Tag Archives: voip

AT&T blasts loopholes as it tries to escape $3.75 million fine in California

by Steve Blum • , , , ,

As expected, AT&T appealed a 3.75 million fine levied by a California Public Utilities Commission administrative law judge for “wilful disregard” of its public safety obligations. The penalty followed months of wrangling with CPUC staff over what kind of information AT&T is required to provide about services, such as 911 emergency calls, that ride on voice over Internet protocol technology (VoIP).

AT&T’s appeal dives headfirst into the minutia of how 911 service is provided now, and how it will be provided once it’s completely switched over from legacy plain old telephone service (POTS) to modern digital technology. It also twists and turns through the legal technicalities of when and how it’s supposed to keep the CPUC informed, and whether breaking a particular rule is one time thing or a continuing violation. Maybe that tactic will work. If, say, AT&T can convince commissioners, or maybe a California court down the road, that there’s a loophole that allows them to refuse to give the CPUC information about rates and terms for a particular service, then that might enough to get them off the hook.

But that won’t answer the fundamental policy question of whether the CPUC can and should regulate modern telecommunications platforms that provide similar – if not the exact same – service as old school POTS. In its appeal, AT&T did not repeat its previous Alice in Wonderland argument that telephone calls made with one kind of digital technology are a telecommunications service, while identical calls made with another kind are not. It did, however, cite a California law that expired at the end of last year that generally blocked the CPUC from regulating VoIP or other Internet protocol enabled services. As the CPUC defines its role in regulating VoIP and other de facto digital telecommunications services, AT&T and other monopoly model telco and cable incumbents will be back in Sacramento, trying to resurrect that ban.

CPUC whacks AT&T with $3.75 million fine for “wilful disregard” of public safety obligations

by Steve Blum • , , , ,

AT&T was ordered to pay a $3.75 million fine by the California Public Utilities commission for blowing off demands for information about its 911 service in 2019. Administrative law judge Karl Bemesderfer issued a “presiding officer’s decision” in a disciplinary proceeding launched last year after AT&T refused to file reports detailing its rates and terms for “next generation” 911 services that ride on Internet protocol technology, rather than old style plain old telephone service.

Besides being a sizeable slap to AT&T, the decision is a reminder that defiance of CPUC directives can be expensive. That’s something T-Mobile and Sprint might take notice of: if wrangling over informational filings is worth a fine of a few million dollars, how much does it cost to baldly merge two giant companies without permission?

The decision blasted “AT&T’s wilful disregard for the State of California’s obligation to ensure the public’s safety through oversight of the 911 system”…

We conclude that by their deliberate repeated refusals to respond appropriately to the letters from [CPUC communications division director Cynthia] Walker, their knowing misrepresentations regarding their handling of 911 traffic, and their deliberate ignoring of [a commission decision and general order], and applicable law, Respondents have engaged in conduct that merits a fine…

We conclude that Respondents’ conduct is not so egregious as to merit a maximum fine nor so excusable as to merit a minimum fine. For their repeated refusal to respond to the letters from Director Walker we find that a fine of $10,000 per day or $2.5 million is appropriate; for their misrepresentations regarding the handling of 911 traffic and their deliberate disregard of [a commission decision], we find that a fine of $5,000 a day or $1.25 million is appropriate, for a total fine of $3.75 million.

If AT&T doesn’t immediately file the necessary information, the fine will double to $7.5 million.

The decision doesn’t try to carve out new regulatory territory for the CPUC. Although the service in question is delivered via voice over Internet protocol (VoIP) technology, which the CPUC was generally barred from regulating until this year, there was an exception for 911 service.

AT&T, or anyone else with a particular interest, have until the beginning of May to file an appeal, and CPUC commissioners can request a review. Assuming AT&T appeals, as it certainly will, the fine will be put on hold until the process plays out.

Accidentally honest AT&T tells CPUC to grab the horse by the tail and face reality

by Steve Blum • , , , ,

Chp horses capitol 3feb2016

Unintentionally, an AT&T witness injected an insight of startling clarity into the debate over whether or not broadband is a common carrier service. It happened during a hearing to determine if the company should be held in contempt of California Public Utilities Commission orders. The witness was discussing the difference between legacy digital methods for transmitting telephone calls and contemporary Internet protocol technology.

He said…

It’s like the difference between a horse and buggy, and an automobile.

Just so.

That difference is one that the California legislature reckoned to be irrelevant more than 100 years ago, when it rewrote the regulations for common carrier passenger road transportation.

