Tag Archives: voip

Consumer rules for Californian VoIP providers, but no particular cop proposed by new draft bill

by Steve Blum • , , , ,

Twin peaks donuts

AT&T’s attempt to dodge regulation of voice over Internet protocol (VoIP) service took a turn down an unmarked legal road on Monday. Assembly bill 1366 is championed by assembly member Lorena Gonzalez (D – San Diego). As now reads, it would add rules about repair windows and bill credits for VoIP service outages to California’s business and professions code, but doesn’t specify any particular agency or method to police those requirements.

Generally, consumer laws are enforced by the consumer affairs department, or the California attorney general, or local district attorneys, or private lawsuits. I expect the enforcement mechanism will be made clearer as the bill moves toward an assembly floor vote. The one thing that seems certain – with due regard for my lack of legal credentials – is that the California Public Utilities Commission won’t be the cop on the beat.

As currently written, the bill gives the CPUC a limited role in collecting information about VoIP outages and complaints, but that appears to be mainly for statistical purposes, with the data forwarded to the attorney general and the legislature annually.

The version Gonzalez originally introduced would have extended a moratorium on state level regulation of VoIP or other “Internet protocol-enabled services”, but it ran into a human wall of labor opposition during a committee hearing last month. That union presence overpowered endorsements from a long line of representatives from vaguely connected non-profit organisations and lobbyists from AT&T, Comcast, Charter and other big telecoms companies that 1. don’t want VoIP regulated and 2. often make less-than-charitable payments to such organisations. Gonzalez promised to amend the bill, and make it more to the liking of the Communications Workers of America (CWA), the primary union representing AT&T field employees.

Theoretically, those amendments were made last week, when AB 1366 slid out of the assembly appropriations committee, which Gonzalez chairs. In reality, the changes were posted on Monday. Whether CWA or AT&T will be happy with the new version remains to be seen. The assembly has until the end of next week to act on it.

Californiia bill that might or might not regulate VoIP moves forward in secret

by Steve Blum • , , , ,

An extended ban on regulation of Internet protocol-enabled services escaped legislative limbo last week, and is moving towards a vote by the California assembly. The big question now is: what does it say? Another major broadband bill, which would have funded after school broadband access for kids who lack it, died behind closed doors in Sacramento.

Assembly bill 1366 was originally written to extend a moratorium on any attempt by the California Public Utilities Commission to regulate voice over Internet protocol (VoIP) or any other service that rides on top of a broadband connection. It’s dearly loved by lobbyists for big telcos and cable companies.

In its first hearing, in the usually AT&T-friendly assembly communications and conveyances committee, a solid wall of red t-shirt communications union members stood up to oppose AB 1366, and the bill’s author, Lorena Gonzalez (D – San Diego), and the committee chair, Miguel Santiago (D – Los Angeles), backed down immediately.

Gonzalez promised to amend the bill so that VoIP service would be regulated somehow, but not by the CPUC. So AB 1366 was sent to the powerful assembly appropriations committee, which she chairs.

On Thursday, legislative leaders met privately to decide which bills, of the hundreds that were awaiting judgement in the appropriations committees (assembly and senate), would move forward and which would be killed out of sight of the public. Not surprisingly, Gonzalez’s bill got a green light, with the terse note that it was passed “as amended”.

Those amendments were not made public before the appropriations committee vote, nor have the changes been posted to the legislature’s website since. That’s not unusual. California legislators are not subject to the same public disclosure requirements that they impose on local governments, and they take full advantage of that privilege. So we’ll have to wait until Gonzalez is ready to show her hand. That should happen in the next week or two – the assembly has an end of the month deadline to vote on AB 1366.

AB 1409 wasn’t so lucky. The appropriations committee’s verdict on it was “hold in committee”, which translate as dead on arrival. Authored by Ed Chau (D – Los Angeles), AB 1409 would have created a subsidy program to provide kids access to broadband after school, via “Wi-Fi enabled school buses or school or library Wi-Fi hot spot lending” or similar. Such “homework gap projects” would have been paid for out of rent money collected from wireless companies that lease state property and fines imposed on cable operators.

VoIP regulation promised by California lawmakers after AT&T-backed bill boomerangs

by Steve Blum • , , , ,

Feral kid boomerang

Once again, a higher power interrupted the ongoing love affair between AT&T, Comcast and friends, and the California assembly’s primary telecommunications policy committee. As with the last time, the central issue is voice over Internet protocol service, with major labor unions – particularly, the Communications Workers of America (CWA) – opposing an attempt to exempt VoIP and other “IP enabled services” from oversight by the California Public Utilities Commission.

Assembly bill 1366 would extend a 2012 law that bans the CPUC from regulating IP-delivered services. Originally, the extension was indefinite, but an amendment accepted yesterday during an assembly communications and conveyances committee hearing limits it to ten years. The law applies to services, such as VoIP or instant messaging, that ride on top of Internet connections, rather than broadband service itself.

