BILL ANALYSIS
AB 535
Page 1
Date of Hearing: April 12, 1999
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Roderick Wright, Chair
AB 535 (Reyes) - As Amended: April 7, 1999
SUBJECT : Custom calling and enhances calling telephone
services.
SUMMARY : Prohibits local exchange carriers that automatically
provide custom calling services on a pay per use basis from
providing such service to a subscriber unless the subscriber
agreed to sign up for the service by returning a prepaid
postcard to the carrier. Specifically, this bill :
1)Requires all local exchange carriers (LEC) to provide
information to all subscribers about per use custom calling
features;
2)Defines a current subscriber as a residential subscribing of a
local exchange carrier (LEC) as of December 31, 1999;
3)Defines a new subscriber as a residential customer initiating
service or ordering additional service lines that become
operational on or after January 1, 2000;
4)Requires customer notification to be in the form of a
postage-paid postcard included in the regular bill;
5)Prohibits the local exchange carrier from providing any per
use custom calling features without the subscriber's
authorization;
6)Specifies that the California Public Utilities Commission
(CPUC) must approve the content of the postcard;
7)Requires the LEC to provide new telephone subscribers with
information relating to per use custom calling features during
the verbal initiation of a service request;
8)Requires that new customers and customers ordering additional
services be informed that they may block any or all of the per
use custom calling features;
9)Requires that the service confirmation letter identify the per
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use custom calling features and specify whether the customer
has blacked any or all of those features;
10)Exempts customers from liability for charges unless the LEC
has received the postcard authorizing the provision of per use
custom calling features;
11)Specifies that a current customer may be liable for charges
incurred up to 14 days from the date the LEC sends the
notification in the regular billing envelope;
12)Specifies that a current subscriber may not be liable for
charges incurred after the notification has been mailed unless
the LEC received authorization for the provision of per use
custom calling features; and
13)Authorizes a subscriber to seek a bill adjustment for the
inadvertent or unauthorized use of the per use custom calling
features.
EXISTING LAW authorizes CPUC to investigate the billing
practices of every telephone corporation in billing its
subscribers.
Requires every telephone corporation to annually issue to its
customers a listing of the residential telephone services it
provides, the rates or charges for those services and the state
or federal regulatory agency responsible for regulation of those
services.
FISCAL EFFECT : Unknown.
COMMENTS :
1.The author has introduced this bill to address a number of
complaints filed with the Office of Ratepayer Advocates (ORA).
Customers have complained that they have been billed in error
for using per use custom calling features that they
inadvertently activated. Many of the complainants were
unaware that per use custom calling features were available as
part of their telephone service until the charges appeared on
their bills. This bill would require the LECs to obtain
written authorization from current subscribers prior to making
per use custom calling features available on a subscribers'
telephone. The written authorization would be in the form of
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a postcard that is mailed to every subscriber in their regular
bill. The author has suggested use of a postcard in a regular
bill for service in an effort to reduce the costs associated
with informing all subscribers of the services the LEC offers.
Unless the subscriber returns the postcard specifically
agreeing to sign up for specified services, the LEC must
discontinue providing said custom calling services on a per
use basis. Based on the amount of information contained in
the monthly customer bill, the Utilities and Commerce
Committee members should consider whether customers will
actually see, read, and act on the postcard.
2.At present at least three custom calling features are
available on a per use basis through the LECs operating in
California -- Call Return, Repeat Dialing and Three-Way
Calling. Per use custom calling features are reasonable
alternatives for customers who do not chose to subscribe to
those services on a monthly basis.
3.Pacific Bell indicates that in order to activate call return
or repeat dialing, customers must first dial a code. Three
way-calling, on the other hand, does not require a code, but
is activated by depressing the flash or switch hook while on a
call with one person, dialing another number, and then
depressing the flash or switch hook again to connect all three
parties. Pacific Bell attests that the billing does not begin
until all three parties have been on the line for 18 seconds.
In order to continue to allow an LEC to make these services
available to customers on a per use basis, customers must
return the above-described postcard.
4.MCI WorldCom has suggested that the author amend the bill to
exclude services that require an access code to trigger the
service. Call Return and Repeat Dialing would be exempt if
the author were to accept that proposed amendment. If a
customer dials an access code prior to utilizing a service,
the customer is not likely to inadvertently access the
service. The ORA also asserts that per use Three-Way calling
has generated the bulk of the customer complaints in this
area. The LECs should seek to modify the manner in which the
Three-Way Calling is activiated on a per use basis to require
an access code to prevent the inadvertent use of the service.
In preliminary discussions, the LECs have suggested that it
may be cost prohibitive to make such a modification. Further
study should be given to this proposal.
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5.Some of these custom-calling features have been available for
over three years. Three-way calling, which appears to be
causing the greatest concern to the author, has been available
for only one year. As presently drafted, this bill would
require the LECs to block access to per use custom calling
features unless the postcard is returned and authorizes a
continued desire to receive the services. At present,
thousands of customers access the per use features on a daily
basis. The author might want to consider requiring the return
of the postcard solely for those customers seeking to block
their service, rather than requiring customers to return the
postcard to continue the service. Additionally, the author
should consider requiring the LECs to advise consumers, in all
marketing materials, of the ability to block access to the per
use custom calling features.
6.GTE California indicates that "the current CPUC process
requires that customers be educated on the price, accessing,
terms and conditions" in using per use custom calling
features. The author should also consider requiring CPUC to
include a review of these services and determine whether new
consumer protection rules should be developed as part of an
Order Instituting Rulemaking that will commence soon at the
CPUC.
7.The bill also requires LECs to adjust a subscriber's bill for
the inadvertent or unauthorized use of per use custom calling
features. So that this provision is not abused, the author
should require the LECs to advise customers of the ability to
block the service at the time of the bill adjustment. Once
the customer has been advised of the service availability of
per use custom calling features and the ability to block, the
burden for responsible use of the services should be shifted
to the subscriber.
REGISTERED SUPPORT / OPPOSITION :
Support
Office of Ratepayer Advocates (ORA)
The Utility Reforn Network (TURN)
Utility Consumers Action Network (UCAN)
California Alliance for Consumer Protection
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Opposition
Pacific Telesis
GTE California
Analysis Prepared by : Carolyn Veal-Hunter / U. & C. / (916)
319-2083