Governor Brown vetoes two telecom bills

by Marc Lifsher, Los Angeles Times

Two pieces of legislation, heavily backed by the telecommunications industry but opposed by state regulators, were vetoed Thursday by Governor Jerry Brown.

One dealt with fees related to the purchase of prepaid cellphone minutes. The bill, AB 300 by Assemblyman Henry T. Perea (D-Fresno), would have created a new system for retailers to collect the fees from purchasers. As approved by the Legislature, the money would be sent to the Board of Equalization and then passed to the California Public Utilities Commission.

Currently, the PUC has required — sometimes by filing lawsuits — that the prepaid services, such as TracFone Wireless Inc., send fees on intrastate calls directly to the commission.

“There is no question that the state needs an effective system for capturing local taxes related to the sale of prepaid phones,” Brown wrote in his veto message. “The solution, however, proposed by this bill is duplicative, complex and will result in significant and unnecessary costs to the state.”

Brown also vetoed AB 1409 by Assemblyman Steven Bradford (D-Gardena.) It would have limited some of the PUC’s powers to adopt new rules for the LifeLine subsidized phone service program provided by cable companies. The PUC is in the process of writing rules to give low-income participants the option of using cellphones and Internet phones as part of the program.

Brown noted that the PUC “has taken public comment from hundreds of California citizens” and that the process should be allowed to continue. “While I am sensitive to the concerns of some in the cable industry about the length of time this process has taken,” Brown said, “I prefer to give the public process a chance to be completed before I decide whether legislation of this type is needed.”