(a) (1) Notwithstanding the provisions of Section 17026, commissions or rebates regularly earned by the retailers of cellular telephones may be used to reduce cost, provided, that in no event shall the reduction exceed the greater of the following:

(A) Ten percent of cost, as defined in Section 17026.

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(B) Twenty dollars ($20).

(2) Consistent with the provisions of subdivision (d) of Section 17050, providers of cellular services shall be permitted to sell cellular telephones below cost, provided that sales below cost are a good faith endeavor to meet the legal market prices of competitors in the same locality or trade area.

(b) In each retail location, all retailers of cellular telephones shall post a large conspicuous sign, in lettering no smaller than 36-point type, that states the following: “Activation of any cellular telephone is not required and the advertised price of any cellular telephone is not contingent upon activation, acceptance, or denial of cellular service by any cellular provider.”

The sign shall be prominently displayed and visible to consumers and located in that area in each retail location where cellular telephones are displayed and purchased.

(c) No retailer of cellular telephones shall refuse to sell a cellular telephone to any customer solely on the basis of the customer’s refusal to activate the telephone with the provider of cellular service for whom the retailer is an agent. Nothing herein shall preclude a retailer from limiting the number of cellular telephones that he or she is otherwise required under this subdivision to sell to any single customer.

The intent of this subdivision is to reaffirm the Legislature’s support for the Public Utilities Commission’s policy that makes illegal the act, or practice, of “bundling,” as defined and described in relevant decisions and orders of the commission.

(d) The Public Utilities Commission may adopt rules and regulations to fully implement and enforce the provisions of this section.

(e) Nothing in this section shall be interpreted to reduce, alter, or otherwise modify the authority of the California Public Utilities Commission to regulate, in any manner, or prohibit, the payment of commissions or rebates to distributors or vendors of cellular telephones. The provisions of this section shall be effective only to the extent that they do not conflict with any applicable regulations, rules, or orders promulgated or issued by the Public Utilities Commission.

(f) This section shall become operative on January 1, 1994.

(Added by Stats. 1992, Ch. 542, Sec. 1. Effective January 1, 1993. Section operative January 1, 1994, by its own provisions.)