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Perspective

Fortnightly Magazine - December 1997

Amendment. Rejecting the "offensive assumption" that the public will respond "irrationally" to the truth, the court stated that "[t]he First Amendment directs us to be especially skeptical of regulations that seek to keep people in the dark for what the government perceives to be their own good."

In expressly applying this doctrine to commercial speech, the court advised that the "commercial marketplace¼ provides a forum where ideas and information flourish. Some of the ideas and information are vital, some of slight worth. But the general rule is that the speaker and the audience, not the government, assess the value of the information presented. Thus, even a communication that does no more than propose a commercial transaction is entitled to the coverage of the First Amendment."

Sharing Information With Competitors

Still others have proposed that a utility should be prohibited from disclosing any information to a marketing affiliate unless that same information is communicated contemporaneously to competitors. The assertion is that to do otherwise would afford the affiliate a competitive advantage.

In fact, such a proposal places the marketing affiliate at an express disadvantage.

Utilities possess vast quantities of data, not all of which is well-organized. Determining what data is useful and how to manipulate it will become an element of each marketing company's strategy. Some companies will prove more adept at "reading the numbers" than others, allowing them to develop marketing plans that take advantage of opportunities that may not have been visible to competitors. Marketers are likely to target different market segments, requiring specific information to support the targeted market. Even if marketers choose to compete for the same class of customers, each marketer may seek different data to develop its marketing strategy. By disclosing the specific information sought by the marketing affiliate, a utility could be revealing its marketing plan or results of data research that should rightly be considered commercially sensitive.

Mandatory sharing would reveal commercially sensitive information to every marketer - the antithesis of what is needed to develop competition. Rather, the utility should not disclose the specific information sought by any marketer, including that sought by its affiliate, so long as the entire body of information is equally available to all marketers that request it.

Joint Sales Activities

Some marketing competitors have proposed rules that would restrict the activities of a utility's marketing affiliate but not its competitors. For instance, prohibitions on joint sales calls by the marketing company and the affiliated utility have been proposed. So have restrictions on joint promotions between the utility and its marketing affiliate, such as the inclusion of flyers for the marketing company in the utility's bills.

Such prohibitions violate the principle that utilities must provide equitable treatment for all marketers. Not only should the utility offer services to its affiliates in the same manner as for competitors, but the converse is true as well: The utility should be required only to provide to its affiliate's competitors the same products and services that it is allowed to provide to its marketing affiliate.

There is every reason to believe that the utility