Bill Text: CA SB905 | 2011-2012 | Regular Session | Amended
Bill Title: Telecommunications: universal service.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-01-31 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB905 Detail]
Download: California-2011-SB905-Amended.html
BILL NUMBER: SB 905 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 24, 2011
INTRODUCED BY Senator Wolk
FEBRUARY 18, 2011
An act to amend Section 275.6 Sections
2889.9 and 2890 of the Public Utilities Code, relating to
telecommunications.
LEGISLATIVE COUNSEL'S DIGEST
SB 905, as amended, Wolk. Telecommunications: universal service.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including telephone corporations,
as defined. Existing law requires a telephone bill to only contain
charges for products or services, the purchase of which the
subscriber has authorized. Existing law establishes various
requirements for billing telephone corporations. Pursuant to these
requirements, the commission has adopted rules to specify the
responsibilities and procedures that must be followed to address and
report cramming-related issues. Cramming occurs when an unauthorized
charge is placed on a subscriber's telephone bill.
This bill, except for telephone corporations that either provide
service only to business or wholesale customers or offer mobile
telephony services through a prepaid or pay-in-advance method, would
require that the reporting requirements and standards relative to
cramming complaints be uniform for all billing telephone
corporations, as defined. The bill would require that the commission
annually report to the Legislature, on or before June 1 of each year,
on any investigation commenced by the commission's consumer
protection and safety division when the commission receives more than
100 complaints regarding unauthorized telephone charges in any
90-day period as to a person, corporation, or billing agent, as
defined. The bill would require the commission to impose a civil
penalty and order a billing telephone corporation to cease to provide
billing services for a service provider, as defined, or billing
agent whenever the incidence of meritorious subscriber complaints of
unauthorized billings, as defined, exceeds 5% of the customer
accounts that were billed on behalf of a service provider or billing
agent. The bill would require a billing telephone corporation to
notify its subscribers whenever this 5% meritorious complaint penalty
and termination requirement is invoked, identifying the service
provider or billing agent with a clear and informative description of
the nature of the charges that were unauthorized, and would
authorize any subscriber that made or makes a meritorious complaint
with respect to that service provider or billing agent, to terminate
without financial or other penalty, the remaining term of a service
contract with the billing telephone corporation. The bill would
require the commission to make certain information relative to
cramming available to the public over the Internet and in bill
inserts to be included with billings by billing telephone
corporations.
Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the
commission is a crime.
Because certain provisions of this bill incorporate those criminal
provisions of the act with respect to a telephone corporation and
because a violation of an order or decision of the commission
implementing the bill's requirements would be a crime, the bill would
impose a state-mandated local program by expanding the definition of
a crime.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Existing law authorizes the Public Utilities Commission to
supervise and regulate every public utility in the state, including
telephone corporations, and to fix just and reasonable rates and
charges for the public utility. Existing law establishes the
California High-Cost Fund-A Administrative Committee Fund and the
California High-Cost Fund-B Administrative Committee Fund in the
State Treasury, and requires that moneys in the funds are the
proceeds of rates and are held in trust for the benefit of
ratepayers, and to compensate telephone corporations for their costs
of providing universal service and may be expended only to accomplish
specified telecommunications universal service programs, upon
appropriation in the annual Budget Act or upon supplemental
appropriation.
Existing law also requires the commission, until January 1, 2013,
to develop, implement, and maintain a suitable program to establish a
fair and equitable local rate structure aided by universal service
rate support to small independent telephone corporations that serve
rural areas and are subject to a rate of return regulation by the
commission.
This bill would make technical, nonsubstantive changes to that
requirement.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no
yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. It is the intent of the Legislature
that Sections 2889.9 and 2890 of the Public Utilities Code be read
together and serve as a deterent to "cramming," which occurs when an
unauthorized charge is placed on a subscriber's telephone bill.
SEC. 2. Section 2889.9 of the Public
Utilities Code is amended to read:
2889.9. (a) No For purposes of this
section the following terms have the following meanings:
(1) "Billing agent" means any agent that provides billing services
for service providers directly or indirectly through a billing
telephone corporation.
