Senate Bill No. 550
(By Senator Kessler)
____________
[Introduced February 10, 2006; referred to the Committee
on Transportation and Infrastructure; and then to the Committee
on the Judiciary.]
____________
A BILL to amend the Code of West Virginia, 1931, as amended, by
adding thereto a new section, designated §24-2E-2, relating
generally to improving competition among telephone public
utilities providing landline services; prohibiting telephone
public utilities from using automatic renewal provisions in
their landline customer service agreements; prohibiting
initial term of landline customer service agreement greater
than five years; providing that after initial term of landline
customer service agreement the term shall be on a
month-to-month basis unless customer signs new landline
customer service agreement; limiting termination fees charged
by telephone public utilities for landline service and
providing method of computing termination fee; specifying how
this act applies to existing landline customer service agreements, whether in their original term or in a rollover
term; and providing that act does not apply to service
agreements between two telephone public utilities.
Be it enacted by the Legislature of West Virginia:
That the Code of West Virginia, 1931, as amended, be amended
by adding thereto a new section, designated §24-2E-2, to read as
follows:
ARTICLE 2E. REQUIREMENTS FOR PHONE SERVICE SALES.
§24-2E-2. Telephone Services Agreements.
(a) Prohibition on automatic renewals; length of services
agreements. -- No telephone public utility may include an automatic
renewal or rollover provision in its customer services agreement
except as provided in this section. All landline telephone
services agreements shall provide that at the end of the initial
term thereof, unless a new agreement is signed by the customer, the
term of the then existing telephone services agreement shall
thereafter be on a month to month basis. No telephone services
agreement may provide for an initial term of more than five years.
(b) Limitation on termination fees. -- No telephone public
utility may impose on any customer whose landline services
agreement is then on a month-to-month term a termination fee that
is greater than the charges for one month of service, which fee
shall be computed by averaging the charges for telephone services
during the previous four months invoiced to the terminating customer by the telephone public utility.
(c) Services agreements already automatically renewed. -- A
customer of a telephone public utility whose landline services
agreement contains an automatic renewal or rollover provision, that
has been deemed by the telephone public utility to have
automatically renewed prior to the effective date of this section
is permitted at any time on or after the effective date of this
section to terminate the agreement without incurring a termination
liability greater than that permitted in subsection (b) of this
section.
(d) Limitation on applicability. -- The provisions of this
section do not apply to services agreements between one telephone
public utility and another telephone public utility.
NOTE: The purpose of this bill is to promote competition for
landline telephone contracts among the telephone utilities which
are licensed to do business in the State of West Virginia. Use of
automatic renewal provisions by telephone public utilities in the
State of West Virginia stifles competition and results in a
detrimental effect on consumers in that they are not able to obtain
the lowest cost, highest quality telephone service. Rather,
consumers are artificially locked into an arrangement for which
they did not bargain. The legislation provides standards for
landline telephone contracts that would require telephone companies
to issue new contracts to customers upon expiration of the initial
term of the contract or allow the current contract to renew on a
month-to-month basis. The legislation also would provide that
contracts that have been renewed automatically would be limited to
liquidated damages not to exceed an amount equal to one month's
service fee, exclusive of long distance charges.
This section is new; therefore, strike-throughs and
underscoring have been omitted.