HB 4536 Text

H. B. 4536

(By Delegate Amores)
[Introduced February 13, 2006 ; referred 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 services agreements; prohibiting initial term of landline customer services agreement greater than five years; providing that after initial term of landline customer services agreement the term shall be on a month-to-month basis unless customer signs new landline customer services 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 services agreements, whether in their original term or in a rollover term; and providing that act does not apply to services 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.

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