File No. 219

House of Representatives, April 7, 2005

The Committee on Energy and Technology reported through REP. FONTANA of the 87th Dist., Chairperson of the Committee on the part of the House, that the substitute bill ought to pass.

AN ACT CONCERNING CELLULAR MOBILE TELEPHONE NUMBER DIRECTORIES AND INFORMATION ON CUSTOMER SERVICE.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 16-247s of the general statutes is repealed and the following is substituted in lieu thereof (Effective October 1, 2005):

(a) Each certified telecommunications provider, as defined in section 16-1, that provides local exchange service to customers in the state shall provide without charge to a telephone company serving more than one hundred thousand customers for directory assistance purposes all listings for its Connecticut customers other than those listings that are nonpublished. Such telephone company, or its agent or affiliate as applicable, shall, in accordance with the terms and conditions set forth in the federal Telecommunications Act of 1996, as from time to time amended, and any applicable order or regulation adopted by the Federal Communications Commission thereunder, including the availability and timing of updates and applicable rates, compile all such listings and all listings for its own Connecticut customers other than those that are nonpublished in a directory assistance database and make all such listings contained in such database available in electronic format to directory assistance providers. If a customer requests a customer listing from a certified telecommunications provider that does not provide directory assistance, such provider shall connect the customer at no charge with an entity that provides directory assistance to the customer. Each such certified telecommunications provider shall indemnify a telephone company for any damages caused by that certified telecommunications provider's negligence in misidentifying a nonpublished customer.

(b) Unless required by other law, no cellular mobile telephone carrier may disclose the cellular telephone number, name or address of a customer to another person unless such customer authorizes such disclosure in accordance with the provisions of subsection (c) of this section.

(c) The customer's authorization permitted under subsection (b) of this section shall be obtained through a separate question, given orally, by written record or by electronic means provided such cellular mobile telephone carrier shall maintain a record or copy of such authorization.

(d) A customer who gives the authorization permitted under subsection (b) of this section may revoke such authorization at any time. A cellular mobile telephone carrier shall comply with a request to revoke authorization no later than sixty days after receiving such a request.

(e) No cellular mobile telephone carrier may charge a fee to a customer or refuse to provide service to a person for declining to give the authorization permitted under subsection (b) of this section.

(f) No person may distribute a directory containing the name or cellular mobile telephone number information of a customer of a cellular mobile telephone carrier who has not given an authorization in accordance with the provisions in subsection (c) of this section.

(g) The Department of Public Utility Control may adopt regulations, in accordance with chapter 54, to implement the provisions of subsections (b) to (f), inclusive, of this section. Failure to comply with any provisions of subsections (b) to (f), inclusive, of this section or any regulation adopted in accordance with said subsections shall constitute an unfair or deceptive trade practice under section 42-110b.

Sec. 2. (NEW) (Effective from passage) (a) The Department of Public Utility Control shall receive and administer customer information inquiries and complaints regarding cellular mobile telephone carriers. Upon the receipt of such complaint, the department shall transmit the complaint details to the carrier for resolution with the customer. No later than thirty days after receipt of such complaint from the department, the carrier shall provide a written or electronic mail communications response to the department. Nothing contained in this section shall be construed to restrict the right of any person to pursue any other remedy available to the person under law.

(b) Not later than October 1, 2005, the department shall establish a toll-free telephone number and Internet web site at which members of the public can submit to the department their information inquiries and complaints regarding activations, disputed bills, collections, deactivations, equipment problems, network trouble and other service problems. The department shall also accept such inquiries and complaints by mail. Not later that October 1, 2005, and at least annually thereafter, each cellular mobile telephone carrier shall, in a conspicuous manner, notify each of its customers concerning such toll-free telephone number, Internet web site address and the address of the department for submitting such inquiries and complaints.

(c) Not later than December 31, 2006, and annually thereafter, the department shall submit a report, in accordance with the provisions of section 11-4a of the general statutes, to the joint standing committee of the General Assembly having cognizance of matters relating to energy and technology on the monthly volume of cellular mobile telephone service carriers customer complaints received by the department regarding activations, disputed bills, collections, deactivations, equipment problems, network trouble and any other service problems.

(d) There is established an account to be known as the "quality of cell phone service account", which shall be a separate, nonlapsing account within the General Fund. The Department of Public Utility Control is authorized to use funds in the account only to administer the provisions of this section.

