HOUSE COMMITTEE ON

BUSINESS, LABOR AND CONSUMER AFFAIRS

January 27, 2003 Hearing Room E

8:30 A.M. Tapes 9 - 10

MEMBERS PRESENT: Rep. Betsy Close, Chair

Rep. Derrick Kitts, Vice-Chair

Rep. Diane Rosenbaum, Vice-Chair

Rep. Mary Gallegos

Rep. Bill Garrard

Rep. Jeff Merkley

Rep. Mike Schaufler

STAFF PRESENT: Megan Palau, Committee Administrator

Mike Reiley, Committee Assistant

MEASURE/ISSUES HEARD: HB 2198 & HB 2230 – Public Hearing

HB 2229 & HB 2231 – Public Hearing

These minutes are in compliance with Senate and House Rules. Only text enclosed in quotation marks reports a speaker’s exact words. For complete contents, please refer to the tapes.

TAPE/#	Speaker	Comments
TAPE 9, A
003	Chair Close	Calls meeting to order at 8:33 am. Opens public hearing on HB 2198 and HB 2230.
HB 2198 & HB 2230 – PUBLIC HEARING
020	Lee Beyer	Commissioner, Public Utility Commission (PUC). Submits prepared testimony and testifies in support of HB 2198 and HB 2130 (EXHIBIT A).
093	Rep. Garrard	Asks if PUC is capable of handling consumer complaints effectively.
096	Beyer	Answers yes. Explains role of PUC in handling complaints.
116	Rep. Merkley	Asks if there are practices to prevent slamming and cramming before it occurs.
122	Clark Jackson	Manager, Consumer Services Division, PUC. Refers to chart in written testimony and explains complaint process.
140	Beyer	Explains how slamming works and process for addressing it.
160	Jackson	Offers further clarification of slamming process.
162	Chair Close	Asks if Department of Justice (DOJ) and PUC are doing separate investigations.
173	Beyer	Explains how consumers address slamming complaints.
190	Jackson	Clarifies that there would not be duplicate fining with DOJ and PUC.
210	Chair Close	Asks about PUC funding.
214	Jackson	Explains funding for PUC.
220	Rep. Merkley	Asks where potential PUC fines would go.
224	Beyer	Responds that fines would go to general fund.
232	Rep. Rosenbaum	Asks if there is a requirement for written permission for customers to change phone carriers.
239	Jackson	Explains authorization process.
247	Rep. Rosenbaum	Asks for clarification of difference between HB 2198 and HB 2230.
251	Beyer	Explains differences between HB 2198 and HB 2230.
263	Rep. Rosenbaum	Asks if Federal Communication Commission (FCC) permission is required for PUC to regulate.
268	Jackson	Explains process for PUC to obtain regulation authority.
277	Rep. Schaufler	Asks if phone companies have ever been fined for slamming.
285	Jackson	Explains fining of phone companies.
295	Beyer	Answers that PUC has not fined companies and complaints have been referred to different agency.
311	Rep. Schaufler	Asks if number of complaints would be reduced.
316	Jackson	Responds that from data from other states indicates that fining authority should be deterrent.
334	Beyer	Reiterates that intention of PUC is to protect customers, not impose fines.
377	Brant Wolf	Oregon Telecommunication Association. Submits and summarizes prepared testimony regarding HB 2198 & HB 2230 (EXHIBIT B). Expresses OTA’s reservations regarding HB 2198 and HB 2230.
TAPE 10, A
007	Chair Close	Asks about enforcement of slamming.
010	Wolf	Explains process for slamming enforcement.
015	Chair Close	Asks about economy of scale of federal vs. state regulation.
019	Wolf	Responds that consistency is important.
024	Chair Close	Asks if two fines could be implemented.
025	Wolf	Responds that it could if two agencies have fining authority.
030	Rep. Gallegos	Asks how customers would be directed to file complaints.
035	Wolf	Responds that customers would be directed to FCC.
044	Rep. Gallegos	Expresses concern that customers would not know where to turn in case of slamming.
054	Wolf	Responds that customer would be referred to FCC by phone companies.
060	Rep. Garrard	Expresses concern that FCC would be able to efficiently handle issue.
070	Wolf	Concurs. Argues that legislation should specific in addressing issues.
076	Rep. Schaufler	Asks how companies make money.
090	Wolf	Responds that he does not know.
094	Rep. Kitts	Expresses concern over additional layer of bureaucracy.
110	Schelly Jensen	Regulatory and Governmental Affairs Manager, Verizon. Testifies that Verizon seeks consistency in laws.
138	Rep. Merkley	Asks about Washington rules regarding slamming.
142	Jensen	Responds that she is unsure.
146	Chair Close	Asks if those who solicit customers are independent contractors.
148	Jensen	Responds that companies are responsible for authorization.
150	Chair Close	Asks how phone companies control those who act for them.
152	Jensen	Explains control procedures.
157	Chair Close	Asks to whom the fine would be applied.
158	Jensen	Responds how fines are applied.
170	Chair Close	Asks about PUC’s ability to impose fine.
171	Jensen	Responds that FCC charge is appropriate.
