BILL ANALYSIS                                                                                                                                                                                                    



                                                             


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|SENATE RULES COMMITTEE            |                   AB 818|
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                    CONFERENCE COMPLETED
                              

Bill No:  AB 818
Author:   Knox (D), et al
Amended:  Conference Report No. 1, 9/3/99
Vote:     21

  
  SENATE ENERGY, U.&C. COMMITTEE  :  8-1, 7/13/99
AYES:  Bowen, Alarcon, Baca, Hughes, Peace, Solis, Speier,  
  Vasconcellos
NOES:  Kelley
NOT VOTING:  Brulte, Mountjoy

  SENATE APPROPRIATIONS COMMITTEE  :  12-0, 8/23/99
AYES:  Johnston, Alpert, Bowen, Burton, Johnson, Karnette,  
  Kelley, Leslie, McPherson, Mountjoy, Perata, Vasconcellos
NOT VOTING:  Escutia

  SENATE FLOOR  :  35-1, 8/25/99
AYES:  Alarcon, Alpert, Baca, Bowen, Brulte, Burton,  
  Chesbro, Costa, Dunn, Figueroa, Hayden, Hughes,  
  Johannessen, Johnson, Johnston, Karnette, Kelley, Knight,  
  Leslie, Lewis, McPherson, Monteith, Mountjoy, Murray,  
  O'Connell, Ortiz, Peace, Perata, Poochigian, Rainey,  
  Schiff, Sher, Solis, Speier, Vasconcellos
NOES:  Wright
NOT VOTING:  Escutia, Haynes, Morrow, Polanco

  ASSEMBLY FLOOR  :  70-6, 5/27/99 - See last page for vote
 

  SUBJECT  :    New area codes:  telephone number assignment

  SOURCE  :     Author

                                                 CONTINUED





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  DIGEST  :    This bill requires the California Public  
Utilities Commission to develop and implement available  
measures to efficiently allocate telephone numbers and to  
address the proliferation of telephone area codes.

  Conference Committee Amendments  (1) remove the urgency  
clause and add a co-author, (2) prohibit the California  
Public Utilities Commission from implementing new area  
codes until a study is completed, (3) rescind temporarily  
any split or overlay and 10-digit dialing in the 310 number  
plan area, as specified, and (4) require the California  
Public Utilities Commission to establish an education plan  
on area codes.  
  
  ANALYSIS  :    Current federal regulations require telephone  
numbers to be handed out in a certain manner and preclude  
states from assigning area codes and prefixes based on a  
technologically specific use.

Current state law prescribes a process for soliciting and  
accepting public input regarding the creation of new area  
codes and for implementing a new area code once a  
determination has been made that a new area code is  
necessary.

This bill makes legislative findings about area code  
proliferation and its detrimental effect on society,  
declares that area codes should be preserved for as long as  
possible and calls on the California Public Utilities  
Commission (CPUC) to stop area code proliferation.

This bill requires the CPUC to develop and implement any  
available measures which efficiently allocate telephone  
numbers. The CPUC shall consider the cost effectiveness  
before requiring implementation.

This bill requires the CPUC to obtain the number of  
telephone numbers in the possession of, and used by,  
telephone companies and attempts to compel telephone  
companies to cooperate.  Using this information, the CPUC  
is required to submit to the Legislature a study of  
telephone number use rates by July 1, 2001.  








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3

This bill requires the CPUC to require telephone companies,  
if possible, to assign numbers to their customers from  
prefixes which are more than 25% in use.

The bill provides that if the CPUC, or an authorized  
federal agency establishes a process to ensure that  
telephone numbers can be allocated in blocks smaller than  
10,000, the CPUC shall require that a telephone corporation  
return to the North American Numbering Plan Administrator  
blocks of telephone numbers for reassignment, in a quantity  
determined by the commission.

The commission shall direct the coordinator to seek the  
return of blocks of numbers smaller than 10,000 not in use.

The bill prohibits the CPUC from implementing new area  
codes until a study of specified utilization information is  
completed and certain findings are made, including  
demonstrating that a new area code is needed.  The bill  
provides that the CPUC shall request a waiver from the  
Federal Communications Commission (FCC) of the requirement  
for the 10-digit dialing in area code overlays.

