BILL NUMBER: AB 994	AMENDED
	BILL TEXT

	AMENDED IN SENATE   JUNE 12, 2000
	AMENDED IN SENATE   JUNE 5, 2000
	AMENDED IN ASSEMBLY   JANUARY 14, 2000
	AMENDED IN ASSEMBLY   JANUARY 5, 2000

INTRODUCED BY   Assembly Member Wright
   (Principal coauthor:  Assembly Member Strom-Martin)

                        FEBRUARY 25, 1999

   An act to amend Sections 739.3 and 2890 of, and to add Section
2890.1 to, the Public Utilities Code, relating to public utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 994, as amended, R. Wright.   Telephone rates:  telephone
bills: rural telephone cooperatives.
   (1) Existing law, until January 1, 2001, requires the Public
Utilities Commission to develop, implement, and maintain a program to
establish a fair and equitable local rate structure designed to
reduce any disparity in rates charged by small independent telephone
corporations serving rural and small metropolitan areas, and a
program to provide for transfer payments to telephone corporations
serving areas where the cost of providing services exceeds rates
charged by providers, as determined by the commission.
   This bill would extend the operative date of those provisions
until January 1, 2005.
   (2) Existing law governing the contents of a telephone bill
requires persons, corporations, or billing agents that transmit
telephone bills to include information concerning the nature of the
charges, dispute resolution, and complaint procedures.  Until January
1, 2001, this includes a bill for noncommunications-related products
and services included in an envelope with a telephone bill.  Other
existing law, operative January 1, 2001, does not contain the latter
provision regarding bills for noncommunications-related goods and
services.
   This bill would extend the operative date of the operative
provision to July 1, 2001, and would correspondingly delay the
operative date of that later operative provision to July 1, 2001.
The bill would require the commission to open a proceeding to adopt
certain consumer protection rules.  Since a violation of a rule or
order of the commission is a crime, this bill would impose a
state-mandated local program by creating new crimes.
   The bill would make related legislative findings and declarations.

   (3) Under existing law, the commission regulates public utilities,
including telephone corporations and other specified entities.
   This bill would require the commission, on or before January 1,
2002, to prepare and submit to the Governor and the Legislature a
report on the feasibility of establishing rural telephone
cooperatives or other alternative service configurations, as defined,
to promote rural telephone service in the state, as prescribed.
  (4) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state.  Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote:  majority.  Appropriation:  no.  Fiscal committee:  yes.
State-mandated local program:  yes.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  The Legislature finds and declares all of the
following:
   (a) The Legislature has previously stated its intent that
telephone consumers only be billed for charges they have authorized
and that those charges be clearly identified.  The Legislature has
also previously identified specific rules regarding the billing
company, and the person, corporation, and billing agent for any
products or services on a consumer's telephone bill. Those rules
focus on issues relating to description of the product,
identification of charges, dispute resolution processes, provision of
a toll-free contact number, and means for resolving billing disputes
and complaint procedures.
   (b) Until January 1, 2001, only "communications-related" products
and services may be charged on a telephone bill, though the Public
Utilities Commission is permitted to allow billing telephone
companies to include  commission-specificated  
commission-specified  "noncommunications" products and services
on a separate bill within the telephone bill envelope.  On and after
January 1, 2001, only charges for products and services authorized by
the subscriber may be on the same telephone bill.
   (c) The Public Utilities Commission initiated Rulemaking 00-02-004
to establish consumer rights and consumer protection rules
applicable to all telecommunications utilities.  The rulemaking seeks
to establish consumer rights regarding disclosure, choice, privacy,
public participation, oversight and enforcement, and accurate bills
and redress.
   (d) The Legislature believes that Rulemaking 00-02-004 provides an
excellent opportunity for the Public Utilities Commission to
establish any additional safeguards that may be needed for
telecommunications companies that charge subscriber-authorized
noncommunications-related products and services on their telephone
bill.
  SEC. 2.  Section 739.3 of the Public Utilities Code is amended to
read:
   739.3.  (a) The commission shall develop, implement, and maintain
a suitable program to establish a fair and equitable local rate
structure aided by transfer payments to small independent telephone
corporations serving rural and small metropolitan areas.  The purpose
of the program shall be to promote the goals of universal telephone
service and to reduce any disparity in the rates charged by those
companies.
