Legislature(1995 - 1996)
02/12/1996 01:08 PM JUD
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE JUDICIARY STANDING COMMITTEE February 12, 1996 1:08 p.m MEMBERS PRESENT Representative Brian Porter, Chairman Representative Con Bunde Representative Bettye Davis Representative Al Vezey Representative Cynthia Toohey Representative David Finkelstein MEMBERS ABSENT Representative Joe Green, Vice Chairman COMMITTEE CALENDAR HOUSE BILL NO. 109 "An Act relating to telephone directory listings and solicitations." - HEARD AND HELD PREVIOUS ACTION BILL: HB 109 SHORT TITLE: TELEPHONE DIRECTORY LISTING/SOLICITATIONS SPONSOR(S): REPRESENTATIVE(S) BROWN, Navarre, B.Davis JRN-DATE JRN-PG ACTION 01/23/95 115 (H) READ THE FIRST TIME - REFERRAL(S) 01/23/95 116 (H) LABOR & COMMERCE, JUDICIARY 01/26/95 148 (H) COSPONSOR(S): B.DAVIS 04/28/95 (H) L&C AT 03:00 PM CAPITOL 17 04/28/95 (H) MINUTE(L&C) 05/01/95 (H) L&C AT 03:00 PM CAPITOL 17 05/01/95 (H) MINUTE(L&C) 05/04/95 1849 (H) L&C RPT CS(L&C) 5DP 2NR 05/04/95 1849 (H) DP: KOTT, ROKEBERG, KUBINA, PORTER 05/04/95 1849 (H) DP: ELTON 05/04/95 1849 (H) NR: MASEK, SANDERS 05/04/95 1849 (H) ZERO FISCAL NOTE (DCED) 02/12/96 (H) JUD AT 01:00 PM CAPITOL 120 WITNESS REGISTER REPRESENTATIVE KAY BROWN Alaska State Legislature Capitol Building, Room 517 Juneau, Alaska 99801 Telephone: (907) 465-4419 POSITION STATEMENT: Sponsor of HB 109. ACTION NARRATIVE TAPE 96-19, SIDE A CHAIRMAN BRIAN PORTER called the House Judiciary meeting to order at 1:08 p.m. Members present at the call to order were Representatives Bettye Davis, Finkelstein, Vezey, Porter, Bunde and Toohey. Representative Green was absent. HB 109 - TELEPHONE DIRECTORY LISTING/SOLICITATIONS Number 090 CHAIRMAN PORTER announced the committee would hear HB 109, "An Act relating to telephone directory listings and solicitations." REPRESENTATIVE KAY BROWN, sponsor of HB 109, stated she first introduced this bill in 1993. She noted in the committee member's packets, there was a proposed committee substitute (CS) which incorporates some minor changes suggested by Senator Rieger. She noted that Senator Rieger had introduced a companion bill in the Senate. REPRESENTATIVE BROWN explained HB 109 would give consumers the opportunity to avoid intrusive, irritating, unwanted telephone solicitations. This is a totally voluntary program and would give consumers the opportunity to purchase a marking in the phone book which would identify them as someone who didn't wish to receive commercial solicitations. The intent is to discourage calls to those people who don't wish to be called. Representative Brown said she believes this is truly a win, win situation, because telemarketers, under this program, will be able to eliminate from their calling data base those people who don't intend to buy products via telephone and who don't wish to be disturbed, thereby, giving them a better list to call from. REPRESENTATIVE BROWN explained there are exceptions in the bill noted as to which types of calls do not fall within this legislation beginning on page 2, line 21 of the work draft. Representative Brown said that if a business calls someone who purchased this marking in the phone book, they could be penalized under the Unfair Trade Practices Act. If there were a sufficient number of these calls, the attorney general would bring suit against that company. This legislation allows for a $5,000 fine per violation. The underlying bases for this is to try to protect people's privacy. The Alaska constitution does direct the legislature to be proactive in protecting people's privacy. REPRESENTATIVE BROWN stated that in 1991, there was legislation enacted at the federal level, the Telephone Consumer Protection Act. She said she felt HB 109 is still needed even though there is this federal law. She said in many respects, the federal law doesn't really get to the point. What it does is requires each and every company to keep a separate "Do not call" list. The consumer would have to put up with presumably every telemarketing outfit and every separate commercial enterprise that wishes to market by telephone contacting them. There is no blanket way, currently, for a consumer to remove themselves in the way that is provided in HB 109. REPRESENTATIVE BROWN referred to discussions with the Consumer Protection Division in the Department of Law and said they are currently pursuing a case under the registration portion of Alaska law, in which a couple of years ago there was a bill passed that required telemarketers to register with the state. She explained HB 109 is in no way intended to affect that registration requirement. REPRESENTATIVE BROWN referred to a letter from ATU Telecommunications which the committee members had before them and said she would like to disclose