SENATE BILL 691

Testimony of Chris LaRowe

Manager of External Affairs, WSTA

Before the Senate Judiciary, Corrections & Privacy Committee

Monday, April 17, 2006

Good afternoon.  Mr. Chairman.  Committee members.  Thank you for the opportunity to be here today.  As was stated, my name is Chris LaRowe – I’m the Manager of External Affairs for the Wisconsin State Telecommunications Association (WSTA).  Our membership includes 10 wireless carriers providing service in the state of Wisconsin.

I am testifying today “For Information Only” on SB 691.  While the bill, as introduced, is not overly problematic for our membership and we don’t oppose it – we don’t feel it’s necessary given all of the major carriers have voluntary instituted programs to address this issue, which we feel are very workable and reasonable.  Examples include:

• Waiving early termination fees;
• Holding contracts in abeyance for 1 year up to 18 months and beyond; and
• Termination of the service contracts without penalty in the event of relocation by an individual outside of the licensed service territory.

To the extent there exists isolated problems related to service contracts with members of the Military when they are ordered into Active duty, the industry remains committed to cooperatively working with those individuals and/or the Department of Military Affairs to amicably resolve those issues.  As for the Amendment, which was adopted in the Assembly committee, and may be before you today, as we have expressed to the authors, we have serious concerns, especially as it relates to the damages language.

This section of the Amendment allows a court to award up to 3 times the amount of any termination fee or penalty charged by the wireless carrier.  By itself, this is a significant concern, especially in situations where the charges were made because of an inadvertent mistake.  However, the amendment also allows the court to add up to $10,000 of “exemplary” or “punitive” damages as well as attorney and court fees.  This means that the damages section is not limited to the amount charged by the wireless carrier, but is effectively at the discretion of a court, and limited only by a very high $10,000 ceiling.  As such, a simple mistake could result in a judgment of well over $10,000 against a wireless carrier.  For an industry that has, by in large, been addressing this concern with proactive policies to help customers who are called to Active duty, this is a significant penalty to face.

In addition, the provisions related to vehicle and premises leases described in the analysis by the Legislative Reference Bureau, are Federal requirements and a cursory review of the associated Federal penalties indicate they are much less severe than those included in Assembly Amendment 1.

In closing, there are other issues related to Military personnel requiring proof of orders, wireless carriers knowingly violating the statutes, or some form of gross negligence, and how to handle expensive handsets associated with some of these service contracts that remain a work in progress and we would respectfully request additional time to work with the authors to find reasonable middle-ground.

Again, thank you for your time and I’d be happy to answer any questions.

NOTE: The Assembly companion bill is AB 1174