03/30/2012 01:30 PM Senate JUDICIARY

         SB 138-THIRD-PARTY CHARGES ON TELEPHONE BILLS                                                                      
                                                                                                                                
1:36:38 PM                                                                                                                    
CHAIR FRENCH announced the consideration  of SB 138 and asked for                                                               
a  motion  to  adopt  the  proposed  committee  substitute  (CS),                                                               
version U.                                                                                                                      
                                                                                                                                
1:36:47 PM                                                                                                                    
SENATOR WIELECHOWSKI moved to adopt  the committee substitute for                                                               
SB 138, labeled 27-LS1002\U, as the working document.                                                                           
                                                                                                                                
CHAIR  FRENCH announced  that without  objection,  version U  was                                                               
before the committee.                                                                                                           
                                                                                                                                
SENATOR WIELECHOWSKI,  speaking as  the sponsor  of SB  138, said                                                               
Mr. Presley would present the CS.                                                                                               
                                                                                                                                
1:37:40 PM                                                                                                                    
THOMAS PRESLEY,  Intern to Senator Bill  Wielechowski, sponsor of                                                               
SB 138,  said version  U incorporates  the three  amendments that                                                               
the Alaska  Communication Service  (ACS) offered during  the last                                                               
hearing.                                                                                                                        
                                                                                                                                
Subsection  (c) on  page 2,  lines 11-15,  contains new  language                                                               
that says  that a customer  who contests  a charge on  their bill                                                               
must  inform the  telecommunications  carrier,  either orally  or                                                               
electronically, of the reason for nonpayment.                                                                                   
                                                                                                                                
New   subsection  (d)   on  page   2,  lines   17-19,  allows   a                                                               
telecommunications carrier  to recover from  third-party vendors,                                                               
reasonable  costs incurred  in  implementing  billing changes  or                                                               
otherwise complying with Sec. 42.05.715.                                                                                        
                                                                                                                                
New   subsection  (d)   on  page   [3],  lines   28-30,  absolves                                                               
telecommunications carriers  of the duty to  verify independently                                                               
the accuracy  of information  received from  a person  or billing                                                               
under this section.                                                                                                             
                                                                                                                                
MR. PRESLEY  said he  forwarded a  copy of the  new CS  to Alaska                                                               
Communication Services  (ACS) and he anticipated  their approval.                                                               
He informed the committee that  both Verizon and AT&T voluntarily                                                               
pledged to  discontinue, by August,  billing for  all third-party                                                               
enhanced services that are not telephone related.                                                                               
                                                                                                                                
1:40:17 PM                                                                                                                    
BOB LOHR,  Executive Director, Alaska  Center for  Public Policy,                                                               
stated support for  SB 138 and relayed that he  was speaking as a                                                               
former executive director of the  Public Utilities Commission and                                                               
a former  chief insurance regulator  for the State of  Alaska. He                                                               
described  the  legislation  as  timely  and  important  consumer                                                               
protection. He  disputed the notion that  third-party billing was                                                               
important  to consumers  to reduce  costs and  expand competitive                                                               
choice because  this was not  an effectively  competitive market.                                                               
Two assumptions  that economists  make about  competitive markets                                                               
are  that there  is perfect  information available  and there  is                                                               
zero transaction cost.  Both are demonstrably untrue  in the case                                                               
of   third-party  non-telephone   charges  on   telecommunication                                                               
billings.                                                                                                                       
                                                                                                                                
MR. LOHR said  SB 138 was good legislation, but  he was concerned                                                               
with  the latest  amendments  because they  added  an element  of                                                               
"blame the  victim." If a  customer has a  bill of $50  for local                                                               
exchange  service and  $25 for  charges  that he  or she  doesn't                                                               
recognize, the  intent is  quite clear if  the customer  pays $50                                                               
even if there  isn't a written instruction on the  bill as to how                                                               
to allocate the charge.                                                                                                         
                                                                                                                                
MR. LOHR  said he  was heartened  to hear  that both  Verizon and                                                               
AT&T recognize that this was  a genuine issue. He reiterated that                                                               
the legislation was still vitally necessary.                                                                                    
                                                                                                                                
SENATOR  WIELECHOWSKI  said his  office  worked  hard to  satisfy                                                               
everyone concerned and a better bill resulted.                                                                                  
                                                                                                                                
SENATOR WIELECHOWSKI  moved to report  CS for SB 138,  version U,                                                               
from  committee  with  individual  recommendations  and  attached                                                               
fiscal note(s).                                                                                                                 
                                                                                                                                
CHAIR  FRENCH  announced  that without  objection  CSSB  138(JUD)                                                               
moved from the Senate Judiciary Standing Committee.