   (b) For purposes of this section, small independent telephone
corporations means those independent telephone corporations serving
rural areas, as determined by the commission.
   (c) The commission shall develop, implement, and maintain a
suitable, competitively neutral, and broadbased program to establish
a fair and equitable local rate support structure aided by transfer
payments to telephone corporations serving areas where the cost of
providing services exceeds rates charged by providers, as determined
by the commission.  The commission shall develop and implement the
program on or before October 1, 1996.  The purpose of the program
shall be to promote the goals of universal telephone service and to
reduce any disparity in the rates charged by those companies.  The
commission shall structure the program required by this subdivision
so that the amount of each transfer payment reasonably equals the
value of the benefits of universal service to the transferor entity
and its subscribers.  Except as otherwise explicitly provided, this
subdivision does not limit the manner in which the commission
collects and disburses funds, and does not limit the manner in which
it may include or exclude the revenue of transferring entities in
structuring the program.
   (d) Not later than December 15, 1996, the commission shall report
to the Governor, the Joint Legislative Budget Committee, and the
fiscal committees of the Senate and the Assembly regarding the
results of the commission's universal telephone service proceeding
and recommended program.  The Legislature may, at its discretion,
assess whether any identified problems in the universal telephone
service program are issues that warrant modifications to this chapter
during the 1997-98 Regular Session.
   (e) Not later than December 1, 1999, the commission shall prepare
a report to the Governor, the Joint Legislative Budget Committee, and
the fiscal committees of the Senate and the Assembly regarding the
status of the universal telephone service fund and program.  The
report shall consider all of the following:
   (1) The effectiveness of the universal service funding mechanism
in establishing equitable and nondiscriminatory contributions by all
telecommunications providers to support the preservation and
advancement of universal service.
   (2) The extent to which the current universal telephone service
program provides the continued availability of current
telecommunications and information services on a competitively
neutral basis, while providing adequate flexibility for provision of
new services and network capabilities as technology advances.
   (3) The success of the universal telephone service program in
ensuring universal access, in rural and high cost areas, to services
that are reasonably comparable, both in content and cost, to those
services provided in urban areas.
   (f) The commission shall investigate subsidy reduction, or
elimination of subsidies in service areas with demonstrated
competition, and report on service area auctions for high cost areas
as part of the commission's universal telephone service program
report required in accordance with subdivision (e).
   (g) Not later than February 1, 2000, the Legislative Analyst shall
conduct a review of the state's universal telephone service program,
including subsequent modifications as appropriate, and report to the
Governor and the Legislature as part of the Legislative Analyst's
analysis of the Budget Bill to be issued in February 2000.  In
evaluating the program, the Legislative Analyst shall consider all of
the following:
   (1) The findings of the report required by subdivision (e).
   (2) An assessment of whether any identified problems are issues
that affect the continued implementation of this chapter or issues
that warrant revisions of statutes or regulations.
   (h) This section shall remain in effect until January 1, 2005, and
as of that date is repealed, unless a later enacted statute, which
becomes effective on or before January 1, 2005, deletes or extends
that date.
  SEC. 3.  Section 2890 of the Public Utilities Code, as amended by
Section 65.5 of Chapter 1005 of the Statutes of 1999, is amended to
read:
   2890.  (a) A telephone bill may only contain charges for
communications-related products and services, including, but not
limited to, wired and wireless communications service, Internet
access, video service, information service, telephone equipment that
is connected to a telecommunications network, and cable set top
boxes.  The commission may permit a billing telephone company to
include in the same envelope with a subscriber's telephone bill, a
separate bill for noncommunications-related products and services.
The commission may also specify the kinds of
noncommunications-related products and services that may be billed in
this manner.
   (b) A telephone bill, and a bill for noncommunications-related
products and services that is included in the same envelope as a
telephone bill, may only contain charges for products or services,
the purchase of which the subscriber has authorized.
   (c) When a person or corporation obtains a written order for a
product or service, the written order shall be a separate document
from any solicitation material.  The sole purpose of the document is
to explain the nature and extent of the transaction.  Written orders
and written solicitation materials shall be unambiguous, legible, and
in a minimum 10-point type.  Written or oral solicitation materials
used to obtain an order for a product or service shall be in the same
language as the written order.  Written orders may not be used as
entry forms for sweepstakes, contests, or any other program that
offers prizes or gifts.
