BILL ANALYSIS � 1
SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
SB 50 - Lieu Hearing Date:
April 16, 2013 S
As Amended: March 21, 2013 FISCAL B
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DESCRIPTION
Current law 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
provider will respond to inquiries about the terms of service.
Current law requires the California Public Utilities Commission
(CPUC) 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 would revise these requirements effective January 1,
2015, to apply to public telephones that accept any form of
payment and would require 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.
This bill would also require, 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 CPUC. 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
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 CPUC 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 CPUC
has no specified penalties for payphone operators, state law
authorizes the CPUC to order disconnection of service to a
public telephone operator in violation of CPUC rules.
COMMENTS
1. Author's Purpose . According to the author, this bill
would enable 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. The
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.
2. Anticipating the Future . This bill updates current law
relating to customer protections for use of public
telephones by making them applicable to telephones
activated by coins, calling cards, credit cards, debit
cards, and "any other payment device." This language would
cover anticipated future forms of payment, such as swiping
a wireless phone device or an optical reader on a public
telephone to pay for a call, thereby protecting customers
regardless of technological advances.
3. Ensuring Customer Knowledge Before Charges . Although
current law includes some customer notification of public
telephone charges, this bill enhances customer knowledge by
requiring an express warning that calls activated with a
card or other payment device may cost more than
coin-activated calls. In addition, the bill incorporates
into state law the portion of the federal rules that
require the operator on a public telephone call to 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. As a result, an individual placing a
call within California, to another state, or to another
country, will have knowledge of the charges for a call
before those charges are incurred.
4. Ratepayer Impact . This bill has no impact on the rates
that a public telephone operator can charge, only on
disclosure of those rates. The CPUC payphone inspectors
are funded by the Utility Reimbursement Account from a
surcharge on all intrastate calls. Thus, it is possible
the bill would increase inspector duties and thereby
require more funding.
POSITIONS
Sponsor:
Author
Support:
California Public Utilities Commission
Congress of California Seniors
Division of Ratepayer Advocates
Los Angeles World Airports
Oppose:
None on file.
Jacqueline Kinney
SB 50 Analysis
Hearing Date: April 16, 2013