California Legislators Put State Telecom Regulator in Crosshairs

Assembly appropriators added the IP transition bill Wednesday to the committee’s “suspense file,” a laundry list of bills costing more than $150,000. The committee will decide Friday whether the suspense bills will move to the Assembly floor. The IP transition bill (AB-2395) aims to move the state to an all-digital future, but at a hearing about Frontier Communications outages, CPUC Executive Director Tim Sullivan said legislation has reduced CPUC authority over IP services and the FCC hasn't been clear on state authority (see 1605190017). “The commission has very little authority over VoIP telecommunications service, it has virtually no authority over Internet, and has very limited authority over video services,” he said. “There is very little authority left to the states to regulate advanced communications services because of the shifting technology that has moved to digital services.”

The Utility Reform Network (TURN) disagreed that CPUC lacks authority over IP-based services. Under existing California law, the CPUC has “an obligation, along with the FCC, to basically use any means at their disposal to advance the deployment of advanced services,” said TURN Telecom Policy Director Regina Costa in an interview. She acknowledged the state authority question isn’t “cut and dried,” with debates happening across several states. “The states are dancing around this because they don’t want to go too far, but it’s also pretty clear that they do have a role to play.”

The committee also plans to decide Friday whether to greenlight a constitutional amendment (ACA-11) that would dissolve the CPUC and require the legislature to restructure the body or reassign many of its duties to other agencies. Chairman Mike Gatto (D) of the Assembly’s Commerce Committee sponsored the amendment and his committee approved it last month by a 12-1 vote. As a constitutional amendment, it requires two-thirds approval by both houses of the Legislature, then a ballot vote by Californians in November. The CPUC has no position, said a commission spokeswoman.

“In the over one hundred years since [the CPUC's] establishment, the industries under the oversight of the commission have grown and evolved in ways that have rendered the current structure of the commission inefficient and obsolete, leaving Californians without the oversight and regulatory protections that we need,” said the text of ACA-11. The CPUC has failed to protect the public while telephone and other utility rates have risen, while also suffering from “ethical lapses, notably the failure to report ex parte communications, and the closeness of commission personnel to the entities they are supposed to regulate,” it said. “The people of California would be better served with more nimble, focused, and specialized regulators, whose actions would result in far greater accountability.”

Gatto lashed into the CPUC at the Frontier hearing last week, saying the telco’s transition failures supported a rethink of telecom oversight in California. “Does this just underscore the need to maybe separate some of the regulatory duties in the state of California and to maybe give them to the Department of Consumer Affairs or somebody who is more adept with daily interactions with consumers to help consumers find justice, as opposed to an agency that is tasked with overseeing everything from gas pipelines to hot air balloons?” he asked.

The CPUC needs reform but shouldn’t be demolished, said Costa. "Within the CPUC there are also very highly competent, dedicated, smart people who work very hard on these issues and they need to be given support,” she said. “What we need is a CPUC that does its job.” The Gatto amendment would significantly change how the state regulates telecom, said Tellus Venture Associates President Steve Blum in a blog post last week. Tellus consults on developing community broadband systems. “The choice is whether public utilities should be regulated by a single, permanent, semi-independent agency or by regular state government departments managed by the governor, with specific powers, responsibilities and budget determined by the legislature, potentially on a year to year basis.”

AT&T Defends IP Transition Bill

AT&T backed AB-2395 at Wednesday’s appropriations hearing amid a flurry of concerns raised by legislators, TURN and the Communications Workers of America. The bill’s sponsor, Assemblyman Evan Low (D), waived presentation rights and didn’t appear at the hearing, which left a single AT&T lobbyist to defend the measure. Two legislators questioned the wisdom of providing only 120 days for the CPUC to investigate cases where consumers say no alternative service is available. Costa told the committee the CPUC doesn’t have the resources to respond so quickly.

Telcos will do most of the work upfront checking that copper customers have alternatives available when service is discontinued, and the CPUC would merely administer the process, AT&T lobbyist Matt Moretti said at the live-streamed hearing. “They don’t have to investigate. That’s already been done. And we’re not likely to turn in information that someone has an alternative but they don’t, because we’re just going to get told no and we can’t move on with that service.”

But Assembly member Bill Quirk (D) questioned that process. “My main concern is there’s no way for the PUC to do a check. All the information is information you have. All they can really check is that your paperwork is in order.” It would be simpler to leave CPUC out of it and require AT&T to guarantee service, he said. “If … you turn off POTS [plain old telephone service] and you find out somebody doesn’t have service, then you’re going to have to find a way to get it to them.” Otherwise, Quirk supported the bill. He compared requiring copper to mandating that “buggy whips should be continued to be manufactured.”