California PUC Elects to Not Fully Implement Cable Legislation AB 2987

In an amazing turn of events, the California Public Utitlities Commission (regulatory agency for all utilities including telephone services state-wide) has declined to fully implement the regulatory responsibilites assigned to the CPUC agency in Califonia AB 2987 (the CA AT&T state cable franchise bill passed in Summer, 2006). Considered one of the better examples of State legislative modification of AT&T's boilerplate destruction of local cable franchising authority, now the battle begins on whether the state of California will actually "implement" the specifics of the legislation. Without the CPUC doing more than just making sure the proper franchise forms are completed, the intricate enforcement provisions may go unheaded by the phone and cable industry.

See the CPUC item regarding rulemaking to implement CA video franchise legislation AB2987 -

http://www.cpuc.ca.gov/PUBLISHED/AGENDA_DECISION/64993.htm#P183_6128

The initial outrage has begun. Jeff Perlstein, Executive Director, Media Alliance stated, "We thought CA was done with the franchising issue. Last year we worked real hard with ACM-West, NHMC and other allies to make the CA statewide franchising bill that passed as strong as possible on PEG, redlining/build out, other consumer protections, etc. We certainly didn't get all we wanted but we scored some victories and were assured of some decent provisions by Assembly Speaker Nunez, the sponsor of the bill.

However, the California PUC voted to refuse any direct oversight of the new statewide video- service franchises: meaning, the body charged with enforcement plans to not enforce any of the protections/provisions we were "guaranteed" by the Speaker. The PUC's interpretation is exactly that of AT&T, Verizon and the cable companies.

But there's more: the commissioners also decided that, unlike in all other proceedings before the PUC, consumer advocates have no right to intervene on behalf of video and broadband customers.

Simply put, we're outraged. If it stands, this was a serious bait and switch. We're not naive enough to be shocked, but we are outraged. We're gearing up to call on Assembly Speaker Nunez to amend the law or repeal it and start from scratch. Please write/call with strategic suggestions and assistance... It's heating up out here..."

In a March 1, PRNewswire-USNewswire article entitled "California Regulators Side With AT&T, Verizon and Cable Companies -- Group Calls on Speaker Nunez to Fix Video Franchise Law After PUC Rejects Oversight Role, Consumer Protections", the article sited further concerns raised by advocates of local ogvernment and other consumer interest organizations.

"In a perfunctory vote Thursday" states the article, "the State Public Utilities Commission rejected the protests of California cities and consumer groups, deciding against any direct oversight of the state's new statewide video-service franchises for phone and cable companies. The Foundation for Taxpayer and Consumer Rights called on Assembly Speaker Fabian Nunez to amend the law to provide the nondiscrimination and other protections that he said would be guaranteed. During debate over the deregulation last year, Speaker Nunez told the San Francisco Chronicle, "The driving concept behind getting this thing done ... is the consumer has the very best deal possible." Yet the PUC now states that it has no power over the franchise applications except determining whether they are "complete," said FTCR. That means commissioners refuse even to determine upfront if the application may result in technological discrimination against low-income and minority neighborhoods as new
broadband infrastructure is installed. The commissioners also decided that, unlike in all other proceedings before the PUC, consumer advocates have no right to intervene on behalf of video and broadband customers. Protests of franchising applications are not
even allowed.

"This is a rubber stamp of whatever AT&T and Verizon wish to do, including exclude low income communities from service," said Jamie Court, president of FTCR. "Under these rules the only reason an application for franchise will be denied is if a form is not complete. Consumers will have no leverage over these companies, who are not even delivering the technology they promised the Legislature in exchange for the undoing of 500 local franchises."

The PUC's interpretation of the law is exactly that of AT&T, Verizon and cable companies, said FTCR, sweeping aside the legal arguments of consumer advocates and the cities, who have lost all their former clout in controlling the misdeeds of cable companies. PUC chief Michael Peevey even specifically warned cities not to delay issuing permits for AT&T and Verizon to tear up streets and install large utility boxes in neighborhoods.

Nunez sponsored the bill last year at the behest of AT&T. AT&T and Verizon together spent at least $24 million lobbying for the measure, known as the Digital Infrastructure and Video Competition Act.

"The commissioners have embraced the phone companies' arguments that the
PUC is a powerless functionary, not a regulatory body," said Judy Dugan, research director of FTCR. "Nunez and the Legislature owe Californians a law that restores some balance between corporate freedom and protection of customers' rights."