BILL ANALYSIS
AB 1010
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1010 (Ruskin)
As Amended August 23, 2006
Majority vote
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|ASSEMBLY: | |(May 28, 2005) |SENATE: |23-16|(August 28, |
| | | | | |2006) |
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(vote not relevant)
Original Committee Reference: TRANS.
SUMMARY : Requires providers of mobile telephone service to
provide a minimum 21-day grace period to new customers, during
which the customer may rescind the agreement. Specifically, this
bill :
1)Requires mobile telephone carriers to allow a 21-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)Specifies that a customer who rescinds a contract must pay for
those services used prior to cancellation of the agreement.
3)Requires mobile telephone companies to provide reasonable
notice of this grace period and the customer's right of
rescission.
4)Provides that the grace period shall not apply to a
month-to-month account or prepaid account.
The Senate amendments delete the Assembly version of this bill,
and instead insert the above provisions
AS PASSED BY THE ASSEMBLY , this bill shifted responsibility for
oversight of specified at-grade rail crossings from the Public
Utilities Commission (PUC) to the Department of Transportation
(Caltrans).
FISCAL EFFECT : None
COMMENTS : The intent of this bill is to protect consumers from
AB 1010
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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 21-day grace period to evaluate 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."
In a similar vein, Sprint states that "Given the ongoing
implementation of the recently adopted consumer protection and
fraud prevention rules, action by the Legislature on AB 1010
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.
AB 1010 language is similar to AB 2622 by the same author which
was moved to Interim Study in the Assembly Utilities and
Commerce Committee.
Analysis Prepared by : Greg Girvan / U. & C. / (916) 319-2040
FN: 0017540