The bill, until September 1, 2000, rescinds any split or  
overlay and 10-digit dialing in the 310 number plan area  
until (1) the CPUC directs the coordinator to obtain  
utilization data for the 310 number plan area, (2) the CPUC  
reviews the data to determine how many unused telephone  
number exist that could be distributed to consumers in need  
of numbers, and (3) the CPUC determines, based on the  
utilization data, that without implementation of a split or  
overlay within the 310 area code, consumers will be unable  
to receive telephone service in a timely manner.

The bill requires the CPUC to develop and implement a  
consumer education plan to alert consumers to the need for  
area code relief and provide consumers with information  
regarding how they can participate in the decisionmaking  
process.

The bill requires the CPUC to develop a comprehensive plan  
to alert consumers, including homeowner organizations and  
small business groups, to information regarding the type  
and timing of any proposed area code relief plan.







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 Background

Coming Soon:  Your Own Personal Area Code  .  After starting  
with three area codes in 1947, California had 13 area codes  
in 1992, which mushroomed into 23 area codes by the end of  
1998.  At the current pace, the CPUC expects California to  
have 41 area codes by the end of 2002.  The Los Angeles  
area has been at the leading edge of area code expansion,  
with the number of area codes tripling since the early  
1980's.  The San Francisco Bay Area is not far behind - it  
has four new area codes set to take effect by the end of  
next year.

The growth of area codes have a number of practical  
implications in people's every day lives as phone users are  
forced to adapt to new dialing habits, re-program their  
telephone devices, dial more calls using 11 digits rather  
than the traditional seven, and more.  Businesses are often  
forced to change stationery and advertisements, as well as  
lose any "equity" they may have built up with their  
long-standing telephone numbers.

  Reasons Behind The Area Code Explosion  .  The growth in the  
demand for new area codes can be attributed to three basic  
realities:

First, deregulation and the emergence of new telephone  
companies has dramatically increased the demand for new  
telephone numbers, as these new companies all need their  
own numbers to sell to customers.  For example, in the  
early 1980's there were only a handful of telephone  
companies needing telephone numbers in the 310 area code.   
Now, 53 telephone companies have the right to demand an  
allocation of telephone numbers in the 310 area code alone.

Second, technology has made new forms of communications  
available and affordable to people and businesses.  Most  
people no longer have just one home number and one work  
number - they have numbers dedicated for pagers, cellular  
telephones, internet service, and fax machines.   
Furthermore, the "point of sale" credit card verification  
terminals that have popped up at grocery stores, gas  
stations, and other merchants all require their own phone  







                                                      AB 818
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5

lines.

Third, the FCC regulations on how telephone numbers are  
handed out to companies haven't kept up with deregulation  
or technology.  For example, the FCC only allows numbers to  
be handed out in blocks of 10,000 - even if a telephone  
company only has a single customer.  So, as a result of the  
emergence of new telephone competitors, more blocks of  
10,000 numbers are being handed out (thus draining the pool  
of available numbers more quickly), and as a result of  
people's use of new technologies that require dedicated  
phone numbers, the numbers within those blocks are being  
exhausted more rapidly (based on how the FCC determines  
that block of numbers has been exhausted).

  The Long Arm Of The Law  .  California is not free to deal  
with telephone numbers in any way it sees fit because  
Congress has given the FCC the responsibility for telephone  
number administration.   Consequently, the FCC has limited  
the states' discretion when it comes to dealing with  
telephone numbering issues.

For example, the FCC prevents states from allocating  
telephone numbers on the basis of technology (i.e. separate  
area codes for cellular telephones and pagers).  It also  
prevents states from imposing telephone number conservation  
measures designed to slow the need for new area codes.   
California is not alone in its frustration with its  
inability to deal with area code issues as it would like -  
New York, Florida, Illinois, North Carolina, Colorado,  
Maine, and Pennsylvania have also complained to the FCC  
about their inability to deal with the area code  
proliferation problem.

