will be back after Chong gets confirmed.

For Catalina Dean, who lives at the McAllister Hotel – where her income is $104/month under Care Not Cash – the idea of keeping Chong on the CPUC is absurd.  “What else is her job,” she asked, “if it’s not to look out for low-income people who need a phone?”

But other groups oppose Chong’s confirmation.  For the first time ever, the largest three consumer rights groups in California – TURN (The Utility Reform Network), UCAN (Utility Consumer Action Network) and the Greenlining Institute – are working together to oppose a CPUC nominee.  Hene Kelly of the California Alliance of Retired Americans (and San Francisco Senior Action Network) also joined us on the lobbying trip to oppose Chong, as did Minister L.B. Tatum of the Los Angeles Metropolitan Churches.

And Chong has alienated many ethnic-based groups who had once supported her on the CPUC to represent their community interests.  “When the Governor appointed Chong in 2005 [to complete Susan Kennedy’s unexpired term],” said Sam Kang of the Greenlining Institute, “a lot of us supported here confirmation.”  But leaders like Faith Bautista of the Mabuhay Alliance, and Viola Gonzales of the Latino Issues Forum were there to explain how Chong had not reached out to their communities.  “When I complained to Chong about diversity issues,” said Kang, “she said that it’s not her job to ‘enforce quotas.'”

Chong has also broken earlier promises, such as: (a) restoring consumer protections against deceptive AT&T marketing practices, (b) convening public hearings to solicit input for basic phone service and (c) protecting limited English proficient customers by requiring companies to provide contracts in the same language as marketing materials.

Our delegation met with the four state legislators who represent San Francisco – Senators Mark Leno and Leland Yee, and Assemblymembers Fiona Ma and Tom Ammiano – all of whom had submitted letters to the CPUC opposing Chong’s deregulation of Lifeline.  Although none of them are on the Senate Rules Committee, we dropped by to thank them for their support – and to ask them to help persuade their colleagues to oppose Chong.

We also met personally with four of the five members of the Senate Rules Committee – Democrats Darrell Steinberg (who is also President of the State Senate), Jenny Oropeza and Gil Cedillo, and Republican Bob Dutton.  We also met with the Chief of Staff of Republican Senator Sam Aanestad.  Before the State Senate gets to vote on Chong’s confirmation, it must first pass a hearing at the Senate Rules Committee – when our delegation will return to Sacramento, and speak out during public comment.

Chong’s confirmation was scheduled for next week’s Senate Rules Committee.  But the hearing has now been postponed – along with all of Governor Schwarzenegger’s appointments – due to State Senate President Darrell Steinberg’s strong disapproval of Arnold’s “blue-pencil” budget cuts that hurt the most vulnerable Californians.  Steinberg and other Democrats have filed a lawsuit against the Governor, alleging that these cuts are unconstitutional.  I thanked Steinberg for his leadership on Arnold’s budget cuts, and reminded him that Chong’s actions at the CPUC are hurting the very same people.

The other two Democrats on the Committee might vote “no” on confirming Chong.  Gil Cedillo has long been a champion for the poor (such as his controversial legislation to ban “patient dumping”), and we hope he will take a similar stand on CPUC appointees who are messing with Lifeline.  Jenny Oropeza has also been willing to take a stand on commissioners.  For example, she recently blocked the confirmation of a homophobic appointee to a public safety commission.  We hope she will also do the right thing here.

By being the point-person for deregulating Lifeline telephone service, Commissioner Rachelle Chong has jeopardized her tenure on the CPUC.  And for low-income people across California who are struggling in this economy, they’d be glad to see her go.

Paul Hogarth is the Managing Editor of Beyond Chron, San Francisco’s Alternative Online Daily, where this piece was first published.