Tag Archives: ab1366

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.

Internet regulation is at the top of California’s 2020 policy wish (or wish not) list

by Steve Blum • , , , ,

2020 might be the year that the State of California figures out what, if any, role it will play in regulating (or not) broadband service and infrastructure. As of tomorrow, the California Public Utilities Commission is no longer barred from regulating services like VoIP (voice over Internet protocol). A 2012 state law that said the CPUC couldn’t do that expired at the end of 2019.

But that doesn’t mean that anything is decided.

AT&T and its fellow monopoly model Internet service providers tried to get an extension of that ban approved in the California legislature this year. Assembly bill 1366 made it through the gauntlet of committee hearings to pass in the assembly and nearly reach a floor vote in the senate. It was finally stalled by opposition from the Communications Workers of America – organised labor contributes even more money and other kinds of support to California politicians than cable and telephone companies.

Stalled, but not stopped completely. AB 1366 can be resurrected next month, or a new bill can be written that would accomplish the same thing. Or maybe come at it from a different direction.

AB 1366 didn’t address broadband service as such. It’s about “Internet protocol enabled” services – anything that rides on top of broadband service – although regulations for a top level service could have implications for the underlying broadband service too. It would have extended an existing ban on IP-enabled service regulations by any state agency or local government. That could mean anything from Facebook to email to Netflix to Google search, which arguably shouldn’t be regulated at the state level. It also means VoIP, which is voice telephone service that runs on top of unregulated broadband service rather than via the old dial up, regulated phone network, AKA “plain old telephone service” (POTS).

A 2019 federal appeals court ruling allowed state-level regulations, although to what extent is still an open question. California already has Internet regulations on the books – a 2018 bill imposed network neutrality rules on ISPs. Enforcement, which is in the hands of the California attorney general, is stalled until federal court challenges are resolved. But the door is now open. Whether, and how, California lawmakers walk through it is top of the broadband policy watch list for the new year.

California legislature tweaks telecoms policy instead of killing it

by Steve Blum • , , , ,

Despite AT&T’s quest for de facto deregulation of telecommunications infrastructure and service, no major telecoms policy changes emerged from the California legislature this year. A few small ball telecoms-related bills did emerge by the end of the 2019 session early Saturday morning, though, and were sent on to governor Gavin Newsom.

Assembly bill 1366 is dead, at least for this year. There was no last minute conniving to pull it out of the committee deep freeze it landed in earlier in the week. It could come back in 2020, either as a fast track do-over in January or reintroduced as a new bill.

It’s fair bet that lobbyists from AT&T, Comcast, Charter Communications, Frontier Communications and mobile carriers will want to take another try. The moratorium on regulation of voice over Internet protocol (VoIP) phone service and other “Internet protocol enabled” services ends as the new year begins, but there will be no practical effect for months, if not years. There are no VoIP-specific regulations ready to snap back into place and any effort to create new ones, or even reinterpret old ones will take a long time.

A few telecoms bills dealing with more specific issues were approved and are in the governor’s hands, including…

  • AB 1699, Marc Levine (D – Marin) – prohibits mobile carriers from throttling data traffic on accounts used by public safety agencies during emergencies. It’s largely symbolic. The only question is whether mobile carriers, or their lobbying front organisation, will challenge it federal court immediately, or wait until there’s a serious attempt to enforce it.
  • SB 670, Mike McGuire (D – Sonoma) – requires telecoms companies to notify the state office of emergency services when an outage isolates a community. State OES would then pass the information along to local agencies.
  • SB 208 and AB 1132 would crack down on caller ID fraud in various ways.

Newsom has until 13 October 2019 to decide what to do.

AT&T’s backdoor telecoms deregulation bill runs out of room in the California senate

by Steve Blum • , , , ,

Coyote cliff 625

“AB 1366 was pulled by the author, so it will not be considered today”, said senator Ben Hueso (D – San Diego) as he called the senate’s energy, utilities and communications committee to order yesterday. Assembly bill 1366 would extend a ban on regulation of voice over Internet protocol (VoIP) and other “Internet protocol enabled” services in California.

Conventional wisdom says the bill is dead for this year. It wasn’t amended before last night’s constitutional deadline, so there’ll be no more wrangling over the bill’s language. On the other hand, there are still three days left in the legislative session and it’s a high stakes bill for monopoly model telcos and cable companies like AT&T and Comcast. They stuff a lot of cash into lawmaker’s pockets have deep, philosophical points yet to make.