   (d) The commission may only permit a subscriber's local telephone
service to be disconnected for nonpayment of charges relating to the
subscriber's basic local exchange telephone service, long distance
telephone service within a local access and transport area
(intraLATA), long-distance telephone service between local access and
transport areas (interLATA), and international telephone service.
   (e) (1) A billing telephone company shall clearly identify, and
use a separate billing section for, each person, corporation, or
billing agent that generates a charge on a subscriber's telephone
bill.  A billing telephone company may not bill for a person,
corporation, or billing agent, unless that person, corporation or
billing agent complies with paragraph (2).
   (2) Any person, corporation, or billing agent that charges
subscribers for products or services on a telephone bill, or on a
bill for noncommunications-related products and services that is
included in the same envelope as a telephone bill, shall do all of
the following:
   (A) Include, or cause to be included, in the bill the amount being
charged for each product or service, including any taxes or
surcharges, and a clear and concise description of the service,
product, or other offering for which a charge has been imposed.
   (B) Include, or cause to be included, for each entity that charges
for a product or service, information with regard to how to resolve
any dispute about that charge, including the name of the party
responsible for generating the charge, a toll-free telephone number
of the entity responsible for resolving disputes regarding the
charge, and a description of the manner in which a dispute regarding
the charge may be addressed.  Each telephone bill shall include the
appropriate telephone  numbers of the commissions that a customer may
use to register a complaint.
   (C) Establish, maintain, and staff a toll-free telephone number to
respond to questions or disputes about its charges and to provide
the appropriate addresses to which written questions or complaints
may be sent. The person, corporation, or billing agent that generates
a charge may also contract with a third party, including, but not
limited to, the billing telephone corporation, to provide that
service on behalf of the person, corporation or billing agent.
   (D) Provide a means for expeditiously resolving subscriber
disputes over charges for a product or service, the purchase of which
was not authorized by the subscriber.  In the case of a dispute,
there is a rebuttable presumption that an unverified charge for a
product or service was not authorized by the subscriber and that the
subscriber is not responsible for that charge.  With regard to direct
dialed telecommunications services, evidence that a call was dialed
is prima facie evidence of authorization.  If recurring charges arise
from the use of those subscriber-initiated products or services, the
recurring charges are subject to this section.
   (f) If an entity responsible for generating a charge on a
telephone bill, or on a bill for noncommunications-related products
and services that is included in the same envelope as a telephone
bill, receives a complaint from a subscriber that the subscriber did
not authorize the purchase of the product or service associated with
that charge, the entity, not later than 30 days from the date on
which the complaint is received, shall verify the subscriber's
authorization of that charge or undertake to resolve the billing
dispute to the subscriber's satisfaction.
   (g) For purposes of this section, "billing agent" is the
clearinghouse or billing aggregator.
   (h)  This section shall become inoperative on July 1, 2001, and,
as of January 1, 2002, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2002, deletes or
extends the dates on which it becomes inoperative and is repealed.

  SEC. 4.  Section 2890 of the Public Utilities Code, as amended by
Section 65.7 of Chapter 1005 of the Statutes of 1999,  is 
amended to read:
   2890.  (a) A telephone bill may only contain charges for products
or services, the purchase of which the subscriber has authorized.
   (b) When a person or corporation obtains a written order for a
product or service, the written order shall be a separate document
from any solicitation material.  The sole purpose of the document is
to explain the nature and extent of the transaction.  Written orders
and written solicitation materials shall be unambiguous, legible, and
in a minimum 10-point type.  Written or oral solicitation materials
used to obtain an order for a product or service shall be in the same
language as the written order.  Written orders may not be used as
entry forms for sweepstakes, contests, or any other program that
offers prizes or gifts.
   (c) The commission may only permit a subscriber's local telephone
service to be disconnected for nonpayment of charges relating to the
subscriber's basic local exchange telephone service, long distance
telephone service within a local access and transport area
(intraLATA), long-distance telephone service between local access and
transport areas (interLATA), and international telephone service.
   (d) (1) A billing telephone company shall clearly identify, and
use a separate billing section for, each person, corporation, or
billing agent that generates a charge on a subscriber's telephone
bill.  A billing telephone company may not bill for a person,
corporation, or billing agent, unless that person, corporation or
billing agent complies with paragraph (2).