The hearing began with the bill’s author, Lorena Gonzalez (D – San Diego), and an odd assortment of non-profit organisations using scare tactics to argue in favor of it. The implication was that if AB 1366 isn’t passed, the CPUC will make VoIP unaffordable or outlaw it altogether. Or kill the Internet. Or puppies. Or do something. Awful.

They were followed by a long line of other non-profit groups that don’t usually concern themselves with telecoms issues, but often have a history of taking money from companies that do. Such as AT&T, Comcast, Charter Communications, Verizon, T-Mobile and others, whose lobbyists also made their presence known.

Consumer and telecoms advocacy groups opposing AB 1366 followed, but it was the speaker from the CWA and the solid wall of red t-shirt clad union members that seemed to grab lawmakers’ attention. Gonzalez quickly pivoted and said she’d work with them to figure out a way to regulate VoIP, because what she’s really afraid of is that the CPUC will do nothing…

We do want to and need to ensure that…the opportunity for service and for complaints and to have this followed up on is equal, and we are going to work with CWA on addressing that situation. I mean, the folks that we’re talking about, who are currently in opposition, I talk to them every day. Obviously, I’m not doing something to oppose labor. These are the people I come from and I represent and they live in my community. We want to provide a framework by which, actually, service will improve, that we can have access to service, that we will have restoration time guaranteed. If we left that up to the PUC, we might get a restoration time 14 years from now.

Translation: if CWA doesn’t cut a deal with AT&T, we’re going to regulate VoIP.

There are two issues in play. One is whether or not to treat Internet-delivered services the same way as largely identical, regulated ones.

The other is the CPUC itself. I watched three utility-related hearings yesterday, and the CPUC’s glacially slow decisions and idiosyncratic operations were bashed by all sides in each one. Legislative attempts to disestablish the commission, or reduce its scope of authority have been increasingly common in recent years. Most failed or were trimmed back, but that was while Jerry Brown was governor. He tended to shield the CPUC and executive departments from legislative micromanagement. Gavin Newsom might not be so protective.

California legislature looks at extending moratorium on Internet services regulation

by Steve Blum • , , , ,

Internet services, such as telephone service via voice over Internet protocol (VoIP) technology, are unregulated in California. For now. Federal preemptions, or attempted preemptions, aside, the California legislature approved a seven year moratorium on regulating Internet protocol (IP) enabled services in 2012. Senate bill 1161 said the California Public Utilities Commission and all state and local agencies could not…

Enact, adopt, or enforce any law, rule, regulation, ordinance, standard, order, or other provision having the force or effect of law, that regulates VoIP or other IP enabled service, unless required or expressly delegated by federal law or expressly authorized by statute.

That ban will expire at the end of the year, unless the legislature renews it. In a gut-and-amend move on Monday, assemblywoman Lorena Gonzalez (D – San Diego) turned an obscure bill regarding the San Diego airport into a perpetual extension of SB 1661. Assembly bill 1366 takes out the sunset clause and makes a few meaningless tweaks to the language.

It leaves in place a distinction that wasn’t so obvious in 2012, but has taken on greater significance as the debate over network neutrality and whether broadband is an information or telecommunications service has intensified. The CPUC can’t regulate VoIP or other services that are built on Internet protocol technology, but SB 1161 drew a clear line between those kinds of services and the “broadband connection from the user’s location” that they ride on.

Pausing regulatory action for seven years while technology and service models matured was a good idea at the time. Trying to regulate new online services that evolved rapidly in an open market could have been disastrous for California’s high tech economy. With the benefit of that experience, though, it’s time to consider whether a blanket ban on IP services regulation is still needed. Some of that work began last year, when the California legislature passed a ground breaking data privacy law and its own version of network neutrality rules.

In particular, the carve-out for VoIP needs to closely examined. Seven years ago, VoIP service providers were fringe players. But with AT&T’s embrace of VoIP technology, not least because it’s a path to decommissioning rural copper networks and escaping regulatory oversight, that exception needs another look. Traditional, plain old telephone service – POTS – and VoIP provide virtually identical telecommunications functionality. Keeping one under the CPUC’s umbrella and not the other makes little sense.

AB 1366 will now head to the assembly’s communications and conveyances committee, which does not a have a good track record when it comes to thoughtful consideration of telecoms policy. This one needs watching.

Power to the people and back it up too

by Steve Blum • , , ,

Consumer groups are asking the Federal Communications Commission to reconsider its new rule that requires telephone companies to sell back up batteries to customers when an outside power source is required. Companies should give subscribers batteries, the groups say.

The core issue is whether carriers will be required to pay for backup batteries at users’ homes to make sure that phone service remains available during a power outage. Old style phone service – copper – was self powered and remained operational during power failures. VoIP and fiber-based systems need back up power, though.

So far, the California Public Utilities Commission has mostly gone along with what the FCC is doing, which is only requiring carriers to educate consumers about the need to buy back up batteries and info on how to do it. That was part of the Frontier settlement, for example.