Today, if you want to offer point to point road transportation service in California, you need to be certified as a “passenger stage corporation” by the CPUC. Passenger stage now includes passenger buses and passenger vans, but stage is a term that goes back to Gold Rush days and beyond, when horsepower meant horses. Originally, it referred to segments of a journey. Over time, it became the name of the horse drawn vehicle being used – stagecoach turned into stage.

Transportation was undergoing the same, radical technological shift in the early decades of the twentieth century that telecommunications is today. What didn’t change was the even older concept of a common carrier service, one that was available to all at published prices and level terms.

The California legislature decided in 1917 that it’s the service that’s important, and not the underlying technology. It passed a law defining a transportation company as any person or corporation that owned or operated “any automobile, jitney bus, auto truck, stage or auto stage used in the transportation of persons or property as a common carrier for compensation over any public highway in this state between fixed termini or over a regular route”, unless it was completely within the borders of a city. The “railroad commission of the State of California” – later to become the CPUC – was “vested with power and authority to regulate every transportation company in this state”.

As we say these days, the law was technology neutral. The details of the statute have changed over the years, but the fundamental principles and terminology haven’t. Regardless of what powers the vehicle, companies carrying people and cargo for hire are providing a legally identical, common carrier service.

Horse and buggy or automobile. TDM or IP. Candlestick phone or VoIP modem. It doesn’t matter.

It’s the same service.

Internet magic means phone calls aren’t phone calls, AT&T tells CPUC

by Steve Blum • , , , ,

Alice tall 625

We’re all mad here.

On Thursday in San Francisco, AT&T defended itself against charges that it’s in contempt of California Public Utilities Commission orders and that it broke CPUC rules and state law. AT&T is admitting that California law no longer bars the CPUC from regulating Internet protocol enabled service such as voice over Internet protocol (VoIP), but doesn’t appear to be giving up the fight. Instead, it’s falling back to a second line of defence that was thoughtfully provided by the Federal Communications Commission.

The dispute centers on next generation 911 service, but it’s also the first test of the CPUC’s ability to regulate services that ride on Internet technology since the expiration of a state law that previously blocked such regulation. I sat in on the AT&T contempt hearing for a few minutes – would’ve spent more time, but that wasn’t the way my day went. It was just a brief taste, but the flavor was consistent with AT&T’s written response. Which was mostly dry arguments about who provides each piece of the increasingly complex communications path between the public and 911 answering centers, and how that maps to the equally complex web of California’s regulatory obligations and AT&T’s deliberately byzantine corporate structure. Links to AT&T’s filing and the hundreds of pages of exhibits are below.

Previously, AT&T’s defence rested, in large part, on the California legislature’s 2012 decision to bar the CPUC from regulating VoIP and similar, Internet-delivered services. No longer. Its latest response mentions that now-expired law only in passing, and in the past tense.

But AT&T prepared a fallback position. In an attachment, AT&T tries to define next generation 911 service as an “information service”, as opposed to 911 service based on legacy technology , which it admits is a “telecommunications service”. This nonsense is the result of the Federal Communications Commission’s 2017 decision to repeal network neutrality rules and declare, in Alice in Wonderland fashion, that transporting data from point A to point B via the Internet isn’t telecommunications.

AT&T jumped down that same rabbit hole by claiming, in effect, that phone calls that ride on that one, particular kind of digital transportation aren’t phone calls. Unfortunately, AT&T isn’t trying to make its case to the Queen of Hearts.

Why, sometimes I’ve believed as many as six impossible things before breakfast.

AT&T’s Response to Administrative Law Judge’s Ruling Regarding Order to Show Cause, 6 January 2020
Exhibit 1
Exhibits 2 through 8
Exhibits 9 through 15
Exhibit 16

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.

Ponderosa Telephone makes its case for blocking Comcast’s bid to cherrypick “high end” households

by Steve Blum • , , , ,

Tesoro viejo construction 25aug2019

Ponderosa Telephone shot back at Comcast’s claims that no harm would come from its proposed cherry picking of affluent households in a new, high end development outside of Fresno. In comments filed with the California Public Utilities Commission last week, Ponderosa made its case for denying Comcast permission to offer telephone service in its territory. The company argued that if the CPUC wants to change its current policy of protecting small rural telcos from competition, it should do so on a top level basis, and not on case by case requests from a major telecoms company.

Particularly if that telecoms company’s request for special treatment is “disingenuously misleading”.

