02/28/2012 01:30 PM Senate LABOR & COMMERCE

         SB 138-THIRD-PARTY CHARGES ON TELEPHONE BILLS                                                                      
                                                                                                                                
1:35:55 PM                                                                                                                    
CHAIR EGAN announced the consideration of SB 138.                                                                               
                                                                                                                                
SENATOR BILL WIELECHOWSKI,  sponsor of SB 138, noted  that he had                                                               
worked on  a committee substitute  (CS) with the  billing service                                                               
group and the  Department of Law and Thomas  Presley, his intern,                                                               
would explain the changes.                                                                                                      
                                                                                                                                
1:36:37 PM                                                                                                                    
SENATOR PASKVAN moved to bring  CSSB 138( ), version 27-LS1002\R,                                                               
before  the  committee for  discussion  purposes.  There were  no                                                               
objections, and it was so ordered.                                                                                              
                                                                                                                                
THOMAS PRESLEY,  Intern for Senator Wielechowski,  said version R                                                               
reflects  input from  the  last  hearing on  SB  138.  It has  an                                                               
updated  zero  fiscal  note from  the  Regulatory  Commission  of                                                               
Alaska (RCA).                                                                                                                   
                                                                                                                                
The changes in version R are as follows:                                                                                        
                                                                                                                                
Section  1: the  definition  for  telecommunications carrier  was                                                               
limited to  a single definition. Previously  this definition read                                                               
"those  who  are  eligible for  universal  service  funds."  This                                                               
change  was  made  because previous  language  captured  wireless                                                               
carriers, which is not the intent of SB 138.                                                                                    
                                                                                                                                
Section 3:  (d), which  gave regulation  making authority  to the                                                               
RCA,  was  removed and  placed  into  Section  1. This  was  done                                                               
because  the  RCA's  jurisdiction  is defined  by  AS  42.05  and                                                               
sections 2 -  4 of the bill are written  into consumer protection                                                               
statutes.                                                                                                                       
                                                                                                                                
Section 3: (c)  the exceptions language was cleaned  up on advice                                                               
from the RCA attorney, Stuart Goering, because it was redundant.                                                                
                                                                                                                                
Section  3: subsection  (c)(4)(A)  incorporates suggestions  from                                                               
the  billing  services group  in  order  to clarify  how  express                                                               
authorization is obtained and verified.                                                                                         
                                                                                                                                
Section 3: (d) defines billing agent and express authorization.                                                                 
                                                                                                                                
Section 3:  (d) (3) makes  the definition  of "telecommunications                                                               
carrier" inclusive of land line  telephone bills only. Previously                                                               
the definitions unintentionally captured wireless carriers.                                                                     
                                                                                                                                
1:39:45 PM                                                                                                                    
SENATOR GIESSEL  asked if  the concept of  cramming is  a problem                                                               
with cell phones.                                                                                                               
                                                                                                                                
MR. PRESLEY  replied that evidence  presented in the  U.S. Senate                                                               
Committee  report shows  that  there is  a  growing concern  that                                                               
wireless  telephone bills  may also  be  subject to  unauthorized                                                               
charges,  but  the  Federal Communication  Commission  (FCC)  and                                                               
draft legislation  in other states  is only focused on  land line                                                               
telephone bills. Cell phone bills  have different regulations and                                                               
wireless  carriers are  regulated  by  different entities;  their                                                               
third-party billing platforms work differently, as well.                                                                        
                                                                                                                                
SENATOR GIESSEL asked  if the Federal Trade  Commission (FTC) was                                                               
addressing this issue, too.                                                                                                     
                                                                                                                                
MR.  PRESLEY replied  that  was  correct. The  FCC  has the  open                                                               
docket related to  land line telephone bills.  They took comments                                                               
on wireless carriers  in their notice of  proposed rulemaking and                                                               
that's  when it  became an  issue. The  docket, itself,  does not                                                               
address policies to eliminate wireless cramming.                                                                                
                                                                                                                                
SENATOR GIESSEL asked about the Federal Trade Commission (FTC).                                                                 
                                                                                                                                
MR. PRESLEY replied  that the FTC has only  pursued cases against                                                               
land  line telephone  billers that  have been  accused and  found                                                               
guilty of third-party telephone cramming for land line carriers.                                                                
                                                                                                                                
CHAIR  EGAN commented  that he  appreciated the  changes made  to                                                               
this bill, but  he thought another committee  substitute would be                                                               
needed in a couple of years  to address cell phones because their                                                               
use is expanding so rapidly.                                                                                                    
                                                                                                                                
SENATOR WIELECHOWSKI  said his understanding  of the law  is that                                                               
the  state can  only capture  cell  phones for  certain parts  of                                                               
Alaska for all telecommunication carriers.                                                                                      
                                                                                                                                
MR. PRESLEY said  those wireless carriers are  called carriers of                                                               
last  resort in  case  Bush  Alaska does  not  have  a land  line                                                               
telephone  carrier that  can reach  them. In  that case,  the RCA                                                               
would have  jurisdiction over wireless  telephones that  would be                                                               
used.                                                                                                                           
                                                                                                                                
CHAIR EGAN  asked if  that meant  they were  their only  means of                                                               
communication.                                                                                                                  
                                                                                                                                
MR. PRESLEY answered, "correct."                                                                                                
                                                                                                                                
1:42:40 PM                                                                                                                    
SENATOR PASKVAN  moved to report  CSSB 138(L&C), version  R, from                                                               
committee  with  individual  recommendations  and  newly  revised                                                               
fiscal note. There being no objection, the motion carried.