(e) The department may, by regulations adopted in accordance with the provisions of chapter 54 of the general statutes, establish procedures to implement the provisions of this section. Any cellular mobile telephone carrier that fails to comply with the provisions of this section shall be subject to civil penalties in accordance with the provisions of section 16-41 of the general statutes, as amended by this act.

Sec. 3. Section 16-49 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) As used in this section:

(1) "Company" means (A) any public service company other than a telephone company, that had more than one hundred thousand dollars of gross revenues in the state in the calendar year preceding the assessment year under this section, except any such company not providing service to retail customers in the state, (B) any telephone company that had more than one hundred thousand dollars of gross revenues in the state from telecommunications services in the calendar year preceding the assessment year under this section, except any such company not providing service to retail customers in the state, (C) any certified telecommunications provider that had more than one hundred thousand dollars of gross revenues in the state from telecommunications services in the calendar year preceding the assessment year under this section, except any such certified telecommunications provider not providing service to retail customers in the state, or (D) any electric supplier that had more than one hundred thousand dollars of gross revenues in the state in the calendar year preceding the assessment year under this section, except any such supplier not providing electric generation services to retail customers in the state;

(2) "Telecommunications services" means (A) in the case of telecommunications services provided by a telephone company, any service provided pursuant to a tariff approved by the department other than wholesale services and resold access and interconnections services, and (B) in the case of telecommunications services provided by a certified telecommunications provider other than a telephone company, any service provided pursuant to a tariff approved by the department and pursuant to a certificate of public convenience and necessity; and

(3) "Fiscal year" means the period beginning July first and ending June thirtieth.

(b) On or before July 15, 1999, and on or before May first, annually thereafter, each company shall report its intrastate gross revenues of the preceding calendar year to the department, which amount shall be subject to audit by the department. For each fiscal year, each company shall pay the Department of Public Utility Control the company's share of all expenses of the department and the Office of Consumer Counsel for such fiscal year. On or before September first, annually, the department shall give to each company a statement which shall include: (1) The amount appropriated to the department and the Office of Consumer Counsel for the fiscal year beginning July first of the same year; (2) the total gross revenues of all companies; and (3) the proposed assessment against the company for the fiscal year beginning on July first of the same year, adjusted to reflect the estimated payment required under subdivision (1) of subsection (c) of this section. Such proposed assessment shall be calculated by multiplying the company's percentage share of the total gross revenues as specified in subdivision (2) of this subsection by the total revenue appropriated to the department and the Office of Consumer Counsel as specified in subdivision (1) of this subsection.

(c) Each company shall pay the department: (1) On or before June thirtieth, annually, an estimated payment for the expenses of the following year equal to twenty-five per cent of its assessment for the fiscal year ending on such June thirtieth, (2) on or before September thirtieth, annually, twenty-five per cent of its proposed assessment, adjusted to reflect any credit or amount due under the recalculated assessment for the preceding fiscal year, as determined by the department under subsection (d) of this section, provided if the company files an objection in accordance with subsection (e) of this section, it may withhold the amount stated in its objection, and (3) on or before the following December thirty-first and March thirty-first, annually, the remaining fifty per cent of its proposed assessment in two equal installments.

(d) Immediately following the close of each fiscal year, the department shall recalculate the proposed assessment of each company, based on the expenses, as determined by the Comptroller, of the department and the Office of Consumer Counsel for such fiscal year. On or before September first, annually, the department shall give to each company a statement showing the difference between its recalculated assessment and the amount previously paid by the company.

(e) Any company may object to a proposed or recalculated assessment by filing with the department, not later than September fifteenth of the year of said assessment, a petition stating the amount of the proposed or recalculated assessment to which it objects and the grounds upon which it claims such assessment is excessive, erroneous, unlawful or invalid. After a company has filed a petition, the department shall hold a hearing. After reviewing the company's petition and testimony, if any, the department shall issue an order in accordance with its findings. The company shall pay the department the amount indicated in the order not later than thirty days after the date of the order.

(f) The department shall remit all payments received under this section attributable to such companies to the State Treasurer for deposit in the Consumer Counsel and Public Utility Control Fund established under section 16-48a. [Such funds] Payments attributable to such companies and payments received pursuant to subsection (k) of this section shall be accounted for as expenses recovered from public service companies, [and] certified telecommunications providers and cellular mobile telephone carriers. All payments made under this section shall be in addition to any taxes payable to the state under chapters 211, 212, 212a and 219.

