BILL ANALYSIS
AB 1010
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CONCURRENCE IN SENATE AMENDMENTS
AB 1010 (Ruskin)
As Amended June 14, 2006
Majority vote
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|ASSEMBLY: | |(June 1, 2005) |SENATE: |22-12|(June 29, |
| | | | | |2006) |
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(vote note relevant)
Original Committee Reference: TRANS.
SUMMARY : Requires providers of mobile telephone service to
provide a minimum 30-day grace period to new customers or
customers who renew or extend a contract, during which the
customer may rescind the agreement.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Require mobile telephone carriers to allow a 30-day grace
period for all new customers, during which the customer may
rescind the agreement and terminate service if the customer
finds that the service quality is unsatisfactory.
2)Require mobile telephone carriers to allow a 30-day grace
period for all existing customers who choose to renew their
service, during which time the customer may rescind the
agreement and terminate service if the customer finds that the
service quality is unsatisfactory.
3)Specify that a customer who rescinds a contract must pay for
those services used prior to cancellation of the agreement.
4)Require mobile telephone companies to provide reasonable
notice of this grace period and the customer's right of
rescission.
5)Provide that the grace period shall not apply to a
month-to-month account or prepaid account.
AS PASSED BY THE ASSEMBLY , this bill shifted responsibility for
oversight of specified at-grade rail crossings from the
California Public Utilities Commission (PUC) to the California
AB 1010
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Department of Transportation.
FISCAL EFFECT : None
COMMENTS : The intent of this bill is to protect consumers from
entering into a long-term mobile phone contract without the
ability to ensure that the phone company's service meets the
expectations of the customer.
Supporters of this bill argue that given the complexity of
selecting a mobile phone service plan, combined with the length
of the contract that most carriers require, customers should be
entitled to a 30-day grace period to check out their service
before excessive early termination fees are charged. Supporters
further contend that when Californians had this right
previously, mobile phone usage grew and carriers prospered.
Opponents, primarily the mobile phone providers, argue that by
mandating a set grace period, the state would infringe upon one
of the key tools mobile phone companies use to differentiate
themselves from one another. They argue that in highly
competitive industries, such as the wireless phone market, it is
in the interests of the customers to preserve all available
means the carriers have to offer a wide range of service
options. Furthermore, Verizon Wireless argues: "The California
Public Utilities Commission specifically rejected inclusion of a
mandatory grace period in its Consumer Bill of Rights decision
less than six months ago." In a similar vein, Sprint states
that: "Given the pending implementation of the recently adopted
consumer protection and fraud prevention rules, action by the
Legislature on AB 2622 would be ill-timed, sow needless
confusion, and be contrary to the pro-competitive policies just
endorsed by the PUC."
This bill was substantially amended in the Senate and the
Assembly approved provisions of this bill were deleted. This
bill, as amended in the Senate is inconsistent with Assembly
actions. The language in this bill is similar to AB 2622
(Ruskin) of 2006 which was moved to Interim Study in the
Assembly Utilities and Commerce Committee.
Analysis Prepared by : Greg Girvan / U. & C. / (916) 319-2040
AB 1010
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FN: 0015587