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 FN: 0000743