BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  SB 50
          Author:   Lieu (D)
          Amended:  4/30/13
          Vote:     21

           
           SENATE ENERGY, UTILITIES & COMMUN. COMM.  :  10-0, 4/16/13
          AYES:  Padilla, Fuller, Cannella, Corbett, De León, DeSaulnier,  
            Hill, Knight, Wolk, Wright
          NO VOTE RECORDED:  Pavley

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8


           SUBJECT  :    Telecommunications:  pay telephones

           SOURCE  :     Author


           DIGEST  :    This bill requires, beginning January 1, 2015, the  
          owners or operators of public telephones, available for public  
          use, that accept any form of payment to post additional  
          information and comply with additional requirements, as  
          specified.  

           ANALYSIS  :    

          Existing law:

          1. Requires every owner or operator of a coin-activated public  
             telephone to post on or near the telephone the name of the  
             provider, a toll-free number for contacting the provider,  
             charges for each available service, and a statement that the  
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             provider will respond to inquiries about the terms of  
             service.

          3. Requires the Public Utilities Commission (PUC) to adopt and  
             enforce requirements for coin-activated and credit-card  
             activated public telephones that include posting instructions  
             for local and long distance calling, a number for customer  
             complaints, and a notice that surcharges may apply to an  
             operator-assisted and calling card call.

          This bill:

          1. Revises these requirements effective January 1, 2015, to  
             apply to public telephones that accept any form of payment  
             and requires a notice posted on or near a public telephone  
             that calls activated by a card or other payment device may  
             cost more than coin-activated calls.

          2. Requires, effective January 1, 2015, that the operator on a  
             public telephone call activated by any form of payment  
             identify itself to the consumer at the beginning of each  
             call, quote the complete rates and charges for the call, and  
             permit the customer to terminate the call before it is  
             connected and any charge incurred.

           Background
           
          The growth of wireless telephone service has made the public  
          payphone somewhat of a historic relic, with California now  
          having only about 30,000 pay telephones statewide, down from  
          about 175,000 in 1998, according to the PUC.  But payphones  
          still offer a vital means of communication for persons without  
          wireless service, especially in airports, hospitals, and other  
          public places.  Traditionally activated by inserting coins, many  
          payphones today also are activated with calling cards, credit  
          cards, and debit cards.


          The rates charged for calls made at public telephones are not  
          regulated.  However, state law requires specified information be  
          visibly posted on or near payphones, including the following:


           The name and toll-free number of the provider of  

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            operator-assisted services;


           Applicable charges for each available operator-assisted  
            service;


           A statement that the provider will respond to inquiries about  
            the terms of service; and

           A statement that surcharges may apply to operator-assisted and  
            calling card calls.

          Federal regulations require similar notifications on public pay  
          telephones, and also provide for the right of the customer to  
          get a quote of all charges for any operator-assisted call before  
          the call is connected and to choose to terminate the call before  
          any charge is incurred.  The federal rules apply only to  
          interstate calls, however.

          The PUC currently employs three payphone inspectors who  
          routinely conduct targeted inspections on public telephones  
          across California to ensure compliance with regulatory  
          requirements.  The inspection checklist includes whether public  
          telephones have required signage relating to the cost of calls  
          and whether calls made are charged accurately.  Inspectors  
          notify public telephone owners of violations through Corrective  
          Action Report letters and conduct follow-up inspections to  
          ensure that deficiencies have been corrected.  Although the PUC  
          has no specified penalties for payphone operators, state law  
          authorizes the PUC to order disconnection of service to a public  
          telephone operator in violation of PUC rules.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

           SUPPORT  :   (Verified  4/30/13)

          California Airports Council
          California Public Utilities Commission
          California Senior Legislature
          Congress of California Seniors
          Division of Ratepayer Advocates
          Los Angeles World Airports

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          Vietnam Veterans of America, California State Council


           ARGUMENTS IN SUPPORT  :    According to the author's office, this  
          bill enables customers to know beforehand the actual costs of  
          using a credit, debit, or calling card, or other payment device,  
          for placing a call from a public telephone.  This bill responds  
          to complaints and media reports of customers unknowingly being  
          charged as much as $20 for 20 seconds to make these types of  
          calls.

          The Division of Ratepayer Advocates supports this bill "which  
          would extend existing coin-activated payphone regulation to  
          payphone calls made by using any form of payment.  This bill  
          would eliminate the difference between regulations governing  
          coin-activated payphone service and payphone service paid for  
          using other payment methods.

          "SB 50 would extend important cost and contact disclosure  
          requirements to all public payphone services regardless of the  
          payment method.  DRA supports this pro-consumer bill and we look  
          forward to working with you to ensure this bill is enacted into  
          law."


          JG:d  4/30/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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