(g) Any assessment unpaid on the due date or any portion of an assessment withheld after the due date under [subsection] subsections (c) and (k) of this section shall be subject to interest at the rate of one and one-fourth per cent per month or fraction thereof, or fifty dollars, whichever is greater.

(h) Any company or cellular mobile telephone carrier that fails to report in accordance with this section shall be subject to civil penalties in accordance with section 16-41, as amended by this act.

(i) On or before July 15, 2005, and on or before May first, annually thereafter, each cellular mobile telephone carrier, described in section 16-250b, shall report its intrastate gross revenues of the preceding calendar year to the department, which amount shall be subject to audit by the department. For each fiscal year, each carrier shall pay the Department of Public Utility Control the carrier's share of all expenses of the department to administer the activities set forth in section 2 of this act and the activities with respect to such carrier set forth in this section.

(j) On or before September first, annually, the department shall give to each such carrier a statement which shall include (1) the total gross revenues of all carriers, and (2) the proposed assessment against the carrier for the fiscal year beginning on July first of the same year, adjusted to reflect the estimated payment required under subdivision (1) of subsection (c) of this section. Such proposed assessment shall be calculated by multiplying the carrier's percentage share of the total gross revenues as specified in subdivision (1) of this subsection by the estimated expenses of the department for the fiscal year to administer the activities set forth in section 2 of this act and the activities with respect to such carrier set forth in this section.

(k) Each carrier shall pay the department estimated expense as provided in subsection (c) of this section and the proposed assessment for each carrier shall be recalculated following the close of the fiscal year as provided in subsection (d) of this section to reflect the expenses of the department for the fiscal year to administer the activities set forth in section 2 of this act and the activities with respect to such carrier set forth in this section. The department shall remit all payments received from such cellular mobile telephone carriers to the State Treasurer for deposit in the quality of cell phone service account established pursuant to subsection (d) of section 2 of this act.

Sec. 4. Subsection (a) of section 16-41 of the general statutes is repealed and the following is substituted in lieu thereof (Effective from passage):

(a) Each (1) public service company and its officers, agents and employees, (2) electric supplier or person providing electric generation services without a license in violation of section 16-245, and its officers, agents and employees, (3) certified telecommunications provider or person providing telecommunications services without authorization pursuant to sections 16-247f to 16-247h, inclusive, and its officers, agents and employees, (4) person, public agency or public utility, as such terms are defined in section 16-345, subject to the requirements of chapter 293, (5) person subject to the registration requirements under section 16-258a, [and] (6) each cellular mobile telephone carrier, as described in section 16-250b, and (7) company, as defined in section 16-49, as amended by this act, shall obey, observe and comply with all applicable provisions of this title, section 2 of this act and each applicable order made or applicable regulations adopted by the Department of Public Utility Control by virtue of this title or section 2 of this act so long as the same remains in force. Any such company, electric supplier, certified telecommunications provider, cellular mobile telephone carrier, person, any officer, agent or employee thereof, public agency or public utility which the department finds has failed to obey or comply with any such provision of this title, section 2 of this act, order or regulation shall be fined by order of the department in accordance with the penalty prescribed for the violated provision of this title or, if no penalty is prescribed, not more than ten thousand dollars for each offense except that the penalty shall be a fine of not more than forty thousand dollars for failure to comply with an order of the department made in accordance with the provisions of section 16-19 or 16-247k or within thirty days of such order or within any specific time period for compliance specified in such order. Each distinct violation of any such provision of this title, section 2 of this act, order or regulation shall be a separate offense and, in case of a continued violation, each day thereof shall be deemed a separate offense. Each such penalty and any interest charged pursuant to subsection (g) or (h) of section 16-49, as amended by this act, shall be excluded from operating expenses for purposes of rate-making.

The following fiscal impact statement and bill analysis are prepared for the benefit of members of the General Assembly, solely for the purpose of information, summarization, and explanation, and do not represent the intent of the General Assembly or either House thereof for any purpose:

OFA Fiscal Note

State Impact:

Note: GF=General Fund; CC&PUCF=Consumer Counsel and Public Utility Control Fund

Municipal Impact: None

Explanation

The bill prohibits cell phone companies from disclosing certain information to another person unless the customer authorizes or another law requires the disclosure. The bill also requires the Department of Public Utility Control (DPUC) to receive and “administer” cell phone customer complaints along with other various responsibilities.