(2) "Billing telephone corporation" means a telephone corporation
or reseller that bills a subscriber for products or services.
(3) "Complaint" means any written or oral communication from a
subscriber alleging that an unauthorized charge was included in the
billing telephone corporation's bill to the subscriber.
(4) "Service provider" means a person, corporation, or other
entity other than a billing telephone corporation, that originates
the charge or charges that are billed to the subscriber of the
billing telephone corporation.
(5) "Unauthorized charge" means any charge placed upon or included
in a subscriber's telephone bill for services or products that the
subscriber did not agree to purchase, including any charges that
resulted from false, misleading, or deceptive representations.
(b) (1) A
person or corporation shall not misrepresent its
association or affiliation with a telephone carrier
corporation when soliciting, inducing, or
otherwise implementing the subscriber's agreement to purchase the
products or services of the person or corporation, and have the
charge for the product or service appear on the subscriber's
telephone bill.
(2) A telephone corporation shall not misrepresent its association
or affiliation with another person or corporation when soliciting,
inducing, or otherwise implementing the subscriber's agreement to
purchase the products or services of the person or corporation, and
have the charge for the product or service appear on the subscriber's
telephone bill.
(3) A billing telephone corporation shall resolve complaints,
billing inquiries, and refund requests from its subscribers, and
shall not refer its subscribers' complaints, inquiries, or requests
to a service provider, billing agent, or billing aggregator.
(b)
(c) The provisions of authority
and jurisdiction of the commission, pursuant to Chapter 11
(commencing with Section 2100) of Part 1 of Division 1 ,
apply to a public utility subject to this section and Section 2890.
If the commission finds that a person or corporation or its billing
agent that is a nonpublic not a public
utility, as defined in Section 216, and is subject to
the provisions of this section and Section 2890,
has violated any requirement of this article, or knowingly provided
false information to the commission on matters subject to this
section and Section 2890, the commission may enforce Sections 2102,
2103, 2104, 2105, 2106, 2107, 2108, 2109, 2110, 2111, and 2114
against those persons, corporations, and billing agents as if the
persons, corporations, or billing agents were a public utility.
Neither this authority nor any other provision of this article grants
the commission jurisdiction to regulate persons or corporations or
their billing agents who are not otherwise subject to commission
regulation, other than as specifically set forth in this section and
Section 2890.
(c)
(d) If the commission finds that a person, corporation,
or billing agent is operating in violation of any provision of this
section and Section 2890, the commission may order the billing
telephone company corporation to
terminate the billing and collection services for that person,
corporation, or billing agent. Nothing in this
This section and Section 2890 precludes
do not preclude a billing telephone company
corporation from taking action on its own to
terminate billing and collection services.
(d)
(e) The commission shall establish rules that require
each billing telephone company corporation
, billing agent, and company that provides products or services
that are charged on subscribers' telephone bills, to provide the
commission with monthly reports of complaints made by
subscribers regarding the billing for products or services that are
charged on their telephone bills as a result of the billing and
collection services that the billing telephone company
corporation provides to third parties, including
affiliates of the billing telephone company
corporation. Except for telephone corporations that either
provide service only to business or wholesale customers or offer
mobile telephony services through a prepaid or pay-in-
advance method, reporting requirements and standards for all billing
telephone corporations shall be uniform .
(e)
(f) If the commission receives more than 100 complaints
regarding unauthorized telephone charges in any 90-day period as to
a person, corporation, including a telephone corporation,
or billing agent's activities that are subject to Section 2890 and
this section, the commission's consumer services
protection and safety division shall commence a formal or
informal investigation. The commission, to further the purposes of
Section 2890 and this section, may change the number of complaints in
any 90-day period that initiates the commencement of an
investigation. On or before June 1 of each year, the
commission shall report to the Legislature on any investigation
commenced by the commission's consumer protection and safety division
pursuant to this subdivision. On a quarterly basis, the commission
shall post in a conspicuous manner on its Internet Web site, the
number of investigations commenced by the consumer protection and
safety division. This subdivision does not prohibit the
commission's consumer services division
commission from opening any investigation it deems necessary to
enforce Section 2890 or this section.
