BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
AB 2721 - Wesson Hearing
Date: June 13, 2000 A
As Amended: May 22, 2000 FISCAL B
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DESCRIPTION
Current state law prohibits, with specified exemptions, the
use of automatic dialing-announcing devices (e.g. automated
dialers broadcasting pre-recorded announcements) between
9:00 p.m. and 9:00 a.m.. One of those specified exemptions
is when the called party has an "existing business
relationship" with the caller. Any person or company who
violates this law is guilty of a misdemeanor, subject to
one year in county jail and/or a maximum fine of $1,000.
Current state law requires when such devices are used, the
person receiving the call must be greeted by a live
operator who must ask whether the called party will give
his or her consent to hear the pre-recorded announcement.
This bill narrows current law's "existing business
relationship" exemption to the live operator requirement to
only cover calls related to the product or service upon
which the business relationship is based.
This bill creates two brand new exemptions to the "live
operator" requirement: One to allow automatic
dialing-announcing devices to be used for fraud prevention
and a second exemption to permit the devices to be used for
calls that aren't made for "commercial purposes."
This bill requires any company using automated dialers to
have a live operator greet the called person - instead of
terminating the call if the automated dialing device dials
faster than the live operator can get to the call - by July
1, 2001.
This bill clarifies that when the user of the automated
dialer reaches an answering machine, consent is not implied
and no message may be left.
BACKGROUND
An "abandoned telephone call" is a phenomenon that occurs
when computers dial telephone calls quicker than the live
operators can pick them up in order to comply with the law
requiring phone call recipients to be greeted by a live
voice.
Telemarketing has long been the subject of legislation and
is often associated with solicitations for long-distance
telephone service. Over the past three years, a number of
bills have been introduced in the Legislature to limit
telemarketing, but none of them have been successful - with
the exception of a "do-not-call" list for the solicitation
of electric service (SB 477 [Peace], Chapter 275, Statutes
of 1997).
Current federal law bans telemarketing between 9:00 p.m.
and 8:00 a.m. and generally conditions the use of automatic
dialing-announcing devices in ways similar to California
law.
QUESTIONS
1.While abandoned telephone calls may be a nuisance, should
any person or company who uses an automated dialing
machine that inadvertently hangs up on people be guilty
of a misdemeanor, subject to up to a year in county jail
and/or a fine of up to $1,000?
2.Since it's highly unlikely the recipient of any such
abandoned call will be able to know whether it was a
company using an automated dialing device that hung up on
them and if so, which company it was, how will this bill
be enforced?
3.This bill creates an exemption to the requirement that
businesses use live operators to greet people before
playing a pre-recorded message for "fraud prevention"
calls and calls that aren't made for "commercial
purposes." What is a "fraud prevention" call and what
are the likely "noncommercial" uses for such machines?
COMMENTS
1)Amendments . The author will propose amendments to strike
Section 2 of the bill, which begins on Page 3, Line 16
and runs through Page 7, Line 3.
2)Hang Up On The Hang-Ups . The author believes abandoned
telephone calls are annoying, an invasion of privacy, and
potentially threatening to certain individuals.
Such calls are the consequence of predictive dialers, a
form of automated dialing where a computer dials
telephone numbers from a database while telemarketers
talk with potential customers. Predictive dialers dial
based on a statistical average of how long the average
telemarketer conversation will last and the likelihood a
person will answer their telephone. Because the system
is based on a "statistical average," inevitably some
called parties will be greeted by silence. This,
according to supporters, is at minimum a nuisance, and it
potentially brings an element of fear to some people who
may think someone is watching their home and/or their
movements.
3)How Will This Be Enforced ? Current law preventing
telemarketers from calling between 9:00 p.m. and 9:00
a.m., prohibiting the use of pre-recorded messages
without a live operator introduction, and banning
pre-recorded messages from being left on answering
machines is, at least conceptually, easy to enforce from
the standpoint that the recipient of the call will know
which company made it.
Under this bill, if a person gets an "abandoned call,"
it's highly unlikely they'll be able to know whether it
was a company using an automated dialing device that hung
up on them and if so, which company made the call.
Granted, a person could have a Caller ID box
(telemarketers are precluded by law from blocking their
numbers to hide them from a Caller ID box) to help
identify the caller, but arguably any business that would
violate this proposed law probably wouldn't be adverse to
violating the state's "no blocking" law.
4)Narrowing An Existing Exemption . Section 3 of the bill
(Page 7, Line 4 through Page 8, Line 39) deals with the
issue of when a company can call a person and simply play
a pre-recorded message without having a live operator
"introduce" the message.
Under current law, these pre-recorded messages can be
used when there's an "existing business relationship."
This allows, for example, your doctor's office to call
and leave a pre-recorded message to confirm an
appointment. It also allows, for example, a store from
which you've purchased a washing machine to call and
leave a pre-recorded message to let you know about an
upcoming sale on dryers.
This bill narrows the use of pre-recorded messages to
instances where the new commercial transaction is related
to a prior commercial transaction. So, using the above
"washer-dryer" example, if this section of the bill were
to become law, the store could call you and leave a
pre-recorded message if it had something to say about
your washing machine (perhaps it's subject to a factory
recall), but it couldn't leave a pre-recorded message to
tell you about a sale on dryers, washing machine soap or
any "related" product.
5)Creating Two New Exemptions . While certain portions of
this measure are aimed at enhancing consumer protections,
this bill also creates two new exemptions from the law
banning the use of pre-recorded messages.
The first exemption permits the devices to be used for
"fraud prevention," but since that term isn't defined in
the bill, it's unclear which companies would be able to
use this exemption and for what purpose. Would this
apply, for example, to credit card companies that offer
"fraud protection/prevention" services for their card
holders? In that case, this new exemption would
effectively defeat the purpose of narrowing the existing
"prior business relationship" exemption elsewhere in the
bill.
The second exemption for calls that aren't made for
"commercial purposes" is more problematic because it
arguably opens the door for a wide variety of groups to
call people using pre-recorded messages that aren't using
them now. This exemption appears to sanction the use of
pre-recorded messages for among other things, non-profit
solicitations as well as campaign and political
fundraising purposes. The author and committee may wish
to consider whether this exemption is too broad and
whether a more narrow exemption should be added to the
existing list of exemptions to permit calls using
pre-recorded messages in certain circumstances. That
list, which is delineated in the bill, allows
pre-recorded messages to be used for school purposes,
non-profit membership purposes, pre-arranged cable
television appointments, petroleum or chemical
emergencies, law enforcement emergencies, and debt
collection.
6)Double Referral . Should this bill be approved by this
committee, the Senate Rules Committee has requested that
it be referred to the Senate Judiciary Committee.
ASSEMBLY VOTES
Assembly Utilities & Commerce Committee(9-2)
Assembly C.P., G.E. & E.D. Committee(6-0)
Assembly Appropriations Committee (14-6)
Assembly Floor (50-25)
POSITIONS
Sponsor:
Author
Support:
Office of Ratepayer Advocates
Privacy Rights Clearinghouse
The Utility Reform Network
Utility Consumer Action Network
Oppose:
None on file.
Randy Chinn
AB 2721 Analysis
Hearing Date: June 13, 2000