Industry’s VoIP bill would cripple regulators

Phone companies want to tie regulators’ hands, and SB 1161 (Padilla), now on the Governor’s desk, is the rope they hope to use.  This innocuous-sounding bill on voice-over-internet protocol (VOIP) sailed through the Legislature, propelled by the enormous lobbying clout of AT&T.  Now the ball is in the Governor’s court. After revamping the California Public Utilities Commission that was far too cozy with utility companies under his predecessor, Governor Brown should not deny his Commission tools to regulate with.

The bill’s sponsor claims SB 1161 simply re-affirms the hands-off approach the CPUC has taken to internet-based VOIP phone services.  But consumer groups, labor organizations, rural sheriffs, and media access advocates all agree that with phone companies abandoning their copper networks in favor of internet based technologies, deregulating VOIP today means total phone deregulation tomorrow.  The Governor’s signature on SB 1161 will drastically limit the Commission’s ability to respond to changes in the phone industry in the future, and eliminate numerous consumer rights and good-paying jobs at the same time.

The bill cuts a huge swath out of the CPUC’s jurisdiction prospectively, leaving it with no ability to protect consumers in even the most basic ways. The Commission could no longer enforce service quality and line maintenance standards. Service quality regulations don’t just protect customers from long waiting periods for installation and repairs, they also ensure that phone companies maintain a technical workforce able to quickly restore service after natural disasters and maintain a reliable copper network.  In the post-SB 1161 world, if a storm puts out your phone service, all bets are off.

Telecommunications services we take for granted now, including universal service obligations and quick connections to 911 in emergencies would no longer be requirements.  Rural consumers could lose service altogether, customers who can’t afford expensive bundles could be cut off and the CPUC could no longer respond to customer abuses by AT&T and the other phone companies.  

It isn’t only TURN and our allies that perceive the bill as a larger, deregulatory effort.  In New Jersey, Kentucky, Texas, Virginia and many other states, similar AT&T sponsored legislation has sparked outrage from labor and consumer groups; CWA led the successful fight to defeat an effort in New York. 

AT&T’s empty arguments about “Internet freedom” appear to be designed to provide legislators with cover; as CPUC Commissioner Mike Florio has observed, SB 1161 “has nothing to do with the Internet.”  It does have to do with the phone companies’ transition from copper wires to VOIP, a transition they hope to enhance with an end to whatever shreds of regulatory or legislative accountability still exist.  California stands to lose valuable jobs and basic consumer protections if the Governor doesn’t veto this gift to AT&T.

Ed’s Note: Mark Toney is the executive director of The Utility Reform Network, a consumer advocacy group.

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