BILL ANALYSIS                                                                                                                                                                                                    



                                                          AB 535
                                                          Page  1

ASSEMBLY THIRD READING
AB 535 (Reyes)
As Amended May 6, 1999
Majority vote

  UTILITIES AND COMMERCE          9-3                  
APPROPRIATIONS      14-7        
  
 ----------------------------------------------------------------- 
|Ayes:|Cardenas, Florez, Kuehl,  |Ayes:|Migden, Cedillo, Davis,   |
|     |Papan, Pescetti, Reyes,   |     |Hertzberg, Kuehl, Papan,  |
|     |Steinberg, Wesson, Wright |     |Romero, Shelley,          |
|     |                          |     |Steinberg, Thomson,       |
|     |                          |     |Wesson, Wiggins, Wright,  |
|     |                          |     |Washington                |
|     |                          |     |                          |
|-----+--------------------------+-----+--------------------------|
|Nays:|Campbell, Frusetta,       |Nays:|Brewer, Ashburn,          |
|     |Maddox                    |     |Campbell, Granlund,       |
|     |                          |     |Maldonado, Runner, Zettel |
 ----------------------------------------------------------------- 

  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 local exchange carriers (LEC) that offer per use  
  custom calling or enhanced features to provide all new  
  subscribers, including existing customers ordering an  
  additional line, with information about those calling  
  features.

2)Requires LECs to inquire whether the subscriber would like to  
  block any or all of those per use custom calling features.

3)Requires all customers be notified about per use custom  
  calling features, the charges for activation, any additional  
  charges and detailed information about the ability to block  
  the features not later than January 31, 2000.

4)Requires that the notice contain a toll free number and a  
  pre-paid postcard that subscribers may use to block any or all  








                                                          AB 535
                                                          Page  2

  of the per use custom calling features.

5)Specifies that a subscriber that has not blocked the per use  
  features is not prohibited from obtaining a bill adjustment  
  for the inadvertent or unauthorized activation of the per use  
  services. 

  EXISTING LAW  authorizes California Public Utilities Commission  
(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  :  None



  COMMENTS  :  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 such  
as Call-Return, Repeat Dialing and Three-Way Calling.  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  
LECs to inform all new and existing customers during the verbal  
service order process with information about those features and  
inquire whether they would like to block those features.  This  
bill also requires LECs to notify all customers not later than  
January 31, 2000 about the per use custom calling features, the  
charges for activation and any additional charges, as well as  
detailed information about the ability to block those features.   


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.  It is necessary to dial a code in order to  
activate call return or repeat dialing.  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  








                                                          AB 535
                                                          Page  3

person, dialing another number, and then depressing the flash or  
switch hook again to connect all three parties.  Opponents  
attest that the billing does not begin until all three parties  
have been on the line for 18 seconds.  ORA has received some  
complaints indicating that there is customer confusion on the  
use of the features.  Since the services are already active, the  
author requires that customers be given the opportunity to block  
the per use custom features by returning a pre-paid postcard  
furnished by LECs. 

Opponents assert that the subscribers are always notified that  
such services will be available in advance of the time when the  
services are first offered.  Opponents also indicate the current  
CPUC process requires that customers be educated on the price,  
accessing, terms and conditions in using per use custom calling  
features.  Additionally, CPUC is going to be initiating a  
rulemaking procedure to establish consumer protection rules for  
the telecommunications industry where these issues can be  
explored further. 


  Analysis Prepared by :  Carolyn Veal-Hunter / U. & C. / (916)  
319-2083 


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