BILL ANALYSIS                                                                                                                                                                                                    



                                                                       


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          |SENATE RULES COMMITTEE            |                   AB 870|
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                                 THIRD READING


          Bill No:  AB 870
          Author:   Wesson (D), et al
          Amended:  9/4/01 in Senate
          Vote:     21

           
           SENATE ENERGY, U.&C. COMMITTEE  :  8-0, 6/26/01
          AYES:  Bowen, Morrow, Alarcon, Murray, Sher, Speier,  
            Vasconcellos, Vincent

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           ASSEMBLY FLOOR  :  71-2, 5/24/01 -  See last page for vote


           SUBJECT  :    Public utilities:  automatic calling equipment

           SOURCE  :     Privacy Rights Clearinghouse
                      The Utility Reform Network
                      Utility Consumer Action Network


           DIGEST  :    This bill prohibits use of certain types of  
          automatic calling devices capable of storing and calling  
          random numbers under certain circumstances.

           Senate Floor Amendments of 9/4/01  correct a grammatical  
          error in the bill.

           Senate Floor Amendments of 8/28/01  correct a technical  
          error in the bill by removing a reference to pre-recorded  
          messages which could be interpreted to contradict a  
          prohibition in current law.

                                                           CONTINUED





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           ANALYSIS  :    Current law prohibits, with specified  
          exemptions, the use of automatic dialing-announcing devices  
          (e.g., automated dialers broadcasting pre-recorded  
          announcements) between 9 p.m. and 9 a.m. 
           
           Current law requires when such devices are used, the person  
          receiving the call must be greeted by a live operator who  
          must ask whether the called party will give his or her  
          consent to hear the pre-recorded announcement. 

          This bill prohibits, effective July 1, 2002, any person or  
          company operating an automatic dialing-announcing device  
          from making telephone connections where no live person is  
          available to greet the person called.
           
           This bill authorizes the California Public Utilities  
          Commission (CPUC) to establish, by July 2002, an acceptable  
          error rate, if any, for telephone connections made in  
          violation of the bill.
           
          This bill authorizes the CPUC to require a person or  
          company operating an automatic dialing device to maintain  
          records of telephone connections made for which no live  
          person was available to greet the person called.

           Background

           An "abandoned telephone call" is a phenomenon that occurs  
          when computers dial telephone calls quicker than the live  
          operators can pick them up in order to comply with the law  
          requiring phone call recipients to be greeted by a live  
          voice.  Such calls are the consequence of "predictive  
          dialers," a form of automated dialing where a computer  
          dials telephone numbers from a database while telemarketers  
          talk with other potential customers.  Predictive dialers  
          dial based on a statistical average of how long the average  
          telemarketer conversation will last and the likelihood a  
          person will answer his or her telephone.  Because the  
          system is based on a "statistical average," inevitably some  
          called parties are greeted by silence.

          Telemarketing has long been the subject of legislation and  
          is often associated with solicitations for long-distance  
          telephone service.  In recent years, a number of bills have  







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          been introduced in the Legislature to limit telemarketing,  
          but none of them have been successful -- with the exception  
          of a "do-not-call" list for the solicitation of electric  
          service (SB 477 [Peace], Chapter 275, Statutes of 1997).
           
          Current federal law generally conditions the use of  
          automatic dialing-announcing devices in ways similar to  
          California law.  In addition, federal law gives consumers  
          the right to tell individual telemarketers who call to put  
          them on the company's "do not call" list, which every  
          company is required to maintain by law.  However, that  
          option is of no help to people who receive calls which have  
          been abandoned by automatic dialing devices before a person  
          has a chance to ask to be placed on a "do not call" list.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

           SUPPORT  :   (Verified  8/28/01)

          Privacy Rights Clearinghouse (co-source)
          The Utility Reform Network (co-source)
          Utility Consumer Action Network (co-source)
          American Association of Retired Persons, California

           ARGUMENTS IN SUPPORT  :    This bill eliminates a  
          particularly obnoxious and abusive practice in the  
          telemarketing industry.  Most consumers are unaware that  
          "hang-up" calls are in fact computer-generated predictive  
          dialers in which the computer has connected with a phone  
          but there are no people at the other end.

          These calls are at minimum a nuisance and an invasion of  
          privacy.  Worse, they bring an element of fear to  
          vulnerable people who may think that someone is casing  
          their house for criminal activity, and calling to see if  
          someone is home, or otherwise hanging up because the wrong  
          person answers.  We have heard from many consumers who are  
          concerned about these hang-up calls.

           ASSEMBLY FLOOR  
          AYES:  Aanestad, Alquist, Aroner, Ashburn, Bates, Bogh,  
            Calderon, Bill Campbell, John Campbell, Canciamilla,  
            Cardenas, Cardoza, Cedillo, Chan, Chavez, Chu, Cohn,  







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            Correa, Cox, Daucher, Diaz, Dickerson, Dutra, Firebaugh,  
            Frommer, Goldberg, Havice, Horton, Jackson, Keeley,  
            Kehoe, Kelley, Koretz, La Suer, Leach, Leslie, Liu,  
            Longville, Lowenthal, Maddox, Maldonado, Matthews,  
            Migden, Mountjoy, Nakano, Nation, Negrete McLeod,  
            Oropeza, Robert Pacheco, Papan, Pavley, Pescetti, Reyes,  
            Richman, Runner, Salinas, Shelley, Simitian, Steinberg,  
            Strickland, Strom-Martin, Thomson, Vargas, Washington,  
            Wayne, Wesson, Wiggins, Wright, Wyman, Zettel, Hertzberg
          NOES:  Briggs, Rod Pacheco


          NC:kb  9/4/01   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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