No reason for pulling the bill was offered. A hastily prepared analysis by committee staff shows that the line up of organisations for and against it didn’t change. AT&T, Frontier Communications, and the lobbying front organisation that Comcast and Charter Communications duck behind – the California Cable and Telecommunications Association – still support it; the Communications Workers of America, AT&T’s principal union, and the California Labor Federation still oppose it. In the heat of the end-of-the-session rush, what ends up in print often doesn’t reflect backroom reality, but in this case it’s probably accurate. Organised labor is probably the only force in Sacramento with more political power and money than AT&T, Comcast and Charter.

AB 1366 was disowned on Friday by assembly member Lorena Gonzalez (D – San Diego), who introduced it earlier this year and muscled it to within inches of the goal line. Presumably, she passed it over to two other assembly members – Jay Olbernolte (R – San Bernardino) and Tom Daly (D – Orange) – because the stiff opposition from labor organisations, which are the foundation of her political base, finally made it impossible for her to front for it.

The bill was amended during the handoff, limiting the ban’s extension to two years. But other amendments added even more perks for incumbent telecoms companies, particularly AT&T and, to a lesser extent, Frontier. Not surprisingly, that turned out to be a bad way to win friends in the final days of the legislative session.

The ban on VoIP regulation was imposed by the legislature in 2012, when no one was sure what direction VoIP or other services that ride on the Internet would take. Now we know. Today, VoIP is the telephone service technology preferred by telephone and cable companies because 1. it’s a century or so ahead of legacy copper phone tech, and 2. it’s unregulated. As a California Public Utilities Commission analysis shows, telcos are switching customers to VoIP at a rapid rate, to the point that state regulation of broadband and telephone infrastructure and service, which depends on legacy copper rules, will effectively end.

California telecoms backdoor deregulation bill, AB 1366, stalls

by Steve Blum • , , , ,

Front line dispatch 625

Assembly bill 1366 was “pulled by the author” ahead of a committee hearing this afternoon. The California senate’s energy, utilities and communications committee was supposed to review amendments made last Friday, but that didn’t happen. No reason was given. The bill might be dead, or it might be going through a final rewrite, ahead of tonight’s hard, constitutional deadline for amending it. Or something else – anything is possible today. Tomorrow, well, that’ll be a different story. Stay tuned.

AT&T snakes perks into California deregulation bill, while its author ducks for cover

by Steve Blum • , , , ,

Copper head snake 625

AT&T slipped more special privileges into a bill that would, in effect, deregulate broadband and modern voice service in California. At the same time, the bill was disowned, sorta, by its godmother, assembly member Lorena Gonzalez (D – San Diego).

Assembly bill 1366, which would extend an existing ban on regulation of voice over Internet protocol service (VoIP), was amended ahead of Friday’s soft deadline for changing bill language in the California legislature (Tuesday is the hard, constitutional cutoff for amendments). Many of the changes are tweaks that weaken the few, feeble consumer protections that were added to the bill as it moved through committee and floor votes. AT&T, because of its basic service obligations over a large rural footprint and its plans to replace wireline networks with low capacity fixed broadband technology, will benefit particularly. So will Frontier Communications for the same reasons, albeit over a much smaller subscriber base.

Gonzalez, who introduced the bill and muscled it through the Sacramento sausage machine, took her name off of it and handed it over to a pair of assembly members – Jay Olbernolte (R – San Bernardino) and Tom Daly (D – Orange) – who are less likely to be damaged by blowback from organised labor, which strongly opposes AB 1366.

The prior version of AB 1366 would have allowed current California Public Utilities Commission regulations governing basic telephone service and universal service programs to encompass VoIP service. No longer – those potential loopholes were sewn shut on Friday. A more specific set of rules that sets out requirements for incumbents when they are the “carrier of last resort” – an issue primarily for rural areas – still applies to VoIP, but only to the extent that they must “offer” telephone connections to hard-to-reach customers. The CPUC would no longer be able to oversee “the provision of” those carrier of last resort services. In other words, AT&T and Frontier can use VoIP to meet their most basic service obligations, but the quality and reliability of that service is up to them.

Another gift is the exclusion of “services using radio frequency spectrum licensed by the Federal Communications Commission” from already weak and exception-ridden time frames for restoring VoIP service following an outage. The immediate benefit will be to mobile carriers that use new “voice over LTE” (VoLTE) technology, but over the long term it will also apply to “wireless local loop” (WLL) systems that AT&T plans to use to replace rural telephone lines. WLL runs on licensed spectrum, but not much of it – capacity is a fraction of what wireline networks can carry.

