BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 818| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 AB 818 Page 2 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. AB 818 Page 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. AB 818 Page 4 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 Page 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 AB 818 Page 6 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 **** END ****