BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1741|
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THIRD READING
Bill No: SB 1741
Author: Bowen (D) and O'Connell (D)
Amended: 5/31/00
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 7-2, 4/11/00
AYES: Bowen, Alarcon, Hughes, Mountjoy, Murray, Peace,
Solis
NOES: Brulte, Kelley
NOT VOTING: Speier, Vasconcellos
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
SUBJECT : Telecommunications: technology specific area
codes
SOURCE : Author
DIGEST : This bill directs the Public Utilities
Commission (PUC), in the manner in which it creates new
area codes, to request authority from the Federal
Communications Commission (FCC) to order
technology-specific area codes, to seek FCC approval for
seven digit dialing within affected area codes, and to
require specified PUC action prior to approving new area
codes.
Senate Floor Amendments of 5/31/00 add a legislative intent
statement and provide increased flexibility to the PUC.
ANALYSIS : Current law requires the California Public
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Utilities Commission (CPUC) to develop and implement any
measures it deems available to efficiently allocate
telephone numbers.
This bill states legislative intent that when the PUC has
no reasonable alternative other than to create a new area
code, that the PUC do so in a way that creates the least
inconvenience for customers.
This bill requires the CPUC to request authority from the
Federal Communications Commission (FCC) to order telephone
companies to assign telephone numbers dedicated to wireless
and data usage to a separate area code and to permit seven
digit dialing within the affected area codes.
This bill requires that before the CPUC creates any new
area code it must first perform a telephone number
utilization study and implement all reasonable telephone
number conservation measures.
If the PUC is granted the authority to implement
technology-specific area codes and determines that further
area code relief is needed, they are to utilize that
authority when creating a new area code.
The bill gives the PUC the flexibility to forgo the
technology-specific area code if it finds that either (1)
instituting a technology-specific area code is more
disruptive to customers, or (2) instituting a
technology-specific overlay inadequately extends the life
of the area code.
The bill precludes the CPUC from implementing any authority
granted by FCC, pursuant to its request, in a manner that
impairs the ability of a customer to have number
portability.
Background :
Coming Soon: Your Own Personal Area Code . After starting
with three area codes in 1947, California had 13 area codes
in 1992, which mushroomed into 25 area codes by the end of
1999. At the current pace, the CPUC expects California to
have 41 area codes by the end of 2002. The Los Angeles
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area has been at the leading edge of area code expansion,
with the number of area codes tripling since the early
1980's. The San Francisco Bay Area is not far behind --
until recently it had four new area codes set to take
effect by the end of this year.
The growth in the number of area codes has several
practical implications in people's every day lives as phone
users are forced to adapt to new dialing habits, re-program
their telephone devices, dial more calls using 11 digits
rather than the traditional 7, and more. Businesses are
often forced to change stationery and advertisements, as
well as lose any "equity" they may have built up with their
long-standing telephone numbers.
Reasons Behind The Area Code Explosion . The growth in the
demand for new area codes can be attributed to three basic
realities:
First, deregulation and the emergence of new telephone
companies has dramatically increased the demand for new
telephone numbers, as these new companies all need their
own numbers to sell to customers. For example, in the
early 1980's there were only a handful of telephone
companies needing telephone numbers in the 310 area code.
Now, 53 telephone companies have the right to demand an
allocation of telephone numbers in the 310 area code alone.
Second, technology has made new forms of communications
available and affordable to people and businesses. Most
people no longer have just one home number and one work
number -- they have numbers dedicated for pagers, wireless
telephones, internet service, and fax machines.
Furthermore, some of the "point of sale" credit card
verification terminals that have popped up at grocery
stores, gas stations, and other merchants require their own
phone lines.
Third, the FCC regulations on how telephone numbers are
handed out to companies haven't kept up with deregulation
or technology. For example, until recently the FCC only
allowed numbers to be handed out in blocks of 10,000 - even
if a telephone company only has a single customer. So, as
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a result of the emergence of new telephone competitors,
more blocks of 10,000 numbers are being handed out (thus
draining the pool of available numbers more quickly), and
as a result of people's use of new technologies that
require dedicated phone numbers, the numbers within those
blocks are being exhausted more rapidly.
The Long Arm Of The Law . California is not free to deal
with telephone numbers in any way it sees fit because
Congress has given the FCC the responsibility for telephone
number administration. Consequently, the FCC has limited
the states' discretion when it comes to dealing with
telephone numbering issues.
For example, the FCC prevents states from allocating
telephone numbers on the basis of technology (i.e. separate
area codes for cellular telephones and pagers), known as a
technology overlay or a service specific overlay. It also
requires that whenever an overlay area code (described
later) is created, all calls within that area code and the
overlaid area code require 11 digits to be dialed with
every call. The CPUC has requested that the FCC permit the
use of service specific overlays but has not requested
implementation of 7-digit dialing.
Responding to widespread public concern, including requests
from the chair of the Senate Energy, Utilities and Commerce
Committee, the CPUC and other states, the FCC in September
1999 granted California the authority to allocate numbers
in blocks of 1,000 rather than 10,000. On March 17, 2000,
the FCC announced it had endorsed a national policy of
allocating telephone numbers in blocks of 1,000, rather
than 10,000.
