Tag Archives: sandoval

CPUC loses activist edge as Sandoval, Florio depart

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The California Public Utilities Commission lost its most consistently activist members yesterday. Commissioners Catherine Sandoval and Mike Florio announced that they would be leaving when their terms expire at the end of the month. Both were appointed six years ago as governor Jerry Brown took office. Brown did not reappoint them to a second term, though.

Sandoval is the acknowledged telecoms expert among commissioners. She teaches telecoms law at Santa Clara University and was a staffer at the Federal Commission. At one point, she was in the running – albeit as a long shot – for the FCC chair job that ultimately went to Tom Wheeler (who also announced he was stepping down yesterday).

Florio and Sandoval advocated for greater competition in California’s telecoms market and supported efforts to extend broadband connectivity into rural and low income communities. They’ve been more willing than most to buck pressure from AT&T, Verizon and cable lobbyists and, among other things, push for investigations into service and infrastructure issues that the incumbents would prefer to sweep under the carpet, and resist Comcast’s attempts to turn California into its own walled garden.

There have been times when they’ve landed on the losing end of key 3-to-2 commission votes, such as the yes we will, no we won’t endorsement fiasco surrounding common carrier status for broadband, and this summer’s attempt to hold telcos to higher disclosure standards regarding service outages. In her final, major decision yesterday, Sandoval won back some of that ground when Florio and commission president Michael Picker joined in voting yes on new outage reporting requirements that resulted from her investigation into rural telecoms reliability problems.

But more often, Florio and Sandoval have convinced one or more of their colleagues to join them in taking an activist approach to reining in the monopolist impulses of telephone and cable companies, and other public utilities. That success earned them the enmity of companies with deep pocketed lobbyists in Sacramento. Even if Brown had reappointed them, the odds were against them getting enough votes in the California senate to win confirmation.

Sandoval said she’s returning to her previous full time job as a tenured law professor at Santa Clara University, and will extend her portfolio beyond telecoms to other aspects of public utility law. Florio doesn’t have any firm plans, but won’t be end his long career as a utility regulator and consumer advocate. He promised, in his best Terminator style, “no matter when it is or in what capacity, I’ll be back“.

Commissioner Catherine Sandoval off CPUC

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Commissioner Catherine Sandoval will not be on the California Public Utilities Commission next year. Her term expires at the end of the month, and she announced during today’s CPUC meeting that she would be returning to full time work as a law professor at Santa Clara University in January. In her farewell, she spoke about the work she and other commissioners have done to extend telecoms service to some of the remotest areas of California.

How much of the net neutrality job will go to state regulators?

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Whether or not the FCC decides to regulate broadband service as a common carrier utility, new net neutrality rules will be imposed, successfully or not. State utility regulators from across the country met in San Francisco this week. The California Public Utilities Commission hosted a conference on Internet regulation, and net neutrality in particular, chaired by commissioner Catherine Sandoval, yesterday afternoon.

A national panel of economics and law professors discussed where state regulators fit in. Not surprisingly, they didn’t agree.

Early on, mobile telecoms regulation was moved nearly completely to the federal level, resulting in “massive investment”, said Charles Davidson from the New York Law School. The same thing happened with broadband and “the result has been massive investment in broadband networks” along with deployment to most parts of the country. “Congress did not contemplate an active state role vis-à-vis broadband”, he concluded.

Mobile telecoms regulation is indeed a good model to follow, said Jim Tuthill from the U.C. Berkeley School of Law. But the lesson there is that mobile telecoms already fall under common carrier rules. “There’s an important role for the states under the regulatory regime of mobile services. Title II [common carrier] regulation of cellular hasn’t hurt investment, hasn’t hurt innovation” he said. “It worked for wireless, it’ll work for broadband”.

The premise for a higher level of state and federal broadband regulation is wrong, according to Michael Katz, from the U.C. Berkeley Economics Department. The debate over network neutrality is primarily a debate over whether some companies should be able to pay for Internet fast lanes to reach customers.

“Paying for better service does not, in and of itself, constitute price discrimination”, Katz said, pointing out that telling General Motors that it could only sell Cadillacs would hurt consumers. “It’s a good thing when different firms that are competing to serve customers go out and buy more expensive inputs to better serve customers”, he said. The answer, according to Katz, is not to try to create rules that will force companies to do or not do certain things, but use existing anti-trust law on a case by case basis to swat down anti-competitive behavior when it occurs.

