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Utility Marketing Affiliates: A Survey of Standards on Brand Leveraging and Codes of Conduct

Fortnightly Magazine - November 15 1998

certain rules imposed by the Federal Communications Commission.

On the other hand, Virginia ruled in a GTE case that where the carrier cannot provide branding for others it must unbrand operator services and directory assistance for all carriers' customers, including its own. Kentucky requires Bell South to unbrand or rebrand only those services it brands for itself. Ohio adopted a case-by-case approach with Ameritech, while Wisconsin %n3%n has required Ameritech to rebrand its operator and directory assistance services. Colorado and Montana do not require branding vehicles or employees (clothing) that go out into the field to serve customers, but employees must tell the customer that they are appearing on behalf of the competitor carrier. Florida requires that unbranded information (e.g., repair slips) be left with customers. Missouri and Texas allow Southwestern Bell employees to identify themselves that way but require that they say for which company's behalf they are there and that they leave generic documentation with space to fill in the competitor's name. In a case involving U S WEST and AT&T, Idaho %n4%n took a similar position, adding that the local carrier must abstain from making disparaging remarks about AT&T, "selling its own services in the course of a customer premises visit," and must leave behind AT&T-supplied documentation.

Learning from Gas

In the natural gas industry, PUCs have recently faced the issues of branding and the appropriate intracorporate relations between utilities and their affiliates, often on the introduction of pilot retail access programs. The decisions are varied, but brand name usage by the incumbent local distribution company is commonly allowed (there appear to have been only two instances where it was not). Codes or standards of conduct are almost always employed. These sets of rules are often modeled after Federal Energy Regulatory Commission Order 497 but generally are more comprehensive, obligating regulated gas utilities to provide the same services, information, and pricing terms to all marketing entities (em theirs and others (em as well as restricting personnel deployment, establishing complaint procedures, and allowing for reporting and audit oversight.

Pennsylvania %n5%n established an "Interim Code of Conduct" for natural gas competition requiring complete separation, no staff sharing, comparability of treatment, no joint marketing, and no dealing on inside information. Staff members report that, nonetheless, independent marketers "are complaining everywhere."

Maryland, %n6%n on the other hand, established a "generic code of conduct" prohibiting joint management for high level executives but not others. No structural separation was required on the grounds that certain efficiencies would be lost and that in any event the existence of performance-based regulation would control the problem of transfer price inflation. Complaints are to come directly to the PUC, and a pattern of violations could force divestiture of affiliates. A Maryland commissioner reports that gas marketers seem to be satisfied with the arrangements.

Massachusetts %n7%n created a code of conduct through a collaborative with interested parties, drawing in part on experience at the Ontario Energy Board. Under its rules, the marketing affiliate of Boston Gas can say, "We're an affiliate of Boston Gas," but cannot say, "We're Boston Gas