BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1383|
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THIRD READING
Bill No: SB 1383
Author: Bowen (D)
Amended: 4/29/02
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 6-1, 4/23/02
AYES: Bowen, Alarcon, Murray, Sher, Speier, Vincent
NOES: Battin
SUBJECT : Electronic mail: service providers
SOURCE : Author
DIGEST : This bill requires electronic mail service
providers to give customers at least 30 days notice prior
to terminating the customer's service, as specified.
ANALYSIS : Current law requires long distance telephone
companies to provide 30 days notice to customers before
going out of the long-distance business or discontinuing
service for an entire class of customers.
Current law provides no specific penalty for long distance
telephone companies that violate the above notice
requirement. However, penalties may be applied under the
state's Unfair Practices Act (Business & Professions Code
17000 et seq.), which allows civil penalties of up to
$2,500 to be recovered in a civil action by the attorney
general or a district attorney.
Current law requires electric, gas, heat, and water
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utilities to provide at least 15 days notice before cutting
off service due to the customer's failure to pay a
delinquent account balance.
Current law provides that public utilities that violate the
notice requirement above are subject to a misdemeanor
punishable by a fine up to $1,000 or imprisonment up to one
year, or both.
Current law requires cable and satellite companies to
provide at least 15 days notice before cutting off service
due to a customer's failure to pay a delinquent account
balance.
Current law gives city and county governments the ability
to set penalties for cable and satellite companies that
violate the above notice requirement, but limits those
penalties to no more than $200 per day, not to exceed a
total of $600 per occurrence.
Current law does not place similar requirements on
providers of electronic mail services.
This bill requires electronic mail service providers to
give customers at least 30 days notice prior to terminating
the customer's service, unless otherwise permitted by law
or contract.
This bill defines the term "provider" to mean the entity
that controls a customer's email address, but not the
entity making the underlying network or access available to
the provider or the customer.
This bill states a provider can't be held liable under the
provisions of the bill if the customer's e-mail service is
cut off because of the action or inaction of the entity
making the underlying network or access available to the
provider or customer.
This bill gives customers the right to sue a provider for
violation of the bill to recover actual damages or
liquidated damages of up to $50.
This bill provides that the remedies specified are in
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addition to any other remedies or penalties available in
law.
This bill provides that it preempts local government and
local agency rules regarding notice of email service
termination.
The bill shall become inoperative when federal law is
enacted that regulates notice requirements in the event of
termination of e-mail service.
Background :
Consumers and businesses have come to rely on email
services to conduct business, much as they rely on
telephone and other utility services. Many companies allow
customers to order products and services through email;
students enrolled in distance education programs rely on
receiving and submitting assignments electronically;
employees communicate with co-workers at offsite locations
via email; patients access their medical records via the
Internet; and many people use email to take care of
everyday business they used to handle by mailing letters
and making phone calls.
On December 1, 2001, more than 850,000 subscribers of
Excite@Home email services provided via AT&T Broadband
were cut off from service without notice and left without
Internet access for several days before being moved to a
new network. The service shut down came on the heels of
Excite@Home's September 2001 bankruptcy filing and its
failure to reach a financial agreement with AT&T, which
would have allowed for a smooth transition period for
customers to be moved to a new provider. Excite@Home was
able to reach agreements with other cable companies, such
as Comcast and Cox Communications, whose customers
experienced no interruptions in service.
Tens of thousands of customers whose services were abruptly
shut down were California residents and businesses, who
experienced problems getting customer service and technical
assistance, restoring Internet and email services on the
new network, and retrieving lost email messages and website
data.
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Many believe email service has become as essential to
conducting business as telephone and other utility services
for many individuals and companies. This bill extends
protections to email users similar to the protections
enjoyed by customers of telephone, electricity, gas, water,
cable, and satellite providers who can't shut down services
without providing adequate notice to their customers.
Related legislation :
AB 1814 (Reyes) requires Internet service providers, unless
otherwise specified by law or contract, to notify customers
30 days in advance of exiting the business of providing
Internet access services.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 4/24/02)
California Alliance for Consumer Protection
Consumers Union
OPPOSITION : (Verified 4/24/02)
American Electronics Association
Microsoft
NC:jk 5/1/02 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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