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:         June 26, 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. 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  creates two brand new exemptions to the "live  
          operator" requirement 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. 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.






































          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 calls that aren't made  
            for "commercial purposes."  What are the likely  
            "noncommercial" uses for such machines?

                                     COMMENTS

           
           1)Hang Up On The Hang-Ups  .  The author believes abandoned  
            telephone calls are annoying, an invasion of privacy, and  
            potentially threatening to certain individuals.  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.










                
               2)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.


































           3)Creating A New Exemption  .  While one portion of this  
            measure attempts to enhance consumer protections, this  
            bill also creates a new exemption from the law banning  
            the use of pre-recorded messages.  By exempting calls  
            that aren't made for "commercial purposes" this bill  
            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.

           4)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:
                California Association of Realtors


               Randy Chinn 
               AB 2721 Analysis
               Hearing Date:  June 13, 2000