Overlay vs. Split . Historically, new area codes have been
created by geographically splitting existing area codes,
which forces people and businesses located in the "new"
area to get new telephone numbers. This is obviously
inconvenient for people and businesses that have to
re-program machines, let their friends or customers know
about the new number and, in the case of a business,
reprint stationery, change advertisements, and much more.
A long-discussed alternative way of creating a new area
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code is the "overlay," where a second area code is laid on
top of an existing area code. The main advantage of an
overlay is no one is required to change their existing
telephone or fax numbers - only people getting new numbers
would receive the new area code even though they'd
physically be located in the "old" area code territory.
The primary downside is that everyone has to dial eleven
digits (1 + area code + phone number) on all telephone
calls - even when calling a person in the same area code,
which is a federal regulation adopted at the behest of many
telephone companies. More fundamentally objectionable to
many people is that in an overlay, a person could have two
different area codes in their own home, which goes against
the entire concept of what everyone understands an "area
code" to be. The CPUC had previously proposed overlays in
many area codes in the state, but earlier this year it
withdrew those proposals and instead opted for a strategy
of forcing the telephone companies to utilize their
existing numbers more efficiently.
Utilization Studies Find Unused Numbers . As part of its
analysis of the need for a new area code in the 310
territory, the CPUC performed a telephone number
utilization study. The 310 has been on the bleeding edge
of area code controversy, as it was the first area code for
which a geographic overlay was proposed. That study found
that there were as many as three million unused telephone
numbers which could be used by customers -- a surprising
amount of available numbers in an area where telephone
number resources were supposedly so exhausted that a new
area code was to have been implemented in August 1999. The
CPUC now believes that a new area code in the 310 won't be
needed until at least June 2001.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 5/31/00)
County of San Diego
Office of Ratepayer Advocates
OPPOSITION : (Verified 5/31/00)
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AT & T
GTE California Incorporated
Cellular Carriers Association of California
MCI WorldCom
Verizon Communications
California Cable Television association
Cel-North Cellular
Pacific Bell Wireless
Sprint PCS
United States Cellular
California Association of Competitive Telecommunications
Companies
ARGUMENTS IN SUPPORT : Proponents argue in response to
the opposition:
1.They say: seven million wireless phone owners must have
their phones physically reprogrammed.
The truth: This bill requires no one to have their
phones reprogrammed. If the CPUC obtains the federal
authority, then the CPUC will have to decide whether to
apply the wireless area code to new wireless customers,
in which case no one has to reprogram their phones, or to
switch existing wireless customers. This bill gives the
CPUC the authority to decide if they get permission from
the FCC.
2.They say: The bill creates major customer inconveniences
including stationary changes, advertising relistings, and
multiple area codes.
The truth: All new area codes create these
inconveniences. It is because of these inconveniences
that the author is sponsoring this bill. It is important
to realize that without this bill these inconveniences
would still occur because new area codes are still being
created.
The fair comparison is what would happen in the absence
of this bill versus what would happen if this bill were
to become law. Without this bill the inconveniences that
the CCAC complains about would continue to occur. The
ongoing, relentless creation of area codes has created
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much inconvenience for people and businesses. With this
bill the customer inconveniences would be limited to
wireless customers and, potentially, data customers, such
as ATM lines and paypoint terminals. The author believes
that given the choice between changing the telephone
numbers for half of all customers, which would happen in
an area code split, versus changing the numbers for
wireless and data customers, the better choice is the
latter.
3.They say wireless did not create the number shortage. We
don't disagree. But there is a rationale basis for
treating wireless numbers, including pager numbers,
differently because wireless customers use the telephone
differently, and are less sensitive to their area code
than non-wireless users.
Note that this bill requires the CPUC to go to the FCC
and ask for permission. If the FCC does not grant
permission then the wireless/data overlay won't occur.
ARGUMENTS IN OPPOSITION : Opponents argue that
implementing wireless overlap will seriously impede the
growing competition between wireless and wireline carriers.
They feel that establishing a separate, unfamiliar area
code for wireless customers will discourage consumers' use
of wireless service as a competitive alternative to
wireline telephone service. Opponents argue, in addition,
that "in a dynamic and competitive telecommunications
market where customers can choose between services, the
inconvenience of having to dial eleven digits for most
calling becomes a competitive disadvantage.
Opponents believe that a separate area code for wireless
telephones will cause more harm than good for consumers.
They argue:
1.Seven million of the 11 million wireless phone owners
must have their phones physically re-programmed by
bringing them into their service providers. The result:
a colossal consumer/constituent hardship.
2.Other major consumer inconveniences include: stationary
changes, advertising relistings; multiple area codes for
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businesses and single family homes.
3.Wireless did not create the area code number shortage but
is being targeted as a quick fix, and an expensive one at
that.
4.A wireless specific area code for California will not
solve the area code problem. If anything, it will cause
further complications.
5.SB 1741 fails to embrace the true solution: namely,
number pooling.
6.Late last year, the CPUC requested authority from the FCC
to utilize area code overlays; that request is still
pending. This bill would require the CPUC to make the
same request again. However, if the authority is granted
by the FCC, this bill takes away the CPUC's discretion in
the matter and will require the use of overlays.
NC:jk 5/31/00 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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