BILL ANALYSIS
AB 2721
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Date of Hearing: April 10, 2000
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Roderick Wright, Chair
AB 2721 (Wesson) - As Amended: April 5, 2000
SUBJECT : Automatic dialing-announcing devices.
SUMMARY : Prohibits leaving a prerecorded message without
receiving authorization from a live person, except in specified
situations. Specifically, this bill :
1)Clarifies the time of use limitations relating to public
utilities to include their affiliates so long as the use is
related to the ongoing operation of facilities or services.
1)Clarifies that certain delineated situations are exempt from
the requirement that an automatic dialing announcement message
be preceded by an unrecorded natural voice message and add
fraud protection as one of those situations.
1)Prohibits a prerecorded message from being left on an
answering machine, voicemail, or other message-recording
device.
1)Prohibits the use of automatic calling equipment to make
telephone connections where no person is available to contact
the person called.
1)Clarifies the exemption relating to use of automatic
dialing-announcing devices (ADADs) to contact persons having
an established business relationship with the person or
organization making the call to ensure that call is
furtherance of the existing business relationship and not
related to a new commercial relationship.
1)Establishes as an additional exemption from the provisions of
this bill any calls that are made for noncommercial purposes.
EXISTING LAW
1)Authorizes the California Public Utilities Commission (CPUC)
to control and regulate the use of ADADs and specifies the
hours during which the devices may not be operated.
AB 2721
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1)Provides for exemptions from regulation and time of use
limitations in various situations, including having an
established relationship with the person using the ADAD.
FISCAL EFFECT : Unknown.
COMMENTS :
1)ADADs are prohibited for use in California unless a live
operator first identifies the calling party and obtains the
called party's consent to listen to the prerecorded message.
Similar provisions are contained in both the California Public
Utilities Code (PU Code) which applies to all ADAD users and
the Civil Code that applies to commercial users. CPUC can
enforce its provisions with fines and disconnection of
telephone service. The Attorney General is authorized to
enforce fines and citizens injured by violations of the civil
statute may file suit for damages.
1)The use of ADADs without the added complement of the live
person announcing the recording is exempted for specific
purposes including parties with an existing relationship,
calls from schools, nonprofit organizations, utilities and
public safety officials. Additional exemptions are provided
for calls made to collect a debt, or any calls generated at
the request of the recipient. This bill expands those
exemptions to include calls related to fraud protection.
Representatives from the finance industry indicate that in an
effort to address potential fraud quickly ADADs are used to
alert the customer as expeditiously as possible. The
exemption relating to calls for debt collection and fraud
protection currently only exist in the Civil Code. This bill
places similar provisions placed in the PU Code.
1)Additional clarification is also provided to allow affiliates
of publicly or privately owned utilities to make calls without
a live person. In a deregulated utility environment, for
example, installation is provided by the regulated telephone
company. Voice mail service, however, is provided by an
affiliate company. The proposed additional exemption allows
use of an ADAD by an affiliate company to alert customers of
the regulated public utility, of systems outages or other
problems with a customer's utility service. This bill also
includes an additional exemption relating to calls that are
placed for noncommercial purposes.
AB 2721
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1)The author also clarifies an exemption for callers using ADADs
to contact persons with whom they have an existing business
relationship. This general exemption has resulted in
companies using an existing relationship to pitch additional
products and services that are not in furtherance of the
existing relationship via recorded messages without first
receiving consumer consent. The author has added clarifying
language to ensure that such calls are in furtherance of the
existing business relationship and not pertaining to a new
commercial transaction.
1)The author also seeks to address a growing problem in the
telemarketing field relating to the use of predictive dialers.
Predictive dialing is a form of automated dialing where a
computer dials phone numbers from a database while
telemarketers converse with potential customers. Predictive
dialers use a computer algorithm to establish a dialing rate
based upon the estimated time it takes to complete a call and
the estimated percentage of busy signals, wrong numbers,
answering machines and other factors. Because predictive
dialers dial more numbers than telemarkters actually speak
with in order to reduce telemarketer down time, sometimes the
connection is made and the telemarketer is not yet available.
Thus, when an individual answers the telephone, there is no
one on the other end.
1)Even some of the most sophisticated systems which "meet the
most stringent codes of dialing practices" have abandoned call
rates of 5% and call delay of up to 5 seconds. The author
reports that one predictive dialer may dial up to 1,600
telephone numbers per hour resulting in up to 80 abandoned
calls per hour. This bill requires that after July 1, 2001,
any automatic equipment that incorporates a storage capability
of telephone numbers to be called may make telephone
connections where no person is available to contact the person
called. The rate for abandoned calls, predictive hang ups and
call delays in California after July 1, 2001 will be 0% rather
than the current industry standard of 5%.
REGISTERED SUPPORT / OPPOSITION :
Support
The Utility Reform Network (TURN)
AB 2721
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Privacy Rights Clearinghouse
Opposition
None of file.
Analysis Prepared by : Carolyn Veal-Hunter / U. & C. / (916)
319-2083