Another change might make AB 1366 easier to swallow for some union allies in the legislature, but also sets up a potentially lucrative payday for lawmakers, particularly those planning to run for statewide office. Instead of lasting five years, the ban on VoIP regulation would only last two years. That would mean a rerun of this session’s backroom dealing, just ahead of the 2022 campaign cycle for California constitutional offices. That’s when big, corporate contributions, such as those AT&T, Comcast and the rest lavish on their friends, are needed to reach voters across the state. Gonzalez plans to run for the California secretary of state’s job then.

Unanimous approval by key committee sends AT&T’s deregulation bill to a vote of the full California senate

by Steve Blum • , , , ,

When the legislative dust settled on Friday, after a whirlwind morning in which the fate of hundreds of bills were announced after being decided behind closed doors in Sacramento, assembly bill 1366 remained alive. Carried by assembly member Lorena Gonzalez (D – San Diego) would, on the face of it, simply extend an existing ban on regulation of “Internet Protocol enabled communications services”, including voice over Internet protocol (VoIP) telephone service.

Given the increasing number of consumers switching – and being switched without their consent – from legacy copper-based plain old telephone service (POTS) to VoIP since the regulatory ban went into effect six years ago, AB 1366 spells a de facto end to state oversight of broadband and telephone infrastructure and service in California. As presently written, AB 1366 has a few exceptions to the broad prohibition on state or local VoIP regulation, but doesn’t say how those will be enforced. According to the most recent legislative staff analysis of the bill, it “places these provisions in a portion of the Business and Professions Code over which no board at the Department of Consumer Affairs has oversight…As a result, lawsuits brought by the Attorney General may be the only mechanism to enforce these provisions”.

AT&T deployed its cash, lobbyists and astroturf non-profit groups to argue for the bill, with universally similar support from Frontier Communications, Comcast and other cable, telephone and mobile companies. So far, it has prevailed over objections from organised labor, the California Public Utilities Commission and the Newsom administration. The seven members of the California senate’s appropriations committee – five democrats and two republicans – unanimously voted in favor of the bill, and passed it on to the senate floor without new amendments.

There’s less than two weeks left in the California legislature’s 2019 regular session, with a soft deadline of the end of this week to amend bills, and a hard, constitutional deadline of next Tuesday. The question will be whether Gonzalez listens to her (otherwise) allies in organised labor – particularly the Communications Workers of America union – and tries to find new language they will accept, or simply sends the current version on to a vote by the full senate.

Newsom administration says telecoms deregulation bill offer little protection, particularly in rural California

by Steve Blum • , , , ,

Leaning pole

Key opposition to assembly bill 1366 is coming from inside California governor Gavin Newsom’s administration. AB 1366 is the bill that would extend a ban on regulation of “Internet protocol enabled services”, including standard telephone service delivered by voice over Internet protocol technology (VoIP). It’s backed by AT&T, Comcast, Charter Communications, Frontier Communications and other telecoms companies, and a long list of non-profit organisations that they pay, but which otherwise have no particular interest in telecoms policy.

The California department of finance registered its formal opposition to AB 1366, which requires sign-off from the governor’s office. The finance department’s objections mirror those made earlier: that the rapid conversion of California’s telephone networks from regulated legacy technology to unregulated VoIP is a backdoor path to complete deregulation of broadband and phone service and infrastructure, and the sham consumer protections added to the bill as window dressing are worthless.

The bill assigns responsibilities of enforcement to the AG without any authority besides litigation and it establishes certain requirements of VoIP service providers without providing any penalty or enforcement mechanisms if they do not comply…

The Legislature and AG do not have any mechanism for resolving those complaints outside of legislation or litigation. The Department of Justice’s resources will likely be taxed given it has to now enforce VoIP service quality requirements and work through all the issues associated with VoIP.

The damage, according to the finance department, will fall disproportionately on rural Californians…

Recent catastrophic wildfires and disasters have demonstrated broader vulnerabilities in the communications grid, highlighted the lack of resiliency, and underscored the need for standards and rules. This bill would continue to prevent the [California Public Utilities Commission] from undertaking investigations or rulemakings that would result in regulations or standards for a large share of the technology used on the communications grid…
Customers who are most at risk of experiencing service abandonment if the [carrier of last resort] requirement is not enforced will be in rural areas where there is no other provider of reliable, affordable telephone service. This represents a significant public safety concern given the increased amount of catastrophic wildfires and disasters in these areas and need to access the communications grid unfailingly.

