BILL ANALYSIS
AB 2545
Page 1
Date of Hearing: May 5, 2010
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 2545 (De La Torre) - As Introduced: February 19, 2010
Policy Committee: Utilities
Vote:14-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the Public Utilities Commission (PUC) to open
or expand the scope of a proceeding to determine an equitable
manner for mobile phone service providers to collect a 911
surcharge from users of prepaid communications services-i.e
prepaid calling card telephone service and prepaid wireless
calling service.
FISCAL EFFECT
Absorbable costs (about $95,000) for three existing positions
devoted part-time to the rulemaking.
COMMENTS
1)Background . Postpaid service is a plan in which phone service
is provided under a long-term contract and paid for on a
monthly basis. At the end of each month, the carrier
calculates charges for all of the services the customer has
used and sends the user a bill. Prepaid service refers to
phone service plans where an individual pays for the service
in advance. Prepaid plans typically require a customer to buy
a predetermined amount of calling minutes. Prepaid services
are generally offered via two products: prepaid calling cards
and prepaid wireless telephones.
Current law imposes the state 911 surcharge, as well as a
variety of public purpose surcharges for low-income, and rural
assistance programs and programs for the disabled. The
surcharges are calculated based on the amount paid for all
phone calls that originate and end within the state. These
AB 2545
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intrastate calls are the only calls over which any state has
the authority to impose a surcharge.
2)Purpose . This bill is intended to create parity in the
funding of the 911 emergency response system between users of
post-paid service and prepaid services. When the usage is
calculated on post-paid service, at the end of the billing
cycle, the carrier can easily determine how much that customer
spent on intrastate calls, apply the 911 surcharge and then
remit the surcharge revenue to the appropriate jurisdiction.
The collection of the 911 surcharge and other fees is more
difficult for prepaid calling plans. When a user buys a
prepaid card for a specified number of minutes, there is no
way to predict how many of those minutes will be spent on
intrastate calls. Due to this difficulty in determining the
appropriate surcharge, some carriers pay the fees based on
estimates of the proportion of calls that will be intrastate.
Other carriers appear not be paying the surcharge at all. The
PUC is currently auditing the funds over which they have
jurisdiction to get a better understanding of how much prepaid
carriers have been paying.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081