DPUC Reporting Requirements

The bill requires DPUC to report to the Energy and Technology Committee by December 31 annually, starting in 2006, on the number of complaints it has received each month regarding activations, disputed bills, collections, deactivations, equipment problems, network trouble, and other service problems. It is estimated that DPUC would incur a cost of approximately $17,500 for a part-time clerical assistant to compile the data for this report.

Cell Phone Inquiries and Complaints

The bill also requires DPUC to establish a toll-free telephone number and Internet website for cellular telephone service customers to submit complaints. In FY 06 and FY 07, it is estimated that DPUC will incur costs of approximately $40,000, (plus $21,564 in fringe benefits) for a total of $61,564, in personal services in order to provide a toll-free telephone service and Internet website for customers.

Under the bill, DPUC must receive and administer customer information complaints and inquiries regarding cellular mobile telephone carriers. When DPUC receives a cell phone complaint, it must transmit it to the company for resolution. The bill also requires, within 30 days of receiving the complaint, the company to provide DPUC with a written or e-mail response. It is estimated that DPUC will receive a significant volume of calls from customers making inquiries or complaints. As a result of the anticipated call volume and potential complexity of certain inquiries, DPUC will incur costs of $288,581 in FY 06 and FY 07 for an additional staff person in the Telecommunications Division ($80,803 including fringe benefits) and three additional staff in the Customer Assistance Division ($69,260 each, including fringe benefits). The three additional staff in the Customer Assistance Division would be responsible for handling the high volume of calls and the one additional staff person in the Telecommunications Division would assist in the complexity of customer inquiries.

Assessment on Cell Phone Companies

The bill also requires cellular mobile telephone carriers to annually report intrastate gross revenues of the preceding year to DPUC for auditing purposes. Under the bill companies must pay DPUC an assessment proportional to its share of the industry’s total gross revenue times DPUC’s cost in implementing the bill’s provisions. Each company must make quarterly estimated payments, each equal to one quarter of its total assessment. Such assessments will go into the “Quality of Cell Phone Service Account”, an account established by the bill, within the General Fund. This will result in a revenue gain to the General Fund. However, under the bill funds within the “Quality of Cell Phone Service Account” may be used by DPUC only to administer Section 1 of the bill.

Connecticut Unfair Trade Practice

The bill makes violations of certain provisions an unfair trade practice. Under the Connecticut Unfair Trade Practices Act (CUTPA), the Department of Consumer Protection (DCP) and the Attorney General can impose CUTPA fines. In FY 04, $18,789 was deposited in the General Fund as a result of such fines.

In the case of settlements, depending on the negotiation terms, funds are either deposited into the DCP’s Consumer Protection Settlement Account or the General Fund. Funds deposited into the Consumer Protection Settlement Account are used only to enhance activities that further consumer protection. In FY 04, $86,5000 in CUTPA fines were deposited into the DCP Consumer Protection Settlement Account. Additionally, in FY 04, $135,212 in CUTPA fines were deposited into the General Fund as a result of settlements negotiated by the Office of the Attorney General (OAG). The state agencies could accommodate the workload associated with enforcement of the bill without requiring additional resources. To the extent that the bill increases the potential for future violations, the bill could result in a minimal revenue gain to the state.

Civil Penalties

The bill subjects cell phone companies to DPUC’s existing civil penalties if they fail to comply with the provisions of the bill. The penalty is a fine of up to $10,000 per offense, with each violation, and each day of a violation considered a separate offense. This could result in a minimal revenue gain to the state. While there is the potential for the Attorney General to get involved in some cases of violations, it is anticipated that the Office of the Attorney General (OAG) would be able to accommodate the additional workload within available resources.



OLR Bill Analysis

sHB 5126

AN ACT CONCERNING CELLULAR MOBILE TELEPHONE NUMBER DIRECTORIES AND INFORMATION ON CUSTOMER SERVICE

SUMMARY:

This bill bars cell phone companies from disclosing a customer’s cell phone number, name, or address to another person unless the customer authorizes or another law requires the disclosure. It specifies how the authorization can be given and allows a customer to revoke it at any time. A cell phone company may not charge a fee or refuse to serve a customer who declines to give this authorization. The bill bars anyone from distributing a directory containing information about who has not provided the authorization. It makes violations of these provisions an unfair trade practice (CUTPA) and allows the Department of Public Utility Control (DPUC) to adopt implementing regulations.

