Telephone deregulation bill amended by California senate committee, but it’s still a hot mess

by Steve Blum • , , , ,

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.