SB2324

THE SENATE	S.B. NO.	2324
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII

A BILL FOR AN ACT

relating to consumer protection.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The legislature finds that the advancement in wireless technology has increased the affordability and use of mobile wireless phone services. Many people, particularly elderly individuals and individuals with special needs, use mobile wireless phones as a safety tool in case of an emergency.

Billing practices of companies providing mobile wireless phone services are often complex and difficult to understand. Consumers have frequently found themselves in a long term contract with higher than expected monthly bills. In addition, service providers unfairly lock consumers into these long-term contracts with high cancellation costs.

The purpose of this Act is to protect consumers from high mobile wireless phone service contract cancellation costs and to promote a more competitive market where consumers choose their mobile wireless phone service provider based on quality of service rather than length of contract, by prohibiting wireless telecommunication service providers from charging unfair penalties for service agreement cancellation.

SECTION 2. Chapter 269, part I, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

"§269- Wireless telecommunication providers; early termination fee. (a) For the purposes of this section "wireless telecommunication service" means commercially available interconnected mobile phone service that provides access to the public switched telephone network (PSTN) via a mobile communication device employing radiowave technology to transmit calls, including cellular radiotelephone, broadband Personal Communications Services (PCS), and digital Specialized Mobile Radio (SMR). "Wireless telecommunication service" does not include mobile satellite service or mobile data service used exclusively for the delivery of nonvoice information to a mobile device.

(b) "Month-to-month account" means an agreement for wireless telecommunication service where the customer is not required to purchase more than one month of service.

(c) "Prepaid account" means an agreement for wireless telecommunication service for a specified dollar amount less than one hundred dollars that the customer pays in full before receiving service.

(d) Each provider of wireless telecommunication service shall extend to new service customers, without cost or penalty, a grace period of at least thirty days after executing the agreement, or ten days after receipt of the first bill, whichever is later, for customers to cancel the service agreement and terminate service, if the customer finds that the service quality is unsatisfactory, except that the customer shall pay for those services used before the cancellation of the service agreement. Each wireless telecommunication service agreement shall provide reasonable notice of this grace period and the right of the customer to cancel the agreement if the customer finds that the service quality is unsatisfactory.

(e) Each provider of wireless telecommunication service shall extend to existing customers, without cost or penalty, a grace period of at least thirty days after executing an agreement for additional service, renewal of service, or modification of service, for customers to cancel the agreement and terminate service, if the customer finds that the service quality is unsatisfactory, except that the customer shall pay for those services used before the cancellation of the agreement. Each new wireless telecommunication service agreement with an existing customer shall provide reasonable notice of this grace period and the right of the customer to cancel the agreement if the customer finds that the service quality is unsatisfactory.

(f) If an agreement for wireless telecommunication service is canceled after the grace period and before the end of the term of the agreement, any early termination fee or penalty shall be reduced by a fraction equivalent to the number of months in the agreement term that have elapsed over the total number of months in the agreement term.

(g) This section does not apply to a month-to-month account or a prepaid account.

(h) A third-party vendor of wireless telecommunication service shall not charge a customer any early termination fee or penalty payable to the third-party vendor for canceling an agreement for wireless telecommunication service before the end of the term of the service agreement."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect on January 1, 2009.

INTRODUCED BY:	_____________________________