The bill imposes several responsibilities on DPUC and cell phone companies regarding cell phone complaints and inquiries. It requires cell phone companies to comply with DPUC orders and regulations. A company that fails to comply is subject to DPUC civil penalties of up to $10,000 per offense, with each violation and each day of a continuing violation considered a separate offense. The bill allows DPUC to adopt regulations to implement these provisions and subjects cell phone companies to an assessment to cover DPUC’s costs of implementing these provisions. The assessment procedure is similar to the one that applies to DPUC’s existing assessment of companies under its jurisdiction.

EFFECTIVE DATE: Upon passage for the provision regarding cell phone complaints and inquiries; October 1, 2005 for the cell phone disclosure provisions.

DISCLOSURE AUTHORIZATION

Under the bill, a customer can authorize disclosure of his cell phone number, name, and address:

1. in writing on a separate record unattached to another written record or

2. orally or electronically, so long as the cell phone company confirms with the customer that the authorization was given and receives the customer’s acknowledgement of the confirmation.

CELL PHONE INQUIRIES AND COMPLAINTS

The bill also requires DPUC to (1) receive and “administer” cell phone customer inquiries and complaints; (2) establish, by October 1, 2005, a toll-free telephone number and Website where people can submit cell phone complaints and inquiries; and (3) accept such complaints and inquiries by mail. By October 1 annually, each company must notify its customers, in a conspicuous manner, of the telephone number, Website, and DPUC address for receiving inquiries and complaints. The bill requires DPUC to report to the Energy and Technology Committee by December 31 annually, starting in 2006, on the number of complaints it has received each month about activations, disputed bills, collections, deactivations, equipment problems, network trouble, and other service problems.

When DPUC receives a cell phone complaint, it must transmit it to the company for resolution. Within 30 days of receiving the complaint, the company must provide DPUC with a written or email response.

ASSESSMENT ON CELL PHONE COMPANIES

Under the bill, by July 15, 2005, and by each subsequent May 1, each cell phone company must report its intrastate gross revenue for the preceding calendar year to DPUC. This amount is subject to audit.

By September 1 annually, DPUC must give each company a statement that includes (1) the total gross revenue of all cell phone companies and (2) the proposed assessment against the company for the current fiscal year. The company’s assessment is proportional to its share of the industry’s total gross revenue times DPUC’s cost in implementing the bill’s provisions regarding complains and inquiries.

By law, companies subject to the existing assessment can object to it, arguing that it is excessive, erroneous, unlawful, or invalid. DPUC must hold a hearing on the petition and issue an order. It appears that these provisions also apply to the cell phone company assessment.

The company must make quarterly estimated payments, each equal to one quarter of its total assessment. DPUC must recalculate the assessment following the close of the fiscal year to reflect its expenses in implementing the bill.

The assessments go into a separate account the bill creates within the General Fund. As is true with the existing assessment, (1) the assessments are in addition to otherwise applicable taxes, (2) unpaid assessments are subject to the greater of 0.25% per month interest or $50, and (3) failure to pay the assessment is subject to the DPUC’s civil penalty.

CIVIL PENALTIES

The bill subjects cell phone companies to DPUC’s existing civil penalties if they fail to (1) comply with the service quality notification and reporting requirements, (2) report their intrastate gross revenue or pay their assessments, or (3) comply with DPUC orders or applicable utility laws. The penalty is a fine of up to $10,000 per offense, with each violation and each day of a violation considered a separate offense. The existing penalties apply to companies under DPUC’s jurisdiction; a penalty of up to $40,000 per offense applies to violations of DPUC rate regulation laws. (Under federal law, cell phone companies are not subject to state rate regulation.)

BACKGROUND

Unfair Trade Practices

The law prohibits businesses from engaging in unfair and deceptive acts or practices. CUTPA allows the DCP commissioner to issue regulations defining what constitutes an unfair trade practice, investigate complaints, issue cease and desist orders, order restitution in cases involving less than $5,000, enter into consent agreements, ask the attorney general to seek injunctive relief, and accept voluntary statements of compliance. The act also allows individuals to sue. Courts may issue restraining orders; award actual and punitive damages, costs, and reasonable attorneys fees; and impose civil penalties of up to $5,000 for willful violations and $25,000 for violation of a restraining order.

COMMITTEE ACTION

Energy and Technology Committee

Joint Favorable Substitute