that her husband is a lobbyist for ATU Telecommunications. She informed the committee that she had not consulted with him or with ATU Telecommunications previously about this matter. Representative Brown explained that the letter states ATU doesn't agree with the premise of this bill. They felt it would be an extremely costly process to accomplish. Representative Brown said in Oregon, which passed similar legislation in 1989, the costs that they charge consumers is about 25 cents per month to purchase this service. The way it's envisioned is the telephone company would be able to charge whatever is necessary to recover their cost in providing this service and that would be approved by the Alaska Public Utilities Commission (APUC). The consumer could choose to purchase it or not purchase it. REPRESENTATIVE BROWN then read from the letter, "The committee should also be aware that few telephone solicitation firms get their numbers from the telephone directory." She said she is sure that most firms get the numbers from other sources, but the bill does provide that this information would be provided in a computer format. She pointed out that what they're asking is, that those telemarketing firms use the power of the computer to run names in the local area against their list and eliminate those people who don't wish to be called. She said it's really not an issue that people are not getting their solicitations directly from the telephone directory. REPRESENTATIVE BROWN continued to read from the letter, "Additionally, the customer database changes rapidly throughout the year and it would also be inaccurate after a relatively short period of time." She said the way HB 109 is written, is that it allows for a person would be in violation if they call someone who is identified in the directory. Representative Brown said she believes it would be feasible and appropriate to have an opening for this service, like a window when people can sign up or not sign up. Then the directory would go to press and this would be in effect until the next one was published. She said she doesn't envision a contemporaneous situation where someone could sign up at any time and become immediately effective. REPRESENTATIVE BROWN explained one of the amendments that had been made in the Senate is of concern to her. The Senate adopted an amendment in committee that dealt with the phone number 411, where someone could call directory assistance and find out if somebody is on the exemption list or not. This would imply a contemporaneous note that she didn't think was a good idea. She believed it would be least costly and easiest to administer if they incorporated a yearly sign up. They would open the opportunity for membership before the directory is published, close it and then it would be in effect until the next opening. REPRESENTATIVE BROWN said she believes the telephone companies are totally protected. In the early stages on hearings regarding HB 109, there were some objections. She stated that she worked with GCI and incorporated some amendments into the bills prior versions. Representative Brown said the bill gives the phone companies the ability to recover whatever costs they incur by providing the service. REPRESENTATIVE BROWN said one other question that has come up that she wanted to address was, "What are charities?" Charities are one of the exempted groups. In consulting with legal counsel, they decided that one approach would be to outline that charities are groups who have tax exempt status or are those charities under the 501C3 provision. Representative Brown said she believed the committee should have a highlighted version of the bill before them with words to be added accordingly, in the proposed committee substitute. Number 734 REPRESENTATIVE CON BUNDE said, agreeing with the premise that it would be advantageous to a business to not call people who would be upset with the call, but why not include charities? People who get unsolicited calls, whether they be for a commercial product or a charity, could have the same level of irritation. Some people would appreciate not being called period. Number 770 REPRESENTATIVE BROWN said that was a good point. She said she thinks anyone soliciting on behalf of a charity would certainly be well advised to pay attention to the markings. The federal law does exempt charities in this manner. Representative Brown said she doesn't want to regulate these telephone calls so tightly that the telephone becomes extinct as a means of communication. By recognizing charities as a different category from commercial enterprises, she felt it was appropriate to give them that exclusion. Number 815 REPRESENTATIVE CYNTHIA TOOHEY asked if fishing license lists are given to anybody that wants them. CHAIRMAN