   (2) Any person, corporation, or billing agent that charges
subscribers for products or services on a telephone bill shall do all
of the following:
   (A) Include, or cause to be included, in the telephone bill the
amount being charged for each product or service, including any taxes
or surcharges, and a clear and concise description of the service,
product, or other offering for which a charge has been imposed.
   (B) Include, or cause to be included, for each entity that charges
for a product or service, information with regard to how to resolve
any dispute about that charge, including the name of the party
responsible for generating the charge and a toll-free telephone
number or other no cost means of contacting the entity responsible
for resolving disputes regarding the charge and a description of the
manner in which a dispute regarding the charge may be addressed.
Each telephone bill shall include the appropriate telephone number of
the commission that a subscriber may use to register a complaint.
   (C) Establish, maintain, and staff a toll-free telephone number to
respond to questions or disputes about its charges and to provide
the appropriate addresses to which written questions or complaints
may be sent. The person, corporation, or billing agent that generates
a charge may also contract with a third party, including, but not
limited to, the billing telephone corporation, to provide that
service on behalf of the person, corporation or billing agent.
   (D) Provide a means for expeditiously resolving subscriber
disputes over charges for a product or service, the purchase of which
was not authorized by the subscriber.  In the case of a dispute,
there is a rebuttable presumption that an unverified charge for a
product or service was not authorized by the subscriber and that the
subscriber is not responsible for that charge.  With regard to direct
dialed telecommunications services, evidence that a call was dialed
is prima facie evidence of authorization.  If recurring charges arise
from the use of those subscriber-initiated services, the recurring
charges are subject to this section.
   (e) If an entity responsible for generating a charge on a
telephone bill receives a complaint from a subscriber that the
subscriber did not authorize the purchase of the product or service
associated with that charge, the entity, not later than 30 days from
the date on which the complaint is received, shall verify the
subscriber's authorization of that charge or undertake to resolve the
billing dispute to the subscriber's satisfaction.
   (f) For purposes of this section, "billing agent" is the
clearinghouse or billing aggregator.
   (g) This section shall become operative on July 1, 2001.
  SEC. 5.  Section 2890.1 is added to the Public Utilities Code, to
read:
   2890.1.   (a)  The commission shall, on or before
July 1, 2001, adopt any additional rules it determines to be
necessary to implement the billing safeguards of Section 2890,
 as of January 1, 2001,  for the inclusion of
noncommunications-related products and services in telephone bills.
  SEC. 6.  (a) On or before January 1, 2002, the Public Utilities
Commission shall prepare and submit to the Governor and the
Legislature a report on the feasibility of establishing rural
telephone cooperatives or other alternative service configurations,
or both, to promote rural telephone service in the state.  The
commission shall include in the report all of the following:
   (1)  Costs to California ratepayers, telecommunications carriers,
and cooperative members of all feasible alternatives to rural
telephone service.
   (2)  Sources of support for grants, loans, or federal program
moneys and how these sources are currently funded.
   (3) The implications for ratepayers of, and investors in, public
utilities, if rural telephone cooperatives, or other alternative
service configurations, are permitted to expand the scope of their
activities beyond a role as providers of last resort for unserved
rural communities.
   (4) The number of communities or areas of the state that contain
over 20 families that are not served by traditional telephone
service.
   (5) Recommendations concerning appropriate legislation.
   (b) The term "alternative service configurations" includes, but is
not limited to, all of the following:
   (1) Combining federal sources of funding with local subsidies for
construction of telecommunications infrastructure.
   (2) Designing new sources of state funding similar to existing
state high-cost funds pursuant to paragraphs (1) and (2) of
subdivision (a) of Section 270 of the Public Utilities Code.
   (3) Other options being considered by other states or the federal
government to extend telephone service to unserved areas.
  SEC. 7.  No reimbursement is required by this act pursuant to
Section 6 of Article XIIIB of the California Constitution because the
only costs that may be incurred by a local agency or school district
will be incurred because this act creates a new crime or infraction,
eliminates a crime or infraction, or changes the penalty for a crime
or infraction, within the meaning of Section 17556 of the Government
Code, or changes the definition of a crime within the meaning of
Section 6 of Article XIIIB of the California Constitution.