179	Cathy Brightwell	Director of Government Affairs, AT&T. Testifies against bills.
201	Rep. Merkley	Asks if Washington is a model in how they have implemented legislation.
206	Brightwell	Responds that Washington has opted into FCC procedure and it has been effective.
217	Rep. Merkley	Asks if PUC authority would be similar in Oregon.
220	Brightwell	Responds that various states have handled it differently.
230	Ginny Lang	Director of Governmental Relations, Qwest. Submits and summarizes prepared testimony in opposition to HB 2198 and 2230 (EXHIBIT C).
280	Chair Close	Asks if Qwest deals in New Hampshire.
281	Lang	Responds no. Explains Qwest’s operations.
290	Chair Close	Asks about complaints in Oregon and New Hampshire.
300	Jensen	Responds that she is unsure.
304	Rep. Schaufler	Asks what should be done differently to allow PUC to enforce rules.
325	Lang	States that she is concerned about vagueness of legislation.
333	Rep. Rosenbaum	Asks about issues with language.
347	Lang	Responds that FCC rules should be more specifically addressed.
350	Rep. Garrard	Asks what phone companies have done to eliminate slamming.
368	Lang	Explains actions of Qwest to eliminate slamming.
402	Brightwell	Explains how AT&T has addressed issue.
453	Rep. Schaufler	Asks how many states have adopted FCC rules and how many have created their own rules.
458	Brightwell	Explains states’ adoption of rules.
470	Rep. Merkley	Asks if there are specific FCC regulations for customer authorization.
TAPE 9, B
004	Brightwell	Explains how authorization works.
023	Rep. Merkley	Asks what companies are concerned about with legislation.
034	Brightwell	Responds that AT&T is concerned that rules may be inconsistent with federal law.
050	Rep. Garrard	Asks about fining authority.
055	Lang	Responds about fining authority.
057	Chair Close	Asks about consistency with federal law.
062	Brightwell	Explains issues regarding consistency.
068	Cheryl Pellegrini	Attorney-in-Charge, Financial Fraud/Consumer Protection Section, Oregon Department of Justice. Submits and summarizes prepared testimony regarding role of DOJ and PUC regarding slamming regulation (EXHIBIT D).
135	Chair Close	Asks if SB 120 is the same bill.
136	Pellegrini	Responds “virtually.”
141	Chair Close	Asks if legislation is necessary due to DOJ progress on issue.
151	Pellegrini	Explains agencies’ ability to handle customer complaints.
170	Chair Close	Asks why New Hampshire has so many complaints.
175	Pellegrini	Explains figures in New Hampshire and Oregon.
184	Rep. Garrard	Asks if DOJ would go after telemarketer or telecom companies.
188	Pellegrini	Explains relationship between telemarketer and telecom companies.
209	Rep. Rosenbaum	Asks for distinction between current statute and proposed legislation.
217	Pellegrini	Explains how complaint process operates.
241	Rep. Rosenbaum	Asks if customers are referred to FCC or handles by DOJ.
246	Pellegrini	Responds that FCC has few resources to address slamming.
261	Rep. Gallegos	Asks why additional legal authority is necessary.
270	Pellegrini	Explains why legal authority is necessary.
290	Rep. Gallegos	Asks if there will reduction in staff at DOJ if legislation was passed.
293	Pellegrini	Answers no.
304	Chair Close	Closes public hearing on HB 2198 & HB 2230. Opens public hearing on HB 2229 & HB 2231.
HB 2229 & HB 2231 – PUBLIC HEARING
318	Beyer	Submits and summarizes prepared testimony in support of HB 2229 and HB 2231 (EXHIBIT E).
391	Chair Close	Asks for figures regarding slamming and cramming.
395	Jackson	Summarizes figures.
426	Rep. Gallegos	Asks about magnitude of issue.
443	Beyer	Explains how PUC operates regarding complaints.
019	Rep. Merkley	Asks if there has been national campaign by FCC to address uniform laws.
036	Jackson	Explains efforts to implement uniform laws.
045	Rep. Gallegos	Asks about PUC ability to handle complaints.
048	Jackson	Explains Consumer Services within PUC.
065	Beyer	Explains that they get calls every 2-3 min.
072	Wolf	Reiterates previous testimony regarding previous bills.
083	Chair Close	Asks about PUC in Washington.
085	Wolf	Responds.
087	Rep. Merkley	Asks if FCC can enforce regulations.
103	Wolf	Responds yes.
106	Rep. Merkley	Asks about enforcement at state level.
120	Wolf	Explains state enforcement.
132	Jensen	Emphasizes implementation of policies to prevent cramming.
144	Dave Paulson	Sprint. Addresses language in HB 2229 and HB 2231.
164	Chair Close	Closes public hearing on HB 2229 and HB 2231. Adjourns meeting at 10:08 am.

EXHIBIT SUMMARY

A – HB 2198, HB 2230, prepared testimony, Lee Beyer, 7 pp

B – HB 2198, HB 2230, prepared information, Brant Wolf, 7 pp

C – HB 2198, HB 2230, HB 2229, HB 2231, prepared testimony, Virginia Lang, 1 p

D – HB 2285, prepared testimony, Cheryl Pellegrini, 3 pp

E – HB 2229, HB 2231, prepared testimony, Lee Beyer, 4 pp