Consumer Federation of California

Why has a seemingly innocuous bill, SB 1161(Padilla) attracted the support of some of the biggest corporations on the planet, as well as vociferous opposition from consumer, labor and economic justice organizations? According to supporters, SB 1161 doesn’t really do anything new; it just ‘affirms’ existing laws.

Fortunately, that’s the kind of deception that withers in the light of day.

SB 1161 is actually the most anti-consumer bill ever introduced in California because it permits the telecom industry to dictate the terms of its own regulation, or as the case would have it, deregulation.

The impact of SB 1161 goes far beyond its stated goal of protecting the Internet and fostering innovation and job creation in California’s high tech industry.  In fact, the bill has nothing to do with the internet.  What the bill does is eliminate minimum standards for all telephone services that utilize VOIP (voice over internet protocol) or IP-enabled networks (internet protocol) – which have nothing to do with the Internet.  Its real impact will be in tying regulators’ hands. In a few years, when the telecom industry completes its transition to VOIP phone service, the California Public Utilities Commission (CPUC) will lose authority over all telecom, and consumers like you and me will lose all our rights.

Minimum standards for public safety would disappear immediately for VOIP providers if SB 1161 were enacted. Emergency 911 calls during a power outage will be compromised for the 2.3 million current VOIP phone customers because VOIP providers would no longer be required by to provide basic disclosures relating to emergency calls and power outages.  VOIP providers would no longer be subject to CPUC safety rules governing pole attachments, or be held accountable for dangerously overloading poles, a major cause of wildfires. Phone service for rural customers is jeopardized if VOIP providers are exempt from obligations to provide affordable service to every customer in a service area as a Carrier of Last Resort.

In the near future, service quality for all 10 million California telephone customers will deteriorate as traditional telephone companies redefine themselves as VOIP providers to escape CPUC standards for line maintenance, service restoration and reliability.  No agency would be able to prevent VOIP providers from favoring customers in high’income areas and redlining customers in rural or low’income communities.  California customers will lose fair billing and collection rights, protections against unauthorized charges, and the ability to file a complaint and have it resolved by the CPUC.

The argument AT&T’s lobbyists are trying to sell in the Capitol, that this bill is needed to liberate the Internet from CPUC regulation, is ridiculous.  The CPUC doesn’t, and couldn’t, regulate the Internet.  And you need look no further that the telecom companies’ own advertising to affirm that the majority of their services have nothing to do with the Internet:

    ‘AT&T U-verse Voice service is provided over AT&T’s world-class managed network and not the public Internet.’

    ‘FiOS Digital Voice’is not the same as the services you get with a little Internet adapter for your modem and phone, and it does not ever touch the public Internet.

    Comcast keeps the calls on their private broadband network until our switch delivers the call on the PSTN (public switched telephone network).

California is only the latest battleground in a state’by’state campaign launched by AT&T, Verizon, Comcast, and Time’Warner that has been successful in protecting VOIP providers from regulation in 20 states, paving the way for the decimation of state regulation of phone service.  The telecom industry has employed nearly identical tactics in every state in which they have sought this extraordinary protection, i.e., insider lobbying combined with campaign contributions, sneak attacks to avoid public debate by rushing legislation, and promises of jobs, jobs, and more jobs.

SB 1161 is a sneaky way for the telecom industry to insure the elimination of future regulation and minimum standards, under the guise of protecting the Internet.  As more and more policy makers wake up to the fact that VOIP telephone services are not the same thing as the Internet, the more difficult it will be for SB 1161 to prevail.

Mark Toney is executive director of TURN, a member of the Coalition for Universal Service, which includes over 60 organizations including Communications Workers of America, AARP, National Hispanic Media Coalition, Free Press, the Consumer Federation of California and Greenlining.