BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 870| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 AB 870 Page 2 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 AB 870 Page 3 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, AB 870 Page 4 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 **** END ****