BILL ANALYSIS
AB 2690
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Date of Hearing: April 19, 2010
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 2690 (De La Torre) - As Amended: April 8, 2010
SUBJECT : Public utilities: call centers.
SUMMARY : Requires customer call centers for a public utility,
upon request, to provide specified information to customers
including the location of the call center and the entity that
operates the call center, and to transfer calls from outside the
state or country to a call center located in the state or
country, as specified. Specifically, this bill :
1)Requires a customer call center for a public utility, upon
request, to inform any customer that telephones the call
center the location of the call center and whether the call
center is operated the utility or is a contracted vendor of
the utility.
2)Requires a customer call center for a public utility that is
outside the state, upon request and availability, to direct a
telephone call to a call center located in the state.
3)Requires a customer call center for a public utility that is
outside the United States, upon request and availability, to
direct a telephone call to a call center located within the
United States.
4)Requires the California Public Utilities Commission (PUC) to
investigate consumer complaints of false information being
disclosed as to the location or ownership of a call center and
to take appropriate action to punish intentionally false
claims and to deter false claims from being made in the
future.
5)Requires the PUC to investigate consumer complaints that a
customer call center failed to direct a telephone call as
required by the provisions of the bill and to take appropriate
action to punish intentional failures to comply with the
bill's provisions regarding the redirection of out-of-state
and out-of-country call center calls, and to deter failures to
comply in the future.
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6)Requires public utilities to report annually to the PUC,
beginning January 1, 2012, the location of each customer call
center for the utility, and the number of telephone calls
received by each call center from the utility's California
customers. The PUC must annually provide a summary of this
information to the relevant policy committees of the
Legislature. Reporting requirements become inoperative on
January 1, 2016.
EXISTING LAW :
1)Provides the California Public Utilities Commission (PUC) with
regulatory authority over public utilities.
2)Establishes requirements for equipment, practices, and
facilities for public utilities.
3)Establishes the Digital Infrastructure and Video Competition
Act (DIVCA) to open broadband and video service markets by
authorizing the issuance of state video service franchises to
cable and telephone corporations.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, the purpose of this bill is
to return jobs to California and protect consumers' confidential
information.
The author notes that consumers in our 21st-century high-tech
economy increasingly use the telephone or Internet to buy goods
and services and seek customer service. The author states,
"Most telephone and Internet-based customer service transactions
are provided by customer service or sales representatives
located in centralized call centers. In the U.S. there are
millions of workers in these call centers. However, these
numbers are changing fast and for the worse.
"Many companies and public entities no longer operate their own
customer sales and service operation, but contract with a third
party call center operator to provide the service. Information
technology and marketing techniques have transformed customer
sales and service delivery from what was historically a local,
decentralized and personal labor market to one characterized by
centralized remote servicing via technology-mediated call
centers."
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The sponsor also contends that call centers - whether located in
California or elsewhere - have access to confidential
information such as Social Security numbers, account numbers,
and birth dates, which can make the consumer vulnerable to
identity theft.
1) Background: Four years ago, the Legislature approved DIVCA
under AB 2987 (Nunez/Levine), Chapter 700, Statutes of 2006,
which created a state franchising process for companies
providing competitive video services in California. The bill
provided that companies can obtain a franchise to provide video
services across the state with the CPUC instead of negotiating
for individual franchises which each local entity. The bill
required the CPUC to begin accepting applications for state
franchises no later than April 30, 2007. The CPUC issued its
rules for new applications in February 2008. Since then, at
least two companies, Verizon and AT&T, have both applied for and
received a state-issued franchise.
Since the passage of DIVCA, concerns have been raised that the
telecommunications companies that entered the video service
sector have actually cut jobs in California, despite promises of
job creation when DIVCA was being debated in the Legislature.
Senator Padilla and Assemblymember Fuentes sent a letter to the
CPUC in October 2009 requesting that the CPUC commence an
inquiry into job cuts, out-of-state job transfers, and layoffs
by Verizon and AT&T, noting that between August 2008 and August
2009 these companies cut more than 2,000 jobs. It is presumed
that many of these cuts are due to the relocation of call
centers outside the state or country, although this has not been
substantiated and there is ongoing debate about whether
employment reporting requirements under DIVCA are being met.
Senator Padilla and Assemblymember Fuentes made an inquiry to
the CPUC in February of this year to ascertain California
domestic employment levels at AT&T and Verizon.
2) Opposition : Telecommunications companies that operate
nationally and internationally note that customer calls are
typically routed to the first call center that is the
subject-matter expert in the reason for the call, regardless of
location. They are concerned that this bill may not in the best
interest of consumers due to time lost being re-routed from one
call center to another, ultimately to be sent to a call center
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in California that may not specialize in their specific
complaint. They also point out a possible technical barrier to
implementing the bill: while call center employees are able to
transfer calls (i.e. to different departments or customer
service areas), they don't necessarily have the ability to
transfer calls to a call center located in a particular state.
Opponents also argue that the bill unfairly targets public
utilities. "Computer or software companies, banks, credit card
issuers, insurance companies or large retailers all have
customer call centers and do not face requirements like those in
AB 2690? requiring some companies but not others to make certain
disclosures to callers may be a violation of the First
Amendment."
Opponents also believe the bill may violate the Commerce Clause
of the United States Constitution by infringing on interstate
commerce.
Finally, opponents contend the bill will have the inverse effect
of its stated intent by increasing regulatory costs and driving
companies to locate outside the state.
As currently written, this bill applies to all public utilities
in the state. The committee may wish to consider whether this
bill should be limited to call centers of telecommunications
utilities, given the concerns over job losses in that sector
since the passage of DIVCA. Alternatively, the committee may
wish to consider whether a remedy should be pursued through the
PUC in the form of a formal inquiry (as requested by Senator
Padilla and Assemblymember Fuentes), or in the form of more
stringent reporting requirements under DIVCA.
Suggested technical amendments:
Page 3, line 22 of the bill refers to "telephone corporation,"
while the remainder of the bill applies to all public utilities.
For consistency, the committee may wish to amend this language
as follows:
Page 3, line 22, after "the" strike out "telephone corporation"
and insert "public utility."
REGISTERED SUPPORT / OPPOSITION :
AB 2690
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Support
Communications Workers of America, AFL-CIO (Sponsor)
Communications Workers of America, Local 9410 (37 member
letters)
Sacramento Central Labor Council AFL-CIO
Communications Workers of America, Local 9404
Communications Workers of America, Local 9586
Communications Workers of America, Local 9503
Opposition
AT&T
CalCom
California Association of Competitive Telecommunications
Companies (CALTEL)
California Chamber of Commerce (CalChamber)
California's Independent Telephone Companies (CITC)
CTIA - The Wireless Association
Frontier Communications
SureWest
Verizon
Verizon Wireless
Analysis Prepared by : Angela Mapp / U. & C. / (916) 319-2083