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. AB 2721 Page 2 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