Responding to widespread public concern, including requests  
from the Chair of the Senate Energy, Utilities and  
Communications Committee, the author of this bill, the CPUC  
and other states, the FCC announced on May 27 that it will  
examine proposals to allow states to use telephone numbers  
more efficiently.  In its announcement, the FCC noted that  
"frequent area code changes are frustrating, inconvenient,  
and costly to consumers and industry, and burdensome to  
communities."  While this FCC proposal is encouraging, it's  
unlikely to be enacted soon enough to provide meaningful  







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relief to Californians who are facing the imminent  
imposition of a new area code split or overlay, such as in  
the 310 area code.

  Overlay vs. Split .  In addition to the proliferation of new  
area codes, a second controversy was created when the CPUC  
decided to create a new area code in the 310 area code  
territory by imposing the state's first "area code  
overlay."

Historically, new area codes have been created by  
geographically splitting existing area codes, which forces  
people and businesses located in the "new" area to get new  
telephone numbers.  This is obviously inconvenient for  
people and businesses that have to re-program machines, let  
their friends or customers know about the new number and,  
in the case of a business, reprint stationery, change  
advertisements, and much more.

A long-discussed alternative way of creating a new area  
code is the "overlay," where a second area code is laid on  
top of an existing area code.  The main advantage of an  
overlay is no one is required to change their existing  
telephone or fax numbers - only people getting new numbers  
would receive the new area code even though they'd  
physically be located in the "old" area code territory.   
The primary downside is that everyone has to dial eleven  
digits (1 + area code + phone number) on all telephone  
calls - even when calling a person in the same area code.   
More fundamentally objectionable to many people is that in  
an overlay, a person could have two different area codes in  
their own home, which goes against the entire concept of  
what everyone understands an "area code" to be.  
  
  FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
Local:  No

Prior to Conference Committee amendments:

                Fiscal Impact (in thousands)

  Major Provisions               1999-00            2000-01         
   2001-02          Fund








                                                     AB 818
                                                       Page  
7

  Increased PUC
Oversight                          $530*              $475   
            $475           Special**

*Contains one-time purchases and a $250 contract for a  
number utilization 
  study
**PUC Utilities Reimbursement Account

There are approximately 220 companies that receive prefix  
codes for 800 rate centers in the state.  California  
currently has 25 area codes.  The costs noted above are  
based on an extensive analysis by the Telecommunications,  
Legal, and Administrative Law Judge Divisions of the PUC  
and its Office of Ratepayer Advocates and reflect the cost  
of implementing a number of new functions.

  SUPPORT  :   (Unable to reverify at time of writing)

City of Camarillo
City of Culver City
City of Los Angeles
Los Angeles County Board of Supervisors
Office of Ratepayer Advocates 
Santa Barbara City Council
Santa Monica City Council 
Numerous Individuals

  OPPOSITION  :    (Unable to reverify at time of writing)

California Cable Television Association (Oppose unless  
amended)
Cellular Carriers Association of California 
GTE
MCI WorldCom
Professor Bill Neill, Ret., San Diego
Pacific Bell
PUC


  ASSEMBLY FLOOR : 
AYES:  Ackerman, Alquist, Aroner, Ashburn, Baldwin, Bates,  
  Battin, Baugh, Bock, Brewer, Briggs, Calderon, Campbell,  
  Cardenas, Cedillo, Corbett, Cox, Cunneen, Davis,  







                                                     AB 818
                                                       Page  
8

  Dickerson, Ducheny, Dutra, Firebaugh, Florez, Frusetta,  
  Gallegos, Granlund, Havice, Hertzberg, Honda, House,  
  Jackson, Kaloogian, Keeley, Knox, Kuehl, Leach, Lempert,  
  Leonard, Longville, Machado, Maddox, Maldonado, Margett,  
  Migden, Nakano, Oller, Robert Pacheco, Papan, Pescetti,  
  Reyes, Romero, Runner, Scott, Shelley, Soto, Steinberg,  
  Strickland, Strom-Martin, Thompson, Thomson, Torlakson,  
  Washington, Wayne, Wesson, Wiggins, Wildman, Wright,  
  Zettel, Villaraigosa
NOES:  Aanestad, Cardoza, Correa, McClintock, Olberg, Rod  
  Pacheco
NOT VOTING:  Floyd, Lowenthal, Mazzoni, Vincent


NC:cm  9/5/99   Senate Floor Analyses 

               SUPPORT/OPPOSITION:  SEE ABOVE

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