The American Independent: California Telecom Companies Push Bill to Quash Oversight on Internet Regulation

By Siddhartha Mahanta, The American Independent, September 10, 2012

California could be the latest state to enact a law that dramatically curbs regulatory oversight of telecommunications services in the state, handing a significant victory to the industry players that have lobbied for the bill’s passage.

On its face, SB 1161 seems simple enough. The text of the bill explains that it seeks only to “preserve the future of the Internet by encouraging continued investment and technological advances” and “supporting continued consumer choice.” But to achieve that, the measure would gut the regulatory authority of the California Public Utilities Commission, a key state oversight body, over many Internet-based communications technologies.

What that means: California customers would no longer have an official regulatory body to address their concerns over the quality and affordability of these new, emerging services, which would not be bound to the same consumer protections that apply to traditional, wire-based telephone systems. To date, the commission has not signaled a strong intention to regulate this growing sector of the communications industry. By preventing it from doing so in the future, critics say, SB 1161 addresses a problem—an overeager regulatory commission—that does not exist.

Consumer advocates argue that SB 1161 would bar the CPUC from keeping close tabs on big telecommunications companies like AT&T and Verizon—two of the bill’s big backers—and safeguarding customer protections. Supporters, meanwhile, say that the CPUC and any regulations it might pass will only hinder the tech industry and stymie job creation. Proponents like tech industry analyst and columnist Larry Downes say that Governor Jerry Brown should quickly sign SB 1161 into law and begin to roll back the authority of a commission whose budget has risen by $300 million over the past year.

The state assembly and senate passed the bill in late August. Now, Gov. Brown has until September 30 to decide whether to sign the measure into law....

Lobbying strength

Other states have considered or passed bills that deregulate sections of the telecommunications industry or remove obligations for phone service providers to offer basic phone service for all customers—known as “carrier-of-last-resort” obligations, or a guarantee to provide low-cost, landline based telephone service to homes. As The Washington Post has reported, several states have passed laws that remove these obligations.

In California, the telecom industry has joined forces with Silicon Valley, as Fabiola Carrion, a broadband analyst with the Progressive States Network, explains. Technology trade groups in Silicon Valley, including TechAmerica, TechNet, and the Silicon Valley Leadership Group, released a fact sheet arguing that SB 1161 would clear the road of costly regulatory hurdles. SB 1161, they say in a joint website urging Gov. Brown to sign the bill, clears the road of “protracted regulatory proceedings that create delay and unnecessary expense.”

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