California has 13 rural telephone companies that serve remote communities. Or in some cases, communities that used to be reckoned as remote, before the arrival of suburban and exurban sprawl. Rural telecoms service can be expensive – miles and miles of lines are needed to reach scattered homes and businesses. Low population density means low revenue density, so to keep telephone service affordable both the CPUC and the Federal Communications Commission back fill rural telco’s budgets with subsidies from universal service funds. To keep the tab for taxpayers as low as possible, the CPUC doesn’t allow competitive telephone companies, or big incumbents who want to exert their monopoly model might, to carve off service areas where the revenue potential is the highest and the need for subsidies is the lowest. If there’s a need at all.

That policy is under review, in a CPUC proceeding that could take years to resolve. Meanwhile, Comcast wants permission to add telephone service – it already can offer broadband and TV service – to newcomers able to afford a home in the (relatively) pricey Tesoro Viejo development, just north of Fresno. That would be costly to taxpayers, Ponderosa said…

Comcast seeks to raid the most profitable consumers in Ponderosa’s service territory. This “cherry-picking” concern by [non-carrier of last resort telcos] operating in [rural telco] territories was a factor that led the Commission to conclude that wireline competition would “leave behind residential, small business, and community anchor institution customers in more scattered and harder to serve areas of the rural carrier’s territory”; “adversely affect the bulk of the hard-to-serve and high cost customers”; and “result in the [small rural telcos] losing revenue and needing to seek a larger draw from the [California High Cost Fund rural subsidy] program.”

Abandoning, or at least substantially modifying, decades-old rural telecoms policy might be necessary, as 21st century digital services replace legacy telephone technology and business models that, in some respects, date back to the 19th century. It needs to be done thoughtfully and carefully, and not on the basis of requests for case by case special treatment by telecoms giants.

Comcast games expiring VoIP regulation ban to win CPUC permission to cherry pick suburbs

by Steve Blum • , , , ,

Tesoro viejo 25aug2019

Comcast’s sideways pleading for permission to compete against a subsidised rural telephone company demonstrates why it was wise to allow California’s ban on voice over Internet protocol (VoIP) service regulation to expire. And why Comcast, along with Charter Communications, AT&T and Frontier Communications, handed so much cash offered highly intellectual arguments to California legislators in their failed (so far) attempt to extend the ban.

Ponderosa Telephone Company offers service in the foothills and the Sierra generally north and east of Fresno. It’s one of 13 small telephone companies that serve rural California, and that depend on state and federal universal service subsidies to survive. As Fresno grows, suburban development is creeping into Ponderosa’s service territory. Tesoro Viejo is one such subdivision under construction along State Route 41, just beyond Fresno’s current development limit.

Comcast offers cable television and Internet service in Tesoro Viejo – households and disposable income are now dense enough to meet its return-on-investment objectives in an area it previously ignored. To offer phone service, though, it needs to connect its currently unregulated VoIP facilities to the traditional public telephone network. Comcast wants to do that via a legally isolated subsidiary that was specifically created to operate in that regulated environment, without creating any regulatory inconvenience for the rest of the company.

But that legally isolated subsidiary needs permission to set up shop in Ponderosa’s territory. The California Public Utilities Commission generally doesn’t allow competitors to cherry pick rural phone companies’ most lucrative customers, because it’s worried that doing so would result in ever increasing public subsidies to deliver retail service to poorer and more isolated people that don’t interest the likes of Comcast.

Nevertheless, Comcast asked for special permission to enter Ponderosa’s territory, and the CPUC is considering it. In support, Comcast is now citing the still current ban on VoIP regulation by the CPUC (it doesn’t expire until January) and disingenuously arguing that its regulated subsidiary only provides wholesale phone service, which doesn’t compete against Ponderosa’s retail offerings. The fact that its retail VoIP subsidiary would use that wholesale service to wholeheartedly compete against Ponderosa is irrelevant, Comcast’s argument goes, because it’s unregulated. At least for the present.

The CPUC has an inquiry under way that, eventually, could decide how it will protect, or not, California’s small telephone companies: should it allow competition, and the consumer benefits it brings, in affluent exurbs while spending more subsidy dollars to maintain service in communities with fewer people with less money to spend, or continue to try to maintain economic feasibility and baseline service availability, and minimise public subsidies by fencing off rural service territories?

It’s an important and timely question, not least because the telecoms industry is in the middle of a major, analog-to-digital shift. It’s the sort of technological revolution that only comes along every century or so. The answer should not come in bits and pieces, as major incumbents like Comcast (and AT&T, Charter and the rest) try to game the system with political and legal maneuvers based on irrelevant technological distinctions between otherwise identical services, and with falsehoods and evasions regarding their true intentions.

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.