BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1741|
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UNFINISHED BUSINESS
Bill No: SB 1741
Author: Bowen (D) and O'Connell (D)
Amended: 7/3/00
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
SENATE FLOOR : 22-13, 6/1/00
AYES: Alarcon, Alpert, Bowen, Burton, Escutia, Hayden,
Hughes, Johnston, Karnette, Murray, O'Connell, Ortiz,
Peace, Perata, Polanco, Rainey, Schiff, Sher, Solis,
Soto, Speier, Vasconcellos
NOES: Brulte, Costa, Dunn, Figueroa, Johannessen, Kelley,
Knight, Leslie, Lewis, McPherson, Monteith, Mountjoy,
Poochigian
ASSEMBLY FLOOR : 46-29, 8/29/00 - See last page for vote
SUBJECT : Telecommunications: technology specific area
codes
SOURCE : Author
DIGEST : This bill directs the California Public
Utilities Commission (CPUC) to request authority from the
CONTINUED
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Federal Communications Commission (FCC) to order
technology-specific area codes and seven digit dialing, as
specified.
If area code relief is needed, the CPUC shall exhaust all
number conservation options. If area code relief continues
to be needed the CPUC shall, if authorized by the FCC,
order a technology-specific area code unless the CPUC finds
that either (1) a different type of area code relief is
less disruptive to customers, or (2) the technology
specific area code does not adequately extend the life of
the existing area code.
Assembly Amendments clarify that the request for
seven-digit dialing shall be within the technology-specific
area code and the underlying preexisting area code or
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
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 that technology-specific area code and
the underlying preexisting area code or 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
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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
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
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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
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
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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
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
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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) (Unable to reverify at time
of writing)
County of San Diego
Office of Ratepayer Advocates
OPPOSITION : (Verified 5/31/00) (Unable to reverify at
time of writing)
AT & T
GTE California Incorporated
Cellular Carriers Association of California
MCI WorldCom
Verizon Communications
California Cable Television association
Cel-North Cellular
Sprint PCS
United States Cellular
California Association of Competitive Telecommunications
Companies
ARGUMENTS IN SUPPORT : Historically, area codes have been
created at the convenience of the telephone companies.
This is an artifact of the monopoly era of telephone
service where the telephone company was entrusted to manage
the telephone network in an efficient way. Times have
changed. Now there are dozens of telephone companies, but
the way that area codes are created hasn't changed. The
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process remains one that puts the convenience of the
telephone companies ahead of the convenience of the
telephone customers. It is this old way of thinking that
continued the wasteful process of handing telephone numbers
out to companies in blocks of 10,000, even if a telephone
company only had a handful of customers until very
recently. Because of negative customer reaction to the
proliferation of area codes the federal government started
to reconsider the way it handed out numbers and,
consequently, to reduce the need for new area codes.
Through prodding by California the FCC gave California the
authority to hand out numbers in blocks of 1000 rather than
10,000, as well as other telephone number conservation
measures.
This bill continues the effort to modernize California's
thinking about area codes by putting the convenience of the
customer ahead of the convenience of the telephone
companies. This bill minimizes the need for new area codes
by requiring a telephone number utilization study before a
new area code is created. Once the need for a new area
code is demonstrated, this bill provides a mechanism for
implementing a new type of area code, subject to FCC
approval, that is potentially the least disruptive to
customers. This new type of area code is known as a
technology-based overlay and would contain only wireless
and, perhaps, data numbers. The CPUC would implement this
new type of area code whenever area code relief is needed.
However, if the CPUC finds that a different type of area
code is less disruptive, or that a technology-specific area
code doesn't extend the life of the existing area code long
enough, then the CPUC can implement a different type of
area code.
The author's belief is that given the need for a new area
code, it is far less disruptive to change the numbers of
wireless and data customers than it is to change the
numbers for regular telephone customers.
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
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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
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.
ASSEMBLY FLOOR :
AYES: Alquist, Aroner, Bock, Calderon, Cardenas, Cardoza,
Cedillo, Corbett, Correa, Cox, Davis, Ducheny, Dutra,
Firebaugh, Florez, Honda, Jackson, Keeley, Knox, Kuehl,
Lempert, Longville, Lowenthal, Machado, Maldonado,
Mazzoni, Migden, Nakano, Papan, Reyes, Romero, Scott,
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Shelley, Steinberg, Strom-Martin, Thomson, Torlakson,
Villaraigosa, Vincent, Washington, Wayne, Wesson,
Wiggins, Wildman, Wright, Hertzberg
NOES: Aanestad, Ackerman, Ashburn, Baldwin, Bates, Battin,
Baugh, Brewer, Campbell, Cunneen, Dickerson, Granlund,
Havice, House, Kaloogian, Leach, Leonard, Maddox,
Margett, McClintock, Olberg, Oller, Robert Pacheco, Rod
Pacheco, Pescetti, Runner, Strickland, Thompson, Zettel
NC:jk 8/30/00 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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