BILL ANALYSIS 1 1 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 2 7 2 1 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