AB 1366 is in legislative limbo right now. It’s sitting in the California senate’s appropriations committee, which means that legislative leadership will decide on Friday whether it moves forward to a vote by the full senate. Although the millions of dollars that AT&T and the rest of the telecoms industry pays to California senators and assembly members matters a lot, but maybe not as much as the opposition of organised labor and, now, the governor’s office, if not the governor himself.

California telco deregulation bill amended, but not by much

by Steve Blum • , , , ,

Burlingame pole 8aug2019

The latest, but probably not the final, amendments to assembly bill 1366 are posted on the California legislature’s website. It’s the bill that would extend a current ban on regulation of “Internet protocol enabled” services, including, particularly, voice over Internet protocol (VoIP) service.

The new version does not address the core objection of telecoms labor unions and the California Public Utilities Commission. They say that because AT&T and Frontier are switching customers from regulated legacy telephone technology to unregulated VoIP service, extending the ban on VoIP regulation would effectively deregulate telephone service completely in California.

On the whole, the new amendments track with suggestions made in the most recent legislative committee analysis of AB 1366. The biggest change to the bill is to the extension itself: it’s now five years instead of ten. Another change is that telephone companies that have obligations to provide a basic level of voice service to anyone that wants it – AT&T is the biggest example – would still have to do that, even if they were using VoIP technology.

There’s still a requirement in the bill for residential VoIP providers to “initiate steps to restore service within 24 hours of receiving a report of a service outage” and complete the restoration within 72 hours, although there’s a long list of exceptions to the rule. Language was added to clarify 1. that the California attorney general “may” – not shall – “institute and prosecute actions or proceedings to enforce” the new rules, and 2. that the CPUC has no “jurisdiction or authority” in that regard.

Other changes require the CPUC to collect consumer complaints and forward them to the attorney general, and allow the California office of emergency services to set some 911 standards.

The Communications Workers of America, AT&T’s biggest union, is strongly opposed to the bill, and democratic lawmakers have been visibly uncomfortable with the idea of going against their wishes. Right now AB 1366 is in the hands of the senate’s appropriations committee, which will decide behind closed doors at the end of the month whether it moves forward or not.

Money talks or AT&T broadband walks, CPUC study shows

by Steve Blum • , , , ,

Haas att broadband study

How much money you and your neighbors make determines whether or not you have access to modern broadband service and infrastructure. The network practices study released on Monday by the California Public Utilities Commission cites conclusive evidence of aggressive redlining by AT&T. It is a major – and actionable – report that makes the case against the two companies, but its conclusions come as no surprise.

A study done in 2017 by U.C. Berkeley’s Haas Institute for a Fair and Inclusive Society found that…

The median household income of California communities with access to AT&T’s fiber-to-the-home (FTTH) network is $94,208. This exceeds by $32,297 the $61,911 median household income for all California households in the AT&T wireline footprint.

On the other hand, the median household income of homes served only by AT&T’s 1990s legacy DSL technology is $53,186, according to the Haas Institute. The CPUC study found the same divide between haves and have nots…

Whether deliberate or not, AT&T’s investment policies have tended to favor higher-income communities, and have thus had a disproportionate impact upon the state’s lowest income areas. For example, the weighted average 2010 median annual household income for wire center serving areas that had been upgraded with fiber optic feeder facilities to support broadband services was $72,024, vs. only $60,795 for wire centers without such upgrades Using 2010 US Census data, we find a clear inverse relationship between household income and all of the principal service quality metrics.

The report leaves it up to the reader to decide if AT&T’s income-based redlining is deliberate, but makes it clear that AT&T’s financial strategy is aimed at extracting the maximum dollars possible from communities trapped in legacy monopoly systems…

Persistent disinvestment, extensive affiliate transactions at self-serving transfer prices, extraordinarily large rate increases, and deteriorating service quality all point to “harvesting” as AT&T California’s overarching strategy for its legacy services and customers…The potential gains that AT&T California can realize by raising prices and curtailing investment and maintenance expenditures far exceed any financial penalties it might suffer from persistently poor service quality.

AT&T is not alone. I found a similar pattern in Charter Communications’ investment choices. Until the CPUC forced it to do otherwise, it held low income communities captive in analog-only systems that offered limited television service at exorbitant prices.