Personally, I try to stay away from these issues – it’s about consumer advocacy and not about broadband deployment, which how I make my living. Arguably, putting additional requirements on carriers that want to upgrade infrastructure is counter-productive. Given the complexity/diversity of home networks, it would be very complicated at best for carriers to provide a solution that would eliminate the need for consumers to think, which is the real problem. Batteries are cheap and if it was just about money, it would be easy to solve. Also, mobile phones are already battery powered, which is one way to ensure back up/emergency capability, but to be fair that’s not a universal solution.

Layers of regulation: CPUC maintains grip on telecoms infrastructure

by Steve Blum • , , , ,

Kicking down barriers to competition, progressively.

There’s always a danger of reading too much into a single, seemingly routine decision by the California Public Utilities Commission, but I’ll risk it. Earlier this month, the CPUC granted a certificate of public convenience and necessity to Schat Communications LLC, which is a sister company of Schat.net, an Internet service provider in eastern California. In doing so, the commission determined that Schat is a “telephone corporation” under Californian law and can be regulated as such.

Schat isn’t offering traditional voice or other consumer services that the commission is allowed to regulate. Its retail offerings are all Internet protocol (IP) based – i.e. VoIP and plain vanilla Internet access – which are specifically exempted from commission oversight by state law. In technical jargon, those belong to the network layer – Layer 3 – or higher of the standard Open Systems Interconnection (OSI) model, which provides clear and globally recognised definitions of the roles and the relationship between the technologies that make digital communications possible. The CPUC did not specifically reference the OSI model, but the language it used in the Schat decision usefully parallels those definitions.

The commission endorsed Schat’s assertion that physical infrastructure – Layer 1 in the OSI model – is something completely different from what state law considers IP services, which live on Layer 3 or higher (for brevity’s sake, I’m ignoring Layer 2, arguably a grey area)…

Schat Communications’ proposed middle-mile network will consist of conduits, ducts, poles, wires, cables and other property over which Schat Communications will offer transmission services to other certificated carriers (i.e., telephone corporations) as well as to business customers. Carriers purchasing Schat Communications’ transmission will then be able to offer telephone services to their customers. As such, Schat Communications’ middle mile network will be comprised of “telephone lines” and by such offering, Schat Communications will be a “telephone corporation” pursuant to the [Public Utilities] Code.

The commission is clearly saying that Layer 1 infrastructure is still within its regulatory domain, whether or not IP-based Layer 3 services are riding on it. If it follows this line of thinking to the logical conclusion, physical plant – all the way down to last mile copper – will remain regulated, even if telecoms companies completely convert to IP technology.

More broadly, the decision bridges a 100-year philosophical divide. The modern CPUC’s roots lie in California’s early 20th century Progressive Era, which brought regulation of natural monopolies and dismemberment of purposeful ones. Cyberspace may be limitless, but the physical dimensions of our world haven’t changed. The cost and difficulty of building public utility infrastructure – the defining hurdle of a natural monopoly – remain. By establishing a clear framework, based on objective technical standards, for keeping static physical infrastructure in a traditional regulatory regime, the commission is creating neutral ground where vigorous competition and the Internet’s libertarian ethos can flourish in the 21st century.

CPUC finds a legal way to treat ISPs as regulated phone companies


CPUC sends a Schat across incumbents’ bow.

Buried in last week’s California Public Utilities Commission consent agenda was a resolution granting a certificate of public convenience and necessity (CPCN) to Schat Communications, an independent Internet servicer provider based in Bishop, on the eastern side of the Sierra Nevada. Schat applied for the CPCN in order to qualify for California Advanced Services Fund (CASF) grants for two proposed last mile projects in Mono and Inyo Counties.

CASF rules are different now, but back in February, an applicant either needed a CPCN or the mobile telephone equivalent or at least have an active application in front of the commission. Golden Bear, Bright Fiber, Surfnet and Viasat were in the same boat, with CPCN applications pending. If a telecoms company has a CPCN, it means that it is a “telephone corporation” and can be regulated as such by the CPUC.

To one extent or another, all five applications were held up as the CPUC struggled with an institutional history of regulating telephone companies rather than ISPs and a state law, passed last year that expressly forbids the CPUC from exercising control over Internet protocol services, including VoIP as well as pretty much any other broadband-based content or service.

Nearly a year later, Schat is the first one to convince the CPUC that what it does is sufficient for it to be regulated (and given CASF grants)…

Schat Communications argues that its intention to provide “middle-mile transport service” and manage a network consisting of “conduits, ducts, poles, wires, cables and other property” qualifies it as a telephone corporation, and therefore a public utility. Public Utilities Code §710 does not preclude our regulation of “non-VoIP and other non-IP enabled” services such as the middle-mile transport intended by Schat Communications. Therefore, we agree with Schat Communications that it is a telephone corporation, and therefore a public utility subject to our jurisdiction.

It’s good news for the other applicants. Even though the law has since changed, a CASF applicant with a CPCN still has considerable advantages. It also opens up some interesting questions about middle mile service providers – say, AT&T or Verizon – that are moving toward IP-based networks, partly for technical reasons but also partly to escape regulation. It might not be as easy as they seem to think.

Tellus Venture Associates assisted with several CASF proposals in the current round, including Surfnet and Bright Fiber, so I’m not a disinterested commentator. Take it for what it’s worth.