PORTER said within the qualification of residency they are. Representative Toohey suggested adding to fishing licenses, "No unsolicited calls." Chairman Porter said he understands what Representative Toohey was saying, but the bill should have a single subject rule. Number 859 REPRESENTATIVE AL VEZEY referred to his experience with telemarketing and said if they took out charitable organizations, they're getting down to an insignificant number of phone calls. He said he doesn't really think the public would support cutting off this method of fund raising for charitable organizations. Representative Vezey asked what the problem was with hanging up if someone receives an unwanted phone call. REPRESENTATIVE BROWN said this was always an option and that is how people currently handle this problem. She referred to articles in the national press which indicate that there is an increasing reliance on this method of solicitation. Representative Brown said she became interested in this issue because she personally doesn't like to receive these kinds of calls. She also got involved as a result of interactions with constituents who wish not receive these calls as well. Many people would like to have this option. This legislation would be a balance between a private unlisted number and a public number. Currently if someone truly doesn't want to be bothered with calls, they can get an unlisted number and pay extra for that service. This is a way to maintain a public number, but screen out some level of intrusion into your home. Number 986 REPRESENTATIVE BUNDE said from personal experience, a majority of unsolicited business calls he receives are national in origin. He asked if this bill would have an effect on that. REPRESENTATIVE BROWN indicated it would. These companies would be obligated to obtain this list and use it to screen the calls that they're making. REPRESENTATIVE Bunde referred to companies getting random lists and said if they get a computer list from wherever they get it, he asked if it would be flagged. Representative Brown said her belief is they will be able to get a computer readable list of people who do not wish to be called. They can then match it against the list they're calling from and eliminate those people who do not wish to be called. Number 1065 CHAIRMAN PORTER said there is nothing in the bill that requires a telephone company to generate this computer list, that would be the expectation for meeting these requirements. REPRESENTATIVE BROWN referred to page 2, line 6, "If possible and if requested by the person who engages in telephone solicitation, this list shall be provided in computer readable format." She said it is her belief that telephone directories today are almost universally created in electronic format. This information should be accessible in electronic format to the telephone companies without a huge amount of expense. The technology definitely exists for those lists to be matched and eliminate those people from the call list that the solicitors would be using, between those people who do not wish to be called. Number 1145 CHAIRMAN PORTER indicated he had concern about the charities. He said if they're going to do this they ought to do it and not just go halfway. He referred to the language related to charities and said that charities weren't given a total exception to the requirement of finding out who doesn't wish to be solicited, but they may solicit regardless of this designation only for those people are members of their charity or have previously given. Number 1196 REPRESENTATIVE DAVID FINKELSTEIN said that these folks just can't be regulated because they actually have a relationship with the charity. They're a member or a donor. CHAIRMAN PORTER said that they certainly can regulate it because they'll regulate this particular method of solicitation. REPRESENTATIVE FINKELSTEIN said that in the area of narrowing it down to what is the most legitimate or most appropriate, it seems that this example is one that is closest to someone who has a tie to the organization. They got the name through their own method. CHAIRMAN PORTER asked if this would mean if he gave to the United Way and designated it to go to the Salvation Army, that it gives the Salvation Army the ability to harangue his telephone when he has said he doesn't want to be called. He said he thinks it does and that wouldn't make him happy. Number 1257 REPRESENTATIVE BROWN said she agreed with the way Chairman Porter stated his interpretation of it. She referred to the language on page 2, line 25, and said telephone solicitation does not include, calls made by a charitable organization, a public agency, or volunteers on behalf of them to members of the organization or agency or people who have previously made