(f)
(g) Failure by a telephone corporation,
person, corporation, or billing agent to respond to commission staff
requests for information is grounds for the commission to order the
billing telephone company or companies that are
corporation that is providing billing and collection
services to cease billing and collection services for the person,
corporation, or billing agent.
(g)
(h) Persons or corporations originating charges for
products or services, their billing agents, and telephone
corporations billing for these products or services shall cooperate
with the commission in the commission's efforts to enforce the
provisions of this article.
(h)
(i) This section and Section 2890 do not obligate a
billing telephone company corporation
to provide billing and collection services to a billing agent.
(i)
(j) The commission may shall
adopt rules , regulations and issue
decisions and orders, as necessary, to safeguard the rights of
consumers and to enforce the provisions of this article. The
commission shall impose a civil penalty and order a
billing telephone corporation to cease to provide billing services
for a service provider or billing agent whenever the incidence of
meritorious subscriber complaints of unauthorized billin
gs exceeds 5 percent of the customer accounts that were billed on
behalf of a service provider or billing agent. The commission may
determine an appropriate threshold number of billings, not to exceed
200, that must be made before this 5 percent meritorious complaint
penalty and termination requirement becomes applicable. The telephone
corporation shall be required to notify its subscribers whenever
this 5 percent meritorious complaint penalty and termination
requirement is invoked, identifying the service provider or billing
agent with a clear and informative description of the nature of the
charges that were unauthorized. The commission's consumer protection
and safety division may require that the division approve of the
notification prior to it being sent to subscribers. Any subscriber
that made or makes a meritorious complaint with respect to
that service provider or billing agent may, within 45 days of the
date the complaint was made, terminate without financial or other
penalty, the remaining term of a service contract with the billing
telephone corporation.
(j) For the purposes of this section, "billing agent" means the
clearinghouse or billing aggregator.
(k) The commission shall require a billing telephone corporation
to report complaints for services they provide to subscribers on a
monthly basis.
(l ) The commission shall make a summary of complaints,
reported to the commission pursuant to subdivision (e), readily
available on its Internet Web site.
(m) (1) The requirement for submitting a report imposed under
subdivision (f) is inoperative on June 1, 2016, pursuant to Section
10231.5 of the Government Code.
(2) A report submitted pursuant to subdivision (f) shall be
submitted in compliance with Section 9795 of the Government Code.
SEC. 3. Section 2890 of the Public
Utilities Code is amended to read:
2890. (a) For purposes of this section, "billing agent,"
"billing telephone corporation," "complaint," "service provider," and
"unauthorized charge" have the same meaning as defined in Section
2889.9.
(b) (1) A telephone
bill may only contain charges for products or services, the purchase
of which the subscriber has authorized.
(2) The requirements of this subdivision are applicable to any
charge placed on a telephone bill, whether placed on behalf of a
service provider, billing agent, or the telephone corporation.
(b)
(c) When a person or corporation obtains a written
order for a product or service, the written order shall be a separate
document from any solicitation material. The sole purpose of the
document is to explain the nature and extent of the transaction.
Written orders and written solicitation materials shall be
unambiguous, legible, and in a minimum 10-point type. Written or oral
solicitation materials used to obtain an order for a product or
service shall be in the same language as the written order. Written
orders may not be used as entry forms for sweepstakes, contests, or
any other program that offers prizes or gifts.
(c)
(d) The commission may only permit a subscriber's local
telephone service to be disconnected for nonpayment of charges
relating to the subscriber's basic local exchange telephone service,
long-distance telephone service within a local access and transport
area (intraLATA), long-distance telephone service between local
access and transport areas (interLATA), and international telephone
service.
(d)
(e) (1) A billing telephone company shall clearly
identify, and use a separate billing section for, each person,
corporation, or billing agent that generates a charge on a subscriber'
s telephone bill. A billing telephone company may not bill for a
person, corporation, or billing agent, unless that person,
corporation or billing agent complies with paragraph (2).