The FCC’s original approach, using general authority to promote broadband under another section – 706, if you’re keeping score – of federal telecoms law is the better course, according to Christopher S. Yoo from the University of Pennsylvania Law School. Otherwise, big telecoms companies will have a huge advantage in a common carrier game, because “you have to have an army of lawyers to do it”. The original approach – assuming the commission can thread its way through court rulings – works because “network neutrality is a subsidy for the edge”, which incentivises companies to develop services that will attract new users to the Internet. “The rationale is that anything that promotes usage is within the power of 706”, which puts it under state authority, Yoo said. The role of states, he said, is pushing efforts such as broadband mapping studies and data collection, implementing universal service, promoting education and usage as envisaged in the national and state broadband plans and reducing switching costs for consumers.

It was a good discussion of the different regulatory tools in states’ broadband development kit. And the more options, the better, as Sunne Wright McPeak, CEO of the California Emerging Technology Fund, told the group.

“The solution is not a silver bullet, but silver shotgun pellets”, she said.

Speech isn’t free when ISPs can set prices based on content

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FedEx doesn’t charge based on what a document says. Neither should Comcast or AT&T.

California Public Utilities Commissioner Catherine Sandoval has arguedand voted – in favor of regulating broadband infrastructure companies as common carriers, in much the same way as telephone companies, but with a “light touch”. She made her case in testimony at a congressional hearing in Sacramento in September, and later polished it and submitted it to the FCC for consideration in its network neutrality deliberations.

In doing so, Sandoval focused on the risks of allowing ISPs to make whatever deals they want – or ignore the deals they don’t – and then leaving it up to content and service companies to fight out any objections on a case by case basis at the FCC.

One of the risks she highlighted – far and away the biggest one, IMHO – is giving ISPs what amounts to a government-enforced license to regulate the content of speech…

The FCC’s proposal converts ISPs from a conduit for speech into an arbiter who gets to decide who has the fastest, cheapest, best path to reach Internet audiences. The FCC’s proposal does not limit ISPs to choosing who gets the best speeds and terms by who pays the highest price. It empowers ISPs to consider the messenger, message, method of delivering that message (peer-to-peer protocol, ftp protocol or other program or method), competitive effects on the ISP, and any other factor, as long as the FCC subsequently determined it was “commercially reasonable”…

Content-based regulations are “presumptively invalid under the First Amendment.”…“[T]he First Amendment means that government has no power to restrict expression because of its message, its ideas, its subject matter, or its content.”

Treating broadband infrastructure – like other telecoms infrastructure – as a common carrier would instead, Sandoval argues, create a transparent and consistent set of rules everyone would play by, regardless of size or political disposition.

With no BMOC, expect a different CPUC next year

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With the departure of Michael Peevey as president of the California Public Utilities Commission after 12 years on the job, the style and, almost certainly, the substance of its work will change significantly. The direction and speed of that change depends on who the governor appoints to take his place.

Judging by the other four commissioners – all Brown appointees – the new honcho is unlikely to be an ex-utility executive like Peevey. Two of the current members – Mike Florio and Carla Peterman – are alumni of TURN, which is arguably the state’s most influential utility consumer advocacy group. Catherine Sandoval is a law professor and former agency – federal and state – staffer. The newest commissioner, Michael Picker, was an aide to Jerry Brown.

If Brown decides to promote one of the four, Sandoval is the likeliest choice. She has a gold-plated resume and public agency management experience. Although she’s considered an expert in telecommunications law and regulation – she was even mentioned as a possible pick for FCC chair a couple of years ago – Sandoval has considerable experience in the energy field as well.

But even if Brown brings someone in from the outside, you can safely assume that it won’t be someone with Peevey’s Big Man on Campus persona. That style of running the commission’s business has worn a bit thin. The latest example was the bluster and apparent arm-twisting that led to the commission withdrawing its endorsement of common carrier regulation of Internet infrastructure.

For now, though, Peevey is still at the helm. His final meeting as president will be in December. It will be interesting to track whether Peevey will push to leave his imprint on key issues, like net neutrality and the Comcast-Time Warner-Charter menage, before then.