BILL ANALYSIS �
SB 50
Page 1
Date of Hearing: June 17, 2013
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
SB 50 (Lieu) - As Amended: April 30, 2013
SENATE VOTE : 32-0
SUBJECT : Telecommunications: pay telephones
SUMMARY : 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.
Specifically, this bill :
1)Revises these requirements, effective January 1, 2015, to
apply to public telephones that accept any form of payment to
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.
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.
EXISTING LAW :
1)Requires an owner or operator of a coin-activated telephone
for public use, which is not a telephone corporation and which
provides operator-assisted services by other than a telephone
corporation tariffed to provide those services, to post on or
near the telephone equipment certain information, as
prescribed. (Public Utilities Code � 741)
2)Requires the California Public Utilities Commission (PUC) to
adopt and enforce operating requirements, as prescribed, for
coin-activated and credit card-activated telephones available
for public use owned or operated by corporations or persons
other than telephone corporations. (Public Utilities Code
�742)
SB 50
Page 2
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, "few of us could get
through the day without using our cell phones, but on those rare
occasions when it's dead or forgotten or impossible to use, we
may resort to a payphone. Nowadays, however, it has become
common for consumers to pay with a credit, debit or calling
card, especially at airports, where the only payment method
often offered is a plastic card. But in 1996, when the federal
government deregulated payphones, not addresses was the
then-uncommon practice of using credit, debit or calling cards
to pay of a payphone call. We have documented cases of my
constituents being charged $20 or more for a 20-second phone
call. Under SB 50, payphones would be required to provide rate
information in plain view somewhere on or near the phones.
There would also have to be a toll-free number to get rate
information".
1)Background : Technology has dramatically evolved since the
birth of the public pay
telephone. Consumers now have the choice and convenience of
using wireless mobile services which affords them the
opportunity to place a call virtually from anywhere in the
world. However, pay telephones are an essential means of
communication for consumers without wireless service in public
places such as gas stations, airports and hospitals.
Pay telephones are activated by coins, credit, debit and calling
cards. According to American Public Communications Council,
there are less than 500,000 pay telephones in the United States;
independent pay telephone service providers operate roughly
450,000 of those pay telephones. The PUC estimates there are
approximately 30,000 pay telephones in California, which is a
significant drop from 300,000 in 1998. These pay telephones are
primarily located in the Los Angeles Basin, San Francisco Bay
Area, and Interstate 5 Corridor.
The PUC does not regulate the rates of coin-activated or
card-activated telephones for public use. The Federal
Communications Commission deregulated pay telephones in 1997,
pursuant to Telecommunications Act of 1996. Current law
requires the PUC to enforce operating requirements for pay
telephones. PUC Safety and Enforcement Division (SED)
inspectors routinely conduct targeted inspections of public
SB 50
Page 3
telephones across California to ensure compliance with
regulatory requirements. Inspectors use a Payphone Inspection
Checklist which includes whether public telephones have required
signage relating to the cost of calls and whether calls made are
charged accurately. Public telephone owners are notified
through a corrective action letter of any violations that need
to be corrected and inspectors conduct follow-up inspections to
ensure proper compliance. SED notes that a significant majority
of the public telephone owners currently do comply with the
letters and take corrective actions to remedy the deficiencies.
The PUC received less than twenty complaints from consumers
primarily related to credit card charges at the airport, service
quality issues, and coin-activated calls.
The state law requires that every owner or operator of
coin-activated telephones, other than a telephone corporation,
post the following easily seen information:
Name of the provider of operator-assisted services
and their toll-free number
Applicable charges for each available
operator-assisted service.
The provider of operator-assisted services respond
to inquiries concerning the terms and conditions of any
available service.
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.
1)Inadequate rate disclosure at public pay telephones : It has
become a growing trend for
consumers to use credit, debit and calling cards to pay for
calls. However, when pay telephones were initially regulated,
the concept of credit card enabled payphones was not envisioned.
The rates charged for credit card enabled phone calls are not
adequately displayed on the signage near the pay telephone thus
resulting in higher rates and charges for consumers to originate
a call. An example: local media outlets have reported claims
that consumers paid $20 for a call that lasted 20 seconds.
SB 50
Page 4
2)Keeping the consumer informed : SB 50 aims to remedy inadequate
rate disclosure at public
pay telephones by imposing mandatory signage on pay telephones
that notify consumers that use credit, debit, calling cards, and
other payment devices of the possible costs and provide a
toll-free number to learn the actual costs to place a call. 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 themselves 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.
REGISTERED SUPPORT / OPPOSITION :
Support
California Public Utilities Commission (CPUC)
Congress of California Seniors
Division of Ratepayer Advocates (DRA)
Los Angeles World Airports
Vietnam Veterans of Vietnam, California State Council
Opposition
None on file.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083