(2) Any A person, corporation, or
billing agent that charges subscribers for products or services on a
telephone bill shall do all of the following:
(A) Include, or cause to be included, in the telephone bill the
amount being charged for each product or service, including any taxes
or surcharges, and a clear and concise description of the service,
product, or other offering for which a charge has been imposed.
(B) Include, or cause to be included, for each person or
entity that charges for a product or service,
information with regard to how to resolve any dispute about that
charge, including the name of the party responsible for generating
the charge and a toll-free telephone number or other no cost means of
contacting the entity responsible for resolving disputes regarding
the charge and a description of the manner in which a dispute
regarding the charge may be addressed specific, clear,
and conspicuous information identifying the person or entity making
each charge and the service provided by the person or entity for
which the charge is being made . Each telephone bill shall
include the appropriate telephone number of the commission that a
subscriber may use to register a complaint.
(C) Establish, maintain, and staff a toll-free telephone number to
respond to questions or disputes about its charges and to provide
the appropriate addresses to which written questions or complaints
may be sent. The person, corporation, or billing agent that generates
a charge may also contract with a third party, including, but not
limited to, the billing telephone corporation, to provide that
service on behalf of the person, corporation or billing agent.
(D) Provide a means for expeditiously resolving subscriber
disputes over charges for a product or service, the purchase of which
was not authorized by the subscriber. In the case of a dispute,
there is a rebuttable presumption that an unverified charge for a
product or service was not authorized by the subscriber and that the
subscriber is not responsible for that charge. With regard to direct
dialed telecommunications services, evidence that a call was dialed
is prima facie evidence of authorization. If recurring charges arise
from the use of those subscriber-initiated services, the recurring
charges are subject to this section.
(f) (1) The commission, in consultation with billing telephone
corporations, shall develop materials, including information placed
on the CalPhoneInfo Internet Web site, to educate consumers on how to
avoid and detect unauthorized charges on their telephone bills.
(2) The commission shall require all billing telephone
corporations to distribute bill inserts, prepared by the commission,
with clear and concise information on the manner in which to dispute
an unauthorized charge, a summary of the responsibilities of a
billing telephone corporation to avoid including unauthorized charges
on telephone bills, and any other information the commission
determines would be appropriate to assist subscribers in avoiding
unauthorized charges.
(3) The commission shall issue a press release whenever the
commission imposes a civil penalty and orders the termination of
billing services, pursuant to subdivision (j) of Section 2889.9, as a
result of the incidence of meritorious subscriber complaints of
unauthorized billings exceeding 5 percent of the customer accounts
that were billed on behalf of a service provider or billing agent by
a billing telephone corporation.
(e)
(g) If an entity responsible for generating a charge on
a telephone bill receives a complaint from a subscriber that the
subscriber did not authorize the purchase of the product or service
associated with that charge, the entity, not later than 30 days from
the date on which the complaint is received, shall verify the
subscriber's authorization of that charge or undertake to resolve the
billing dispute to the subscriber's satisfaction.
(f)
(h) For purposes of this section, "billing agent" is
the clearinghouse or billing aggregator.
(g) This section shall become operative on July 1, 2001.
SEC. 4. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.
SECTION 1. Section 275.6 of the Public
Utilities Code is amended to read:
275.6. (a) The commission shall develop, implement, and maintain
a suitable program to establish a fair and equitable local rate
structure aided by universal service rate support to small
independent telephone corporations that serve rural areas and are
subject to rate-of-return regulation by the commission. The purpose
of the program shall be to promote the goals of universal telephone
service and to reduce disparities in the rates charged by those
companies.
(b) For purposes of this section, "small independent telephone
corporations" means those independent telephone corporations serving
rural areas that are subject to rate-of-return regulation by the
commission, as determined by the commission.
(c) The commission shall structure the programs required by this
section so that a charge imposed to promote the goals of universal
service reasonably equals the value of the benefits of universal
service to contributing entities and their subscribers.
(d) This section shall remain in effect only until January 1,
2013, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2013, deletes or extends
that date.
