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.
“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.
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.
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.
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.
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.
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 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.
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.
Deregulation of telephone service – and with it, telecommunications infrastructure – moved ahead yesterday in the California senate’s energy, utilities and communications committee. Backed by AT&T, Frontier Communications, Comcast and other monopoly model incumbents, assembly bill 1366 was approved on a largely positive, but not quite unanimous vote. It extends a ban on regulation of voice over Internet protocol service (VoIP) by the California Public Utilities Commission and other state agencies. As the shift from old style, regulated telephone service to unregulated VoIP continues, the effect is to allow telcos and cable companies to back out from under the CPUC’s jurisdiction.
That’s a clearly stated goal of the bill’s author, assemblymember Lorena Gonzalez (D – San Diego) who told the committee “we’ve got to figure out a better way than just handing something to the PUC, which would take ten years to get the kind of progress we’re making right now with this bill”.
AB 1366 was amended, but I don’t know exactly what those amendments are yet. Printed copies were given to committee members just before the bill was taken up. It appears that the changes are largely in line with recommendations in an earlier analysis by committee staff and will, to some degree, allow VoIP regulation in regards emergency services and “last resort” rural services.
Judging from the discussion, though, the bill is still confusing and contradictory, with drafting errors, loopholes and a vague and largely useless enforcement mechanism. Gonzalez said that more changes would be made later.
Gonzalez and a couple of representatives from non-profit groups (who demonstrated no particular telecommunications policy involvement or knowledge) spoke in favor of the bill. They were followed by long line of similarly irrelevant endorsers, led by AT&T staff lobbyist Bill Devine, and joined by lobbyists for Frontier, Comcast, Cox Communications, CTIA and Verizon.
Then came the opposition.
A representative from the Communications Workers of America, AT&T’s principal union, repeated arguments made in the assembly. CPUC commissioner Martha Guzman Aceves then made the case for keeping the commission in the game…
We know that millions of Californians do not benefit from any competition in the communications marketplace, that hundreds of thousands have no high speed broadband access, and a third of Californians – 13 million approximately – do not benefit from any competition. This is an oligopoly, it’s not a free market. This bill prohibits the state from guaranteeing essential and reliable communications services to all Californians, simply because the infrastructure has been upgraded. It will eliminate programs to insure infrastructure access to rural Californians, to the deaf, to the disabled and to the poor…
The bill is not about stifling innovation or apps like Skype. This bill is about deregulating the companies that own and manage the poles, wires and radios in California. Companies like Comcast and AT&T, not these apps. Under this bill, these companies will be left to their own sense of social responsibility…
They’ll decide which communities receive the next generation of technologies, like fiber, like 5G…they’ll decide whether or how quickly infrastructure is repaired or upgraded in poor communities and rural communities. They’ll decide whether they address complaints from local governments and your constituents…They will decide whether the service they provide is reliable and redundant so all Californians can reach 911 dispatchers at all times.
The next stop for AB 1366 is the senate appropriations committee, where more amendments might surface. That might not happen until the end of August. If it survives, it’ll go to a vote by the full senate. Labor organisations are strongly opposed to the bill, a fact that made Gonzalez visibly uncomfortable. If that opposition continues, all bets are off on AB 1366’s future.
A bill that would extend California’s ban on regulation of “Internet protocol enabled” services, including voice over Internet protocol (VoIP) service, is due for a hearing in the California senate’s energy, utilities and communications committee today. Assembly bill 1366, authored by Lorena Gonzalez (D – San Diego), would allow AT&T, Frontier Communications, Comcast, Charter Communications and other big, monopoly model incumbents to do an end run around California’s laws, according to the California Public Utilities Commission.
The current text of AB 1366 extends a ban on oversight by the California Public Utilities Commission of telephone service provided via Internet protocol technology. When first enacted, this ban made sense and had little practical effect, because “Voice over Internet protocol” (VoIP) service was in its infancy. The child has grown up, though, and VoIP is a fully mature service that is rapidly supplanting traditional, and traditionally regulated, analog telephone service.
There might be good arguments for ending state oversight of telephone service. We do not support that position, but it is an appropriate subject for debate and deliberation by the California Legislature. Such a drastic change in California policy should not be enacted through a back door maneuver, as AB 1366 would do.
As of this morning, the version of the bill approved by the California assembly is still on the table. It includes token amendments made in the assembly that have vague language about VoIP service quality, but are of little practical use. The senate committee’s staff prepared an analysis that confirms that the token amendments in the bill “are largely unenforceable”. The analysis proposes a few more marginal changes, but leaves the core of the bill – as pushed by AT&T, Frontier, Comcast, Charter and a long list of their financially groomed, um, friends – intact.
The amendment came in response to strong opposition from the Communications Workers of America, the primary union representing AT&T employees. They are still listed as opposing AB 1366. The key test today will be whether or not CWA members turn out to oppose the bill, as they did in the assembly’s communications and conveyances committee.
Update: AB 1366 will be heard in the senate energy, utilities and communications the week after next (h/t to Adam Bender at Communications Daily for the heads up).
Assembly bill 1366 will block modernisation of California’s telecommunications grid and allow telephone and cable companies “to disregard California laws”, according to a position paper unanimously adopted by the California Public Utilities Commission yesterday. The commission’s opposition comes ahead of a California senate hearing on the bill scheduled for the week after next.
As first pushed by AT&T and authored by assemblywoman Lorena Gonzalez (D – San Diego), AB 1366 would have simply extended an existing ban on any regulation of “Internet protocol enabled” services by the CPUC or other state agencies. That restriction took effect in 2013 in order to give Internet-based services such as voice over Internet protocol telephone service a chance to develop in a competitive marketplace. At yesterday’s meeting, commissioner Clifford Rechtschaffen said it’s a different world now…
The original purpose of this bill has been more than fulfilled. VoIP was a nascent technology [when the ban was proposed], it is now a dominant technology and is going to overtake and replace landlines, and the services it provides are indistinguishable from those of traditional landline service. So, extending the bill now would be a barrier to consumer protections and our ability to protect public safety during emergencies. We can provide this regulation without, in any way, undermining competition.
That’s assuming competition exists. The CPUC’s concern isn’t the wide range of messaging, social media and other services that ride on the Internet. It’s about the replacement of regulated, old school copper-based telephone services with unregulated VoIP technology, as AT&T is aggressively doing. Commissioner Martha Guzman Aceves said a “point that is raised often by the industry is competition is the solution to service quality. Unfortunately, we also know that the majority of Californians do not have competition”.