BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2721
                                                                  Page  1

          Date of Hearing:  May 2, 2000

               ASSEMBLY COMMITTEE ON CONSUMER PROTECTION, GOVERNMENTAL  
                        EFFICIENCY, AND ECONOMIC DEVELOPMENT 
                                 Susan Davis, Chair
                    AB 2721 (Wesson) - As Amended:  April 5, 2000
           
          SUBJECT :  Automatic dialing-announcing devices.  

           SUMMARY  :  Prohibits the leaving of a prerecorded message without  
          receiving authorization from a live person, except in specified  
          situations.  Specifically,  this bill  : 

          1)Prohibits a prerecorded message from being left on an  
            answering machine, voicemail, or other message-recording  
            device.  

          2)Prohibits, after July 1, 2001, the use of automatic calling  
            equipment to make telephone connections where no person is  
            available to contact the person called.  

          3)Exempts the 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 the call is in furtherance of an existing  
            business relationship and not related to a new commercial  
            relationship.  

          4)Establishes as an additional exemption from the provisions of   
            this bill any calls that are made for noncommercial purposes.

          5)Specifies that certain delineated situations are exempt from  
            the requirement that an automatic dialing announcement message  
            be preceded by an unrecorded natural voice message and adds  
            fraud protection as one of those situations.

          6)State legislative intent that enaction of this bill will  
            balance privacy rights and public safety concerns with  
            commercial free speech rights.  

           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.








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          2)Requires that a live person introduce all prerecorded  
            telephone messages with specified exemptions including  
            government agencies in case of an emergency, school conveying  
            student attendance information, and cable companies for the  
            purpose of arranging installation.  

          3)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  :  Potential absorbable costs, offset by revenue  
          from fines, to the Public Utitilties Commission and the Attorney  
          General for enforcement of the bill's provisions.  

           COMMENTS  :

           1)Intent and Background of the Bill 

           According to the author, California consumers are being  
            subjected to numerous and repeated "abandoned" telephone  
            calls.  The purpose of this bill is to reduce the number of  
            abandoned calls to zero after July 1, 2001, which is a  
            reduction from the current industry standard of 5%.  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.

          AB 2721 addresses 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  
            there are actual telemarketers to speak with, sometimes a  
            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.

          The author notes that AB 2721 does not create any new penalties.  
             Under existing penalty provisions, violators of the Public  
            Utilities Code would be subject to a maximum fine of $500  








                                                                  AB 2721
                                                                  Page  3

            and/or disconnection of the automatic dialing system.   
            Violators of the Civil Code will be subject to a maximum fine  
            of $1000 and any other relief that the court deems proper.  

           2)Amendments to be Offered in Committee

           The author intends to offer the following amendments in  
            committee to address concerns previously raised with the bill:

             a)   On page 5, lines 31 & 32 and on page 8, lines 6 & 7,  
               delete "including, but not limited to, the sale of a new  
               product" and instead insert "which is unrelated to any  
               product or service currently within the scope of the  
               established relationship.";

             b)   Page 10, line 2, "is available to contact" and insert  
               "or a prerecorded message, as set forth in subdivision (d)  
               of Section 2872, is available for"; and 

             c)   Add Senator Murray as a co-author. 

           




          REGISTERED SUPPORT / OPPOSITION  :   

           Support  

          Privacy Rights Clearinghouse
          The Utility Reform Network
          Utility Consumer Action Network

           Opposition  

          None on file

           
          Analysis Prepared by  :  Robin Hartley / C.P., G.E. & E.D. / (916)  
          319-2089