BILL ANALYSIS 1
1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
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|SB 932 - Bowen |Hearing Date:April 13, | S|
| |1999 | |
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|As Amended:April 6, 1999 | | B|
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DESCRIPTION
Current law requires telephone service to be provided in a
just and reasonable manner.
This bill creates several new protections for telephone
customers:
1.Customers have a five day right of recission on new
telephone services and features;
2.A customer may not be charged for a service which has not
been used;
3.Customers shall be reimbursed for any charge resulting
from the inadvertent or unauthorized used of the service;
4.Telecommunications companies must provide customers with
clear information prior to purchase;
5.The California Public Utilities Commission (CPUC) shall
create a means by which customers may easily compare
prices among companies;
6.Any advertisements for telephone service which refer to
price must disclose complete pricing information;
7.A local telephone directory must be provided to customers
without charge and directories for neighboring
communities shall also be provided without charge upon
request;
8.Service deposits may not exceed two months worth of
bills;
9.Local telephone service may not be disconnected for
nonpayment of charges imposed by a third-party; and,
10. Social security numbers may be required only if no
other means of determining creditworthiness is available.
BACKGROUND
Over the years, a number of telephone consumer protections
have been attempted and written into law. While the
majority of telephone companies provide satisfactory
service, marketing abuses continue and it's not uncommon
for consumers to feel pressured, misled, or taken
advantage of. Recent investigations into misleading and
hidden charges with dial-around services (e.g. 10-10-xyz)
underscore the potential pitfalls of the modern
telecommunications market.
This bill arises from the Committee's introductory hearing
on telecommunications issues and discussions between the
author, various consumer groups, and the telecommunications
industry. While it is premature to say the groups have
reached any type of consensus, the list of protections
covered in the bill represent areas where there is the most
agreement. Should the bill move forward, consumer groups
have asked the author and the telecommunications industry
to consider addressing a host of other issues, such as:
Making directory information available on the
Internet;
Requiring advertising to include unit pricing
disclosure;
Requiring neutral information about Caller ID to be
offered to customers;
Requiring free blocking for non-essential services;
Barring the transfer of customer-specific information
among company affiliates;
Requiring the maintenance of a detailed,
California-specific complaint record;
Expanding the comprehensive energy consumer
protections to apply to telephone customers; and,
The creation of a low cost dispute resolution process.
The author intends to address these and other issues as
part of a stakeholder process similar to one used by the
author last year in crafting AB 1994, which created some
consumer protections for calling card purchasers. That
bill was approved by this Committee and signed into law.
COMMENTS
1)This bill is supported by TURN, ORA, and UCAN, all of
which believe that current law provides inadequate
consumer protection. UCAN in particular has documented a
number of consumer problems.
2)The provision of the requiring a five day right of
recission is similar to rights of recission for other
consumer services, such as health clubs, electric
service, and door-to-door sales over $25. MCI would like
to see this provision clarified so it doesn't deal with
changes in long distance service provider that are
currently covered under existing anti-slamming rules.
GTE believes this provision is already covered under a
CPUC regulation, while Pacific Bell argues that such a
provision should only apply to residential customers.
3)The provision which bars charging for a service the
customer does not use is intended to deal with a service
which was not requested by the customer but which
nevertheless was activated by the telephone company.
This provision is intended to permit the customer to
notify the company that the service was not requested and
to require the company to remove the service without
charge.
4)The provision requiring reimbursement for any charge
resulting from the inadvertent use of a telephone service
was prompted by the ease with which a charge can be
mistakenly incurred for three-way calling.
5)The provision requiring all advertising that refers to
price to include complete pricing information is similar
to what's contained in current law for calling cards
created by AB 1994 (Bowen), Chapter 802, Statutes of
1998, and is intended to deal with the problem of hidden
charges. GTE argues such a requirement is overly broad,
that complete pricing information is not always
succinctly available, and that it singles out telephone
service providers.
6)The requirement to provide free telephone directories is
intended to deal with circumstances where a customer is
near the boundary of the area covered by the directory.
By permitting customers to request a free directory in
the neighboring community, they'll have a means of
avoiding the $0.75 charge for directory assistance.
Pacific Bell believes it's inappropriate to impose
mandates on directory publishers because the business is
competitive and that mandates imposed on Yellow Pages
directories may be unconstitutional. Others are
concerned about circumstances where they are not
directory publishers in the neighboring area and would
have to purchase a directory on behalf of their customer.
The author and Committee may wish to consider amending
the bill to clarify that the "neighboring directory"
requirement doesn't apply to Yellow Pages directories or
in instances where the local provider doesn't provide
telephone service to the neighboring community.
7)The provision limiting deposits to two months worth of
bills is similar to current law which limits deposits for
the establishment of electric service and is designed to
ensure that high deposit requirements don't prevent
people from establishing basic telephone service. GTE is
concerned that the deposit maximum is too low, especially
for customers with a poor credit history.
8)The provision preventing telephone service providers from
disconnecting local service for nonpayment of charges for
other services is to prevent companies from using the
threat of losing local telephone service as leverage to
obtain payments owned to third parties for other
services. GTE and Pacific Bell believe this provision
should be modified to apply only if the charges are
disputed. Others raise the circumstance when a single
company bundles local, long-distance, and wireless
service. Under those circumstances, should the
non-payment of, for example, wireless charges allow the
provider to terminate local service?
POSITIONS
Support:
Office of Ratepayer Advocates
TURN
Oppose:
GTE California Inc.
Pacific Telesis Group
Randy Chinn
SB 932 Analysis
Hearing Date: April 13, 1999