BILL ANALYSIS
AB 1010
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CONCURRENCE IN SENATE AMENDMENTS
AB 1010 (Ruskin)
As Amended August 23, 2006
Majority vote
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|ASSEMBLY: | |(June 1, 2005) |SENATE: |23-16|(August 28, 2006) |
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(vote not relevant)
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|COMMITTEE VOTE: |6-5 |(August 30, 2006) |RECOMMENDATION: | Concur |
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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
AB 1010
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(Caltrans).
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 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
AB 1010
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FN: 0017745