AT&T faces contempt hearing as CPUC defines VoIP regulatory role

by Steve Blum • , , , ,

Bluto pencils

The first shot in what could be the defining regulatory battle over broadband in California was fired in the closing days of December by the California Public Utilities Commission. An administrative law judge (ALJ) ordered AT&T

To show cause, if any, why [AT&T] should not be:

  1. Found in contempt of [a 2019 CPUC decision regarding disaster preparedness].
  2. Found in violation of the Public Utilities Code and [a CPUC rule requiring telcos to file price/service terms (aka tariffs)].
  3. Fined, penalized, or have other sanctions imposed for failing to comply with a Commission decision, [commission rules], and the Public Utilities Code.

The dispute began last Spring when CPUC demanded that AT&T file a notice – an “advice letter” – detailing its terms for “Next Gen” 911 service, which will run over an Internet protocol connection, like other Internet data, rather than using legacy copper network switching and other 20th century technology.

AT&T first blew off the demand, and then said it’s none of your business

[Mark Berry, AT&T regulatory director] spoke with [CPUC] staff and relayed the following in response to the question of why AT&T had not filed an advice letter:

  1. AT&T does not offer the services referred to in the letter and even if it did offer these services, AT&T does not agree that the CPUC can require a tariff because under [a now expired public utilities code section], the CPUC does not have authority to regulate IP-enabled services.
  2. If AT&T offers Next Gen 911services in the future, it will not file tariffs because the CPUC does not have authority over these services.

The CPUC and AT&T exchanged more such pleasantries, until AT&T finally filed some paperwork, without answering the questions asked. So AT&T executives were ordered to appear at a hearing later this month to explain themselves.

This kind of arm wrestling over filing and disclosure requirements is nothing new. Business as usual would be a good description, although it usually doesn’t get this far. This case is significant because the primary legal basis for AT&T’s refusal expired at the end of 2019. It was a law enacted in 2012 that banned the CPUC from regulating Voice over Internet Protocol (VoIP) or other “Internet protocol enabled” services. Back then, VoIP was still a developing technology, and telcos and cable companies hadn’t gone all in on it as a replacement for legacy copper service and as a way to get out from under the regulatory oversight that comes with it.

AT&T and other monopoly model telecoms companies tried to get the ban extended last year, but ran into a brick wall in Sacramento, also known as the Communications Workers of America. The betting is that they’ll try again this year – why spend billions on service quality when a few million in the pockets of lawmakers will get you off the hook?

So it’s up to the CPUC to figure out how VoIP fits into California’s regulatory ecosystem. One way the commission can do that (relatively) quickly is to litigate disputes like this one, and bake new case law into the resulting decision.