BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
AB 909 - Reyes Hearing Date:
July 8, 2003 A
As Amended: July 2, 2003 FISCAL B
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DESCRIPTION
Current California telecommunications policy calls for customers
to be given sufficient information to make informed choices and
the establishment of processes for equitable resolution of
billing and service problems.
California law , as of January 1, 2004, will require cellular
telephone service providers to establish a means by which
customers can obtain current information on their calling plans
and usage.
This bill finds the telecommunications industry is evolving
towards bundled service offerings, that customers have a right
to make informed decisions, and that customers can only do this
if they're able to determine how much they're being charged for
local and long-distance calling.
This bill requires every provider of local telephone service to
provide customers who buy a bundle of both local and
long-distance services with information showing the estimated
charge for local service and the estimated total monthly usage
for long-distance service.
This bill sunsets on January 1, 2007.
BACKGROUND
Increasingly, telecommunications companies are bundling their
service offerings, providing a discount to people who buy a
package of services. Some of those bundled service offerings
include flat-rate pricing where the customer can use all the
phone service they want for a fixed charge. MCI and Verizon,
for example, allow unlimited local and long-distance calling for
about $40 month.
These programs don't provide customers with individual call
detail (e.g. time of call, destination, duration), because that
information is arguably immaterial since the customer is paying
the same fee every month regardless of what time they make a
call, where they call, or how long they stay on a particular
call. Not having to track those details and provide the
information to customers arguably lowers a company's costs,
which may be reflected in the price of the bundled plan offered
to customers.
This bill deals with two separate issues, both related to
customer information. The first issue is the bundling of
services, and whether a customer should be able to identify the
separate prices for the individual services. The second issue
deals with flat rate pricing, and whether a customer should be
able to know how much of a service (e.g. how many minutes) he or
she is using.
COMMENTS
1.Increasing The Cost At The Buffet? Some telecommunications
companies assert that when they developed their
all-you-can-eat plans, they were priced at a specific level
because the companies knew their costs would be lower since
they didn't need to collect, process, and render bills with
detailed information about every telephone call. Being forced
to track the minutes each customer uses so a company can
provide that information to any customer who requests it may
lead companies to increase their all-you-can-eat prices.
This bill tries to address that issue by requiring companies
to make the information available only when a customer asks
for it, allowing flexibility in when the information is to be
provided, and limiting the information a customer can get to
the total number of minutes of used. Furthermore, the bill
doesn't preclude a company from charging a separate fee to a
customer who wants access to this type of information.
2.When Can I Find Out How Many Minutes I've Used? This bill
requires telephone companies to provide customers who buy an
all-you-can-eat plan or who buy a specific number of minutes
for a set price to provide those customers with a breakdown of
the minutes used during the billing period if the customer
asks for it.
For customers who buy a set number of minutes at a fixed
price, it's important to know the number of minutes used so
the customer can manage his or her calling practices and avoid
the high per-minute charges attached to calls made after the
customer uses up their pre-paid fixed price minutes. Last
year, the Legislature passed and the Governor signed SB 1903
(O'Connell), Chapter 286, Statutes of 2002, dealing with such
a circumstance for wireless customers. That measure requires
cellular telephone service providers to establish a means by
which customers can obtain current information on their
calling plans and usage after January 1, 2004.
Since that information would be useful to a land-line customer
who doesn't want to be hit with higher per-minute charges once
they're used up the bucket of minutes they've pre-purchased,
the author and committee may wish to consider expanding this
bill to cover that circumstance.
3.Why Let The Sun Go Down? This measure sunsets on January 1,
2007, but it's unclear why such a sunset is necessary or
appropriate.
4.Related Legislation . AB 1379 (Calderon) delays the effective
date of SB 1903 from January 1, 2004 to January 1, 2005, and
clarifies the law to make sure it applies to roaming charges.
AB 1379 is scheduled to be hearing today in the Senate Energy,
Utilities, & Communications Committee.
ASSEMBLY VOTES
Assembly Floor (44-29)
Assembly Appropriations Committee (17-7)
Assembly Utilities and Commerce Committee
(8-2)
POSITIONS
Sponsor:
Author
Support:
MCI
Office of Ratepayer Advocates
The Utility Reform Network
Oppose:
Verizon
Randy Chinn
AB 909 Analysis
Hearing Date: July 8, 2003