Battle over unlisted phone numbers returns to the Capitol

The fight over whether customers should have to pay to keep their phone numbers unlisted is coming back to the Legislature this year, reprising a heated battle between telephone companies and consumer groups.

The bill, SB 437 by Sen. Fran Pavley, D-Agoura Hills, picks up where Sen. Sheila Kuehl’s SB 1423 left off last year. Kuehl’s bill was bottled up in the state Senate after aggressive lobbying from AT&T and other telephone companies – and reported intervention from the head of the Public Utilities Commission.

Under current law, the Public Utilities Commission does not regulate large telephone companies’ ability to charge customers for unlisted numbers. Two years ago, the commission also opted to deregulate a host of fees, including the unlisted number fee. Since that time, according to a Senate Committee analysis, fees for unlisted numbers have increased from 28 cents per month to $1.25 per month.

Phone companies argue a change in the law could cost them millions. For AT&T the lost revenue will be about $50 million annually, according to a Senate analysis of Kuehl’s 2008 bill.   They also say restrictions on the unlisted number fees could cause them to increase other telephone rates.

Consumer groups, led by The Utility Reform Network, are sponsoring the Pavley bill. They say people should not have to pay for their privacy, and note that smaller phone companies are already prohibited from charging for unlisted numbers.  

“I see it as a privacy issue and a fairness issue,” Pavley said. “ Cell phone users don’t have to charge for unlisted numbers. And this is an ongoing fee for something that doesn’t cost the phone companies anything.”

The fight is sure to be a costly one, as phone companies once again mobilize to kill the bill. Last year, the measure became one of the most contested bills in the Capitol, with one consumer lobbyist complaining, (the phone companies) “have hired half the lobbying world” to kill the bill.

Those efforts succeeded when the bill died in the state Senate.

 Pavley acknowledges she is facing long odds, but says the current economic climate may help the bill’s passage. “The timing is important,” she said. “Even though we’re not talking about a great deal of money, it adds up over time.

 The bill is opposed by AT&T, the largest player in California’s telephone market, and a coalition of companies and businesses that includes Verizon, Frontier, SureWest and the state Chamber of Commerce. Their lobbying firms and advocates include some of the most powerful in the Capitol. The list includes Manatt Phelps, Aaron Read, Kahl/ Pownall, Platinum Advisors, former Sen. Richard Polanco, Lang Hansen O’Malley and the Flanigan Law Firm.

Pavley said she expects a similar full-court press this year. “Lobbyists are already starting,” their efforts to kill the bill. “But we have a new pro tem and hopefully consumer protection is something that will be a priority.”

The dust-up over the bill led Public Utilities Commission President Michael Peevey to reach out to Senate Leader Don Perata to help kill the bill in the state Senate. Perata asked Kuehl to remove the bill from a scheduled hearing in Seante Appropriations—which she did, and that’s where her bill died.

Supporters of the bill say phone companies collect as much as $70 million annually in unlisted number fees. They believe it is a privacy issue, question the propriety of seeking the PUC’s involvement and believe phone companies are being allowed to charge customers for essentially doing nothing. And they contend that Democrats and Republicans have told them privately that they like the bill but fear the combined lobbying clout of the communications companies.