BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
SB 920 - Yee Hearing Date:
April 20, 2010 S
As Amended: April 7, 2010 FISCAL B
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DESCRIPTION
Current orders of the California Public Utilities Commission
(CPUC), for the purpose of protecting the privacy of customers
with unpublished phone numbers, requires telephone directory
publishers to print on the inside first page of the directory a
toll-free number that a recipient can call to discontinue
further directory deliveries and requires publishers to
discontinue delivery upon request.
This bill would codify that requirement for the purpose of
reducing telephone directory waste and specify the exact opt-out
message that publishers must print on the front cover of each
directory.
Current law establishes a minimum content requirement for
entities that use newsprint in commercial printing, defined to
include directory publishers, to use at least 50 percent
recycled-content newsprint.
Current law establishes a waste diversion goal that 50 percent
of telephone directories distributed in California be recycled.
This bill would require the CPUC to require directory publishers
to demonstrate compliance with recycled-content newsprint laws,
provide information about local recycling programs, and
demonstrate participation in a program or organization to
promote directory recycling.
BACKGROUND
Local exchange carriers (LECs) are required to provide each
residential telephone customer a free white pages directory with
an alphabetical listing of subscribers, excluding subscribers
who request an unpublished number. LECs also are required by
statute or CPUC order to include in their directories
information about telephone service during an emergency,
emergency services available by calling 911, coin- and credit
card-activated pay phones, operator-assisted services,
monitoring of telephone conversations, a list of telephone
number prefixes that can be called without a toll charge, and
contact information for competitive local exchange carriers.
The CPUC has recognized the "customer guide" pages at the front
of directories as "an essential source of information regarding
telephone service rates, terms and conditions." Directories
also routinely include contact information for government
agencies and local services.
Aside from requiring this information in white pages, directory
publishing is substantially unregulated. LEC directory
subsidiaries and independent publishers are not required to be
certified by the CPUC, although LECs are required to submit two
copies of each directory to the CPUC's Communications Division.
Existing law provides that the CPUC has no jurisdiction over
classified telephone directories (yellow pages) or commercial
advertising in white pages, except to investigate and consider
advertising revenues and expenses in connection with
establishing rates for other services. Thus, the CPUC generally
has no jurisdiction over the third-party vendors that publish
directories in competition with LEC directories, estimated to be
about 24 companies publishing 244 titles in various markets
statewide.
Opt-Out Requirement - In order to promote a level playing field
in the competitive directory market, the CPUC has required LECs
to provide third-party vendors with subscriber information to
enable directory delivery. In a 1998 order, the CPUC granted
the request of third party vendors to require LECs to provide
address information of customers with unlisted numbers, but with
a condition - any directory publisher, including LECs, that
delivers directories to these "nonpub" customers must provide a
toll-free number printed on the first page of the directory that
the recipient can call to inform the vendor not to deliver its
directory to that address in the future, and the publisher must
discontinue delivery upon request (D.97-01-042, modified by
D.98-01-057). The purpose of this "opt-out" requirement is to
protect the privacy of "nonpub" customers.
Customers Choose to Opt-Out - According to the CPUC, a data
request of LECs revealed that 18,737 subscribers have opted-out
of directory delivery for the current year's directory.
However, according to the CPUC, AT&T did not respond to the data
request so the total number of customers statewide who have
chosen to opt-out is unknown but surely would be substantially
higher given AT&T's large customer base.
Recycling Directories - Since the early 1990s, state law on
minimum content has required persons that use newsprint in
commercial printing, defined to include directory publishers, to
use at least 50 percent recycled-content newsprint and to
certify compliance with the California Integrated Waste
Management Board, which is authorized to enforce this
requirement, impose a fine for noncompliance, and refer persons
submitting false certifications to the Attorney General for
prosecution for fraud. Current law on waste diversion
establishes a state goal that 50 percent of telephone
directories be recycled. The California Department of Resources
Recovery and Recycling (CDRRR), the successor to the board, has
no recent data on compliance with these provisions.
Directory Waste - According to the Product Steward Institute,
telephone books represent significant tonnage in the waste
stream (660,000 tons per year). The CDRRR states that phone
books and directories comprised an estimated 24,149 tons of the
total disposed waste stream in California in 2008, an amount
that has increased with the growth of third-party directory
publishers. According to a report by the Environmental
Protection Agency (EPA), under national average landfill,
recycling, and manufacturing conditions, not publishing a phone
book reduces greenhouse gases by about three times as much as
recycling.
COMMENTS
1) Author's Purpose . According to the author, telephone
books have become wasteful and obsolete with the advent of
smart phones, Internet search engines, and free online
directory services, and many customers would prefer to not
receive a telephone directory. This bill would strengthen
the current opt-out requirement so that the opt-out phone
number would be more prominently displayed on directory
covers. The author also claims that this bill would help
reduce waste and consumer utility costs while conserving
resources and protecting the environment.