a donation or expressed an interest in making a donation. She said she didn't believe she had stated this correctly earlier when she said charitable organizations were exempted. These charities would not be in violation if they solicited their own members or people who have expressed some interest, but they wouldn't be able to do the "cold calling." Number 1297 CHAIRMAN PORTER referred to the situation he previously mentioned and said that then they would be able to call him. He stressed again the example he had used when expressing an interest in their charity because he designated them in his United Way contribution. REPRESENTATIVE BROWN said she would agree with this interpretation. REPRESENTATIVE FINKELSTEIN said he had some concerns about how far they were going here. He said that there are situations where it is appropriate for charities to be calling their own members. CHAIRMAN PORTER asked Representative Brown if she had considered cell phones or fax machines. REPRESENTATIVE BROWN said she had read about these regulations. She referred to cell phones and said she isn't clear exactly how those would be any different than a regular phone because the person receiving the call isn't going to know whether its a cellular phone or some other kind of phone. CHAIRMAN PORTER asked if telephone numbers for cell phones are in the phone book. He said he hadn't seen cell phone numbers in the phone book. REPRESENTATIVE BUNDE said as he understands the bill, it would be a listing in the phone book and if it says, "Do not solicit," whether it's a cell phone, fax, etc., then there should be no solicitation. He noted he wasn't aware that cell phone numbers were listed, but noted that someone could probably ask for such a list. Number 1530 REPRESENTATIVE BROWN said we're talking residential, private individuals and not that they were business calls. She said some of the cell phone users she is familiar with have them for the purpose of business. Representative Brown noted HB 109 does not propose to regulate faxes. She referred to the provisions in the federal law and said they did place limits on the use of automated facsimile machines. There is an FCC rule banning unsolicited advertisements sent via facsimile machine. No person may transmit an advertisement describing the commercial availability or quality of any property, goods or services to a telephone facsimile machine without prior expressed permission or invitation of the party receiving the fax. Number 1605 REPRESENTATIVE TOOHEY asked if there was anyway to include in the bill that the telephone books also carry a little stamp, such as a little telephone with a zero and a line through it. This would indicate no soliciting. An unidentified speaker informed Representative Toohey that is what the bill would do. REPRESENTATIVE BROWN referred to the language on page 1, lines 10 and 11, and said these individuals must be identified in the directory. She noted she didn't know what symbol they would use, but they must come up with a method to identify people. Number 1668 REPRESENTATIVE BUNDE referred to the companion bill in the Senate that addressed some other issues and asked if the House CS incorporates some of these Senate changes. REPRESENTATIVE BROWN explained that the work draft before the committee incorporates the bill as it was introduced by Senator Rieger. A subsequent committee then made some changes that she isn't in support of. She said in particular that it was unnecessary to let people sign up every day of the week for this exemption. Once a year would be sufficient to make it a program that can be administered without a lot of cost. Number 1705 CHAIRMAN PORTER asked if it would be beneficial to define "charity" within the bill. REPRESENTATIVE BROWN said she wouldn't object if the committee wished to define this term. CHAIRMAN PORTER said charities should be charities, the people that provide this charitable service as opposed to people who raise money for these people. He noted something about a "501C3." Number 1761 REPRESENTATIVE VEZEY informed the committee that a 501C3 is a nonprofit entity that has tax deductible status with the IRS, not just tax exempt - they have tax deductible status. There are many charities that do not have tax deductible status and there are many nonprofits that are not tax deductible. REPRESENTATIVE BROWN said an organization would know if it considers itself a charitable organization. CHAIRMAN PORTER said the organization would have to file and get that status by the IRS before they would be a charitable organization. He said either you are one or you aren't. CHAIRMAN PORTER referred to the letter from ATU and said the last sentence in the third paragraph says, "That being the case, HB 109 would, again, have no impact." He