BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 1010|
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THIRD READING
Bill No: AB 1010
Author: Ruskin (D)
Amended: 6/14/06 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 7-3, 6/27/06
AYES: Escutia, Alarcon, Bowen, Dunn, Kehoe, Murray,
Simitian
NOES: Cox, Battin, Dutton
ASSEMBLY FLOOR : Not relevant
SUBJECT : Telecommunications: mobile telephony services
SOURCE : Consumer Federation of California
DIGEST : This bill requires cellular telephone companies
to provide their customers with a 30 day right of recision
exercisable if the customer finds the service
unsatisfactory.
ANALYSIS : Current law bars states from regulating the
entry of, and the rates charged by, cellular telephone
companies, but permits states to regulate the other terms
and conditions of service.
This bill requires cellular telephone companies to provide
their customers with a 30 day right of recision exercisable
if the customer finds the service unsatisfactory. This
provision does not apply where customers have month to
CONTINUED
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month accounts or prepaid service.
Background
The fight over telephone consumer protection issues has
raged since the turn of this century. A five year effort
to establish and enforce strong consumer protection rules
at the California Public Utilities Commission succeeded and
was then rescinded a victim of an ideological battle over
the proper role of government.
There can be no doubting the popularity of cell phone
service. Over 200 million Americans have cell phone
service, 23 million of which are Californians. Along with
the popularity has come some consumer dissatisfaction. The
FCC has noted an increase in consumer complaints. Poor
cellular service is the second largest complaint to the
Better Business Bureau, trailing only auto dealers.
Forty-five million cell phone customers switch every year,
according to a recent report by a respected market research
firm. Even the industry admits it has problems, an officer
of one of the largest cell phone companies recently
admitted to the New York Times: "It's no secret that the
wireless industry doesn't have the world's greatest
reputation for customer service."
Comments
Unnecessary ? Opponents argue that this bill is unneeded,
and that there is little demand for a 30 day right of
recision. Better, they argue, to let the market decide
what return policy is best. A cell phone company should be
able to choose whether to spend money on improving the
quality of its network rather than establishing a costly 30
day return policy.
Will The Phone Work Where I Want To Use It ? Every cellular
telephone company provides coverage maps to show where
their service is available. However, those maps are much
generalized and are not guarantees of coverage. A
customer's ability to complete or continue a call in a
given location can vary depending on the time of year, the
height of the buildings in a given area, call volumes,
radio interference, and phone quality. In the absence of
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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 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. This bill guarantees customers a
reasonable way to get out of a long-term contract
commitment if the product they bought doesn't live up to
their expectations or to the promises made by the carrier.
Cell phones are almost indispensable, and the technology is
truly amazing and evolving. But when one of the major
cellular carriers advertises that its service isn't as bad
as their competitors (e.g. fewest dropped calls), it helps
make the case for this bill.
State Mandated Warranties Are The Rule, Not The Exception .
Most products sold in California are covered by the
Song-Beverly Consumer Warranty Act (Civil Code 1790 et.
seq.) that provides buyers with a 60-day implied warranty
of fitness. Because cell phone service is considered a
"service" and not a "product," those contracts aren't
covered by the Song-Beverly Consumer Warranty Act, though
it is a fair question as to whether Song-Beverly applies to
the cellular phone.
30 Days is the Norm . For a short time in late 2004 the
CPUC instituted a rule requiring a 30 day cancellation
policy, though that rule was rescinded when two CPUC
commissioners were replaced by the current Administration.
Most major cellular carriers still offer 30-day
cancellation policies.
Prior Legislation
The Senate has passed similar bills before in 2002 and
2003. This year AB 2622 by the same author was moved to
Interim Study in the Assembly Utilities and Commerce
Committee.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 6/28/06)
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Asian Law Alliance
California Alliance for Retired Americans
California Community Technology Policy Group
California Conference Board of the Amalgamated Transit
Union
California Conference of Machinists
California Public Interest Research Group
California Rural Legal Assistance Foundation
California Teamsters Public Affairs Council
Central American Resource Center
Communications Workers of America
Consumer Attorneys of California
Concerned Citizens of South Central Los Angeles
Consumer Attorneys of California
Disability Rights Advocates
Eastside Neighborhood Center
Echo Park Community Coalition
El Concilio of San Mateo County
Engineers and Scientists of California
International Longshore and Warehouse Union
Legal Aid Foundation of Santa Barbara County
Madera Coalition for Community Justice
Merced Lao Family Community, Inc.
Professional & Technical Engineers, Local 21
Strategic Committee of Public Employees, Laborers
International Union
of North America
The Foundation for Taxpayer & Consumer Rights
The Utility Reform Network
UFCW Local 428
UNITE HERE!
United Food & Commercial Workers Union, Western States
Council
Utility Consumers' Action Network
OPPOSITION : (Verified 6/28/06)
California Public Utilities Commission
Cingular Wireless
CTIA-The Wireless Association
Sprint Nextel
T-Mobile USA
Verizon Wireless
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NC:do 6/28/06 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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