2) CPUC Jurisdiction . This bill would require the CPUC to
require both telephone corporations and third-party
directory vendors to comply with the opt-out and recycling
provisions. The CPUC currently has jurisdiction over
telephone corporations that publish directories (i.e.,
LECs) but not over third-party vendors, except as ordered
to comply with the 1998 order as a condition of obtaining
nonpub customer address information. Directory publishing
also is a competitive, unregulated business under federal
law. Thus, this bill would require the CPUC to enforce
requirements on directory publishers over which they
generally have no jurisdiction.
3) Opt-out Requirement . This bill would require all
directory publishers to print the following message on the
front cover of all directories:
TO DISCONTINUE DELIVERY OF TELEPHONE DIRECTORIES, OR
TO RECYCLE AN OLD DIRECTORY, PLEASE CALL [telephone
number] OR VISIT [Internet Web site].
This requirement to include an opt-out notification in all
directories could be viewed as duplicative of the
requirement in the CPUC's 1998 order, even though it is for
a different purpose. However, review of a sample of
directories revealed that publishers have not included this
notice in directories as required by that order, and CPUC
staff has acknowledged a lack of enforcement of this
requirement. Some directories included on inside pages
(not the first page) a number to call to "change/increase
the quantity of books you are receiving," which is, at
best, a very indirect way to refer to the option to stop
delivery. Thus, a statutory requirement with the specified
text may be a more effective way to ensure directory
recipients get notice of how to opt-out of delivery.
4) Customer Access to Information in Directories .
According to the author, many customers would prefer not to
receive a directory because they can get telephone numbers
from an Internet Web site or other sources. On the other
hand, TURN cites a survey showing most customers do prefer
to receive a directory, especially elderly and low-income
persons. Customers who opt-out of receiving a directory
and do not have access to free directory information may
have to use 4-1-1 directory assistance to obtain some
numbers. The typical LEC rate for directory assistance is
$1.50 per call after the first three calls per month.
Customers who opt-out of receiving a directory also will
not have readily available the information required to be
included in the Customer Guide pages of directories,
although some of this information also is required to be
provided to customers in a bill insert. For each category
of information that the CPUC or Legislature has required,
will a customer who opts-out of directory delivery have
sufficient notice of that information from another source?
5) Opting-out from all Directories . This bill requires a
third-party vendor to "honor any opt-out request made
directly to the telephone corporation from which that
vendor obtains subscriber information." This language
seems to imply that if a customer contacts its LEC to
opt-out of receiving the LEC directory, the third-party
vendor must also cease delivering its directory to that
customer. As stated by AT&T, this requirement may
undermine the very reason the customer is opting-out of the
LEC directory: "A customer may choose not to receive a
telephone company directory precisely because of a
preference for the directory offered by another publisher."
In a competitive market, the better approach may be to
require a customer to opt-out of each individual directory.
Thus, the author and committee may wish to consider
amending the bill to require a directory publisher to cease
delivery of a directory that a customer specifically
identifies that it does not want to receive.
6) Recycled Content Compliance . This bill requires the
CPUC to ensure that directories are "recyclable with
newsprint or mixed paper and do not use a binding or other
contaminant that would render the directories
nonrecyclable" and also that publishers "[d]emonstrate
compliance with newsprint recycled content law" but does
not specify which law. Since directory publishers are
already under a mandate to use 50 percent or more recycled
content in their directories, subject to enforcement by
another government agency, is this provision necessary? If
considered necessary, the author and committee may wish to
consider amending the bill to specify the provisions of the
Public Resources Code with which publishers are expected to
comply.
7) Local Recycling Programs . This bill requires directory
publishers to provide access via telephone or Internet Web
site to information about local recycling programs and to
demonstrate participation in a program or organization to
promote the recycling of telephone directories. Publishers
claim that these requirements are overly prescriptive, that
they already provide recycling information in their
directories, and that they already engage in environmental
programs to promote recycling. Since most residential
customers are served by curbside recycling programs that
accept telephone directories along with newspapers and
other paper products, the author and committee may wish to
consider striking this requirement and instead require that
the cover include a message that this product can be
recycled.
8) First Amendment Issue . This bill aims to achieve source
reduction of paper waste but does so by focusing on only
one source - telephone directories. According to the EPA,
directories account for 0.03% of discarded paper waste,
compared to higher percentages for corrugated boxes,
newspapers, commercial printing, and other sources.
Telephone companies claim that this bill unfairly singles
out telephone directories and does not affect other paper
products such as retail sales flyers, political campaign
literature and other unsolicited advertising delivered to
homes. While fairness is one issue, this bill also raises
a potential First Amendment issue. Does the focus on only
one source and the requirement to include on the front
cover of directories a specific message that facilitates
customer action to stop receiving their product unlawfully
infringe on publishers' right to freedom of speech, in this
case commercial speech?
POSITIONS
Sponsor:
Californians Against Waste
Support:
AFSCME
Californians Against Waste
California Resource Recovery Association
Environment California
Natural Resources Defense Council
Planning and Conservation League
Oppose:
AT&T
California Black Chamber of Commerce Foundation
California Chamber
California Communications Association
Frontier Communications
Los Angeles Area Chamber of Commerce
Product Development Corporation
Valley Yellow Pages
World Color
Yellow Pages Association
Jackie Kinney
SB 920 Analysis
Hearing Date: April 20, 2010
Revised