said as he understands the bill, that this wasn't really an accurate statement. REPRESENTATIVE BROWN agreed with Chairman Porter. She said she assumes they don't understand correctly how the bill would work. The bill would have an impact in this situation because it would discourage people from mailing solicitations to people who don't wish to receive them. That would now be against the law - this is an unfair trade practice. She believed that this would have an impact. Number 1860 CHAIRMAN PORTER asked if there was a mechanism for going after the national solicitors who violate this statute. REPRESENTATIVE BROWN explained this mechanism would provide for the Department of Law to gather enough complaints to bring a case, just as they did in the case of Distributal when receiving complaints from consumers. She said she wasn't positive as to whether or not they were national, but that was the method. She explained that people usually complain to the Attorney General and when there is enough of a case and specific examples, they are able to bring a suit. CHAIRMAN PORTER referred to the interstate nature of this example and asked whether or not there was a bar to limit such cases. REPRESENTATIVE BROWN said that this bill would create jurisdiction because the national telephone solicitors are operating in the state of Alaska and they must operate under the laws of the state. Number 1912 REPRESENTATIVE VEZEY said the bill needs a lot of work. He explained that he doesn't think many, if any, telephone solicitors have gotten his name or phone number from the phone book. Representative Vezey said he believes companies are using targeted lists such as fishing and hunting licenses, business licenses, and other things that someone puts their phone number on. These lists aren't included in the bill. He said he doesn't think anybody could be held liable for using another list that isn't the phone directory. REPRESENTATIVE FINKELSTEIN explained that people rarely have the ability to go and get the information directly from the state. They go to a vendor. He noted the biggest vender in the state is Bob Mosek's company. They actually cross these lists with the phone book ahead of time. So when someone calls and request lists, such as in the form from people's fishing licenses, he said the list has already been crossed and connected to the phone book. Number 2056 CHAIRMAN PORTER said that this was a question that the committee needed to have answered. He said if he is correct, the emphasis of the legislation is on the out-of-state solicitation network which is most onerous in this area of irritation. REPRESENTATIVE BROWN pointed out that if the Department of Law brings suit against a company and says, "You are in violation," and if they're found to be in violation, the remedy is a $5,000 fine per violation. CHAIRMAN PORTER said that this would be the remedy if they are able to get jurisdiction over the defendant, but if they can't get jurisdiction then this is a problem. He questioned how they could get jurisdiction over the defendant. Number 1224 REPRESENTATIVE VEZEY said he would also like to know what the U.S. Department of Justice's opinion is on this because it reaches into an area which is regulated by the FCC. He said he was uncertain as to how much regulatory authority they would give a state over an interstate phone call. Number 2130 REPRESENTATIVE BETTYE DAVIS said that this should be an easy answer to get since other states have adopted a similar law. REPRESENTATIVE BROWN referred to a registration requirement that the legislature passed, which said people who do telephone solicitation must register under Alaska law. This provision reaches beyond the state. She said by having this law on the books would serve the purpose of jurisdiction. It puts the burden on the telemarketer to operate in Alaska. CHAIRMAN PORTER said he wasn't comfortable with passing this bill out of committee until he had a firm answer to this question. REPRESENTATIVE BROWN said to her knowledge, there was no prohibition that kept them from regulating commerce in Alaska in this manner. The federal government sets a minimum level of requirement and Alaska can set a greater level if they wish to. CHAIRMAN PORTER said they probably can, but is it enforceable? There is an expectation that if Alaska establishes this law, then the state can do something about these unsolicited phone calls. He questioned this process. REPRESENTATIVE BROWN said that many of the consumer protection laws would be a lot more enforceable if they had more resources to enforce them. CHAIRMAN PORTER said the committee would hear the bill again the following Wednesday at 1:00 p.m. ADJOURNMENT CHAIRMAN PORTER adjourned the House Judiciary Committee Meeting at 1:50 p.m.