Internet