BILL ANALYSIS
SB 1601
Page 1
Date of Hearing: June 17, 2002
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Roderick D. Wright, Chair
SB 1601 (Bowen) - As Amended: April 1, 2002
SENATE VOTE : 23-13
SUBJECT : Cellular telecommunications service.
SUMMARY : Requires a 30-day period to rescind cellular service
and equipment. Specifically, this bill :
1)Requires every cellular service provider to allow a 30-day
grace period to all new cellular service customers, within
which a customer may rescind the agreement and terminate
service without any cost or penalty, if the customer finds
that the cellular service quality is unsatisfactory.
2)Directs that every new cellular service agreement shall
provide reasonable notice of this 30-day grace period.
EXISTING LAW :
1)Provides for licensure of cellular phone service providers
through the Federal Communications Commission.
2)Empowers the California Public Utilities Commission (PUC) to
regulate telecommunications services.
FISCAL EFFECT : Unknown.
COMMENTS :
Author's statements and purposes
According to the author, the goal here is to give people
information they need make sure they'll get what they pay for
when they sign a cellular service contract. A prospective
cellular phone customer can't rely on the coverage maps provided
by the cellular carriers because they all contain disclaimers
that the map is not a guarantee of service availability or
quality. In the absence of accurate maps, the only way for a
customer to know if the cellular phone meets their needs is to
use it for a period of time. If a customer is required to sign
SB 1601
Page 2
a long-term contract to obtain service, that customer is
potentially stuck if he or she finds the service is less than
was advertised or promised. The goal of this bill is to provide
customers with a reasonable way out of that long-term commitment
if the product they're buying doesn't live up to their
expectations or to the promises made by the carrier.
If cellular service coverage maps could be made more accurate
and if the "test drive" in the store could account for the
topography, underpasses, tunnels, buildings, trees, atmospheric
disturbances, other radio signals, and intensity of usage
challenges that a customer will face out on the "open road,"
there would be no need for a grace period because the customer
would be able to make an informed choice right in the store.
Since that isn't an option, the author believes the next best
solution is to allow customers to rescind their contracts if the
service proves to be unsatisfactory. This bill gives customers
30 days to rescind the contract.
Return / cancellation policies
Some cellular carriers already provide customers with a grace
period during which they can choose to cancel the service
contract. For example, AT&T Wireless gives customers a 30-day
grace period and Verizon has a 14-day great period. Cingular
allows a 15-day return period on cellular equipment.
As written, this bill gives rise to an issue regarding who would
be responsible for the minutes of air time used if a customer
exercised the right to rescind the deal as provided for in this
version of this bill. A person inclined to take unfair
advantage of the provisions of this bill could purchase a phone
and a service contract, talk for extended minutes, and return
the phone for a refund before the 30 day period runs. This
could be repeated using a different dealer or wireless carrier.
The author or the committee may wish to consider an amendment
clarifying that a customer has a right to cancel an agreement,
but is nevertheless responsible to pay for air time minutes used
prior to cancellation.
Opponents to this bill object to a 30-day recission policy,
believing that a lesser period of time is sufficient for a
customer to ascertain if the phone service works. Opponents
also believe any cancellation policy enacted in this bill should
not extend to business customers.
SB 1601
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REGISTERED SUPPORT / OPPOSITION :
Support
Office of Ratepayer Advocates
Opposition
Cingular Wireless
Leap Wireless International, Inc.
Advancing the Business of Technology
Nextel Communications
Sprint
Verizon Wireless
56 individual Cricket wireless telephone dealers
Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083