BILL ANALYSIS
SB 128
Page 1
SENATE THIRD READING
SB 128 (Bowen)
As Amended July 10, 2003
Majority vote
SENATE VOTE :22-15
UTILITIES AND COMMERCE 9-0
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|Ayes:|Reyes, Richman, Calderon, | | |
| |Canciamilla, Diaz, Jerome | | |
| |Horton, Levine, Nu?ez, | | |
| |Ridley-Thomas | | |
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SUMMARY : Requires providers of cellular telephone service to
extend a minimum 30-day grace period to new customers during
which the customer may rescind the agreement. Specifically,
this bill :
1)Requires cellular telephone carriers to allow an unspecified
grace period for all new cellular service customers, during
which the customer may rescind the agreement and terminate
service if the customer finds that the cellular service
quality is unsatisfactory.
2)Specifies that a customer who rescinds a contract must pay for
those services used prior to cancellation of the agreement.
3)Requires cellular companies to provide reasonable notice of
this grace period and the customer right of recission.
4)Provides that the grace period shall not apply to commercial
accounts (i.e., accounts including service for five or more
cell phones) or to contracts for cellular service where
customers are not required to purchase more than one month of
service.
EXISTING LAW provides for:
1)Licensure of cellular phone service providers through the
Federal Communications Commission.
2)Regulation of telecommunication services by the California
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Public Utilities Commission (PUC).
FISCAL EFFECT : Unknown
COMMENTS : Current federal law permits states to establish
consumer protection rules for cellular telephone service
customers. [Federal Communications Act Section 332(c)(3)(A).]
According to the author, a prospective cellular phone customer
cannot rely on the coverage maps provided by the cellular
carriers as an indicator of coverage area, and all such coverage
maps contain disclaimers that the map is not a guarantee of
service availability or quality. In the absence of accurate
maps, the only way for customers 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 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.
Cellular telephone use has grown very rapidly across the country
in recent years and in California, the number of wireless
customers has jumped by 29% since 2000. One out of every nine
cellular customers nationwide is a Californian. Cellular
telephones are becoming as prevalent as traditional telephones,
with about 16 million cellular telephones in California,
compared to 26 million traditional telephones.
The major cellular providers require customers to sign long-term
contracts for service. Those contracts are typically one year
long, though some providers now require two-year contracts,
particularly if free or discounted cellular phone equipment is
packaged with the deal.
All of the major cellular providers already provide customers a
grace period during which the customer can return the phone and
discontinue service without being subject to a contract
cancellation fee. The grace periods range from 14 to 30 days
for the major carriers.
Consumer Reports magazine found last year that Americans
consistently rated their cellular phone service as mediocre.
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This year, the magazine noted the overall satisfaction with
cellular carriers is lower than for most other businesses that
they rate. In a survey conducted in conjunction with the
article, poor phone service was the leading reason cited by
people for switching providers.
Related legislation: SB 1903 (O'Connell), Chapter 286, Statutes
of 2002, requires cellular telephone service providers to give
customers a way to obtain current information on their calling
plan and usage.
AB 1379 (Calderon), pending in the Senate, requires cellular
companies to provide a means by which a subscriber can obtain
reasonably current and available information on the subscriber's
calling plan or plans and service usage, including roaming usage
and charges.
SB 1601 (Bowen), similar to SB 128, passed the Assembly in 2002,
after the Assembly shortened the right-of-recission period from
30 to 14 days. The author placed the bill on the Senate
Inactive File in the waning days of the 2002-03 Session.
Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083
FN: 0002278