Released: September 20, 2006

AT&T won’t follow California marketing directive

Source: By David Lazarus, San Francisco Chronicle

Five years ago, AT&T was fined millions of dollars and was required to adopt strict disclosure requirements after state regulators determined that the company had engaged in misleading marketing practices. Last week, AT&T told the California Public Utilities Commission in a regulatory filing that it will no longer follow those requirements.

The telecom giant is taking advantage of new rules that allow California phone companies to unilaterally change certain regulatory provisions without prior approval from state officials.

AT&T says the disclosure requirements, which forced the company to always reveal to new customers its cheapest service first and to seek permission before making marketing pitches, made it too difficult to interact with consumers.

“We felt this wasn’t fair to customers,” said Gordon Diamond, an AT&T spokesman. “We wanted to streamline the process to make it faster and easier for people to sign up for new service.”

But consumer advocates and at least one member of the PUC counter that the disclosure requirements were imposed for a reason - because AT&T had deliberately misled people by steering them into costlier service packages.

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