California still needs to be a broadband activist

by Steve Blum • , , ,

Market actor.

Ahead of a legislative effort to shake up the way it does business, the California Public Utilities Commission adopted a high-level strategic management plan at its last meeting. The document contains the usual boilerplate about agency effectiveness, performance, and respect for the staff and the public, and touches all the politically correct bases.

But it also describes an activist role in managing the industries under its jurisdiction, including telecommunications, whether or not it can do so via direct, regulatory authority. For example, in order to ensure “that rates are just and reasonable”, the commission will…

For services where the CPUC does not directly regulate prices, monitor market conditions and take appropriate action if it appears that rates are no longer just and reasonable.

And “to provide Californians with access to necessary services”…

Promote policies and rules that provide universal service for energy, communications, water, and transportation…
Facilitate the expansion of equitable access to energy, communications, water, and transportation services.

Which includes the need to…

Encourage innovation, competition, and consumer choice in the services and technologies available to consumers.

I’ve cherrypicked a handful of sentences out of four dozen pages, but even so I’d argue it’s a fair description of a mission that goes beyond blandly accepting assurances that incumbent service providers have everyone’s best interests at heart. The justification for CPUC oversight is that utilities – broadband included – are natural monopolies that need an artificial counterweight in order to maintain something approaching a functioning market.

The telecoms industry no longer operates under the kind of micro-regulation that still obtains in the energy sector, nor should it. But it’s still the state’s duty to provide the necessary counterweight and, whether the job stays with the CPUC or lands in another agency or is taken up by its local governments, it should maintain a role that puts the principles of market rates, competition and universal service into action.