BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 50| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 CONTINUED SB 50 Page 2 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 CONTINUED SB 50 Page 3 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 CONTINUED SB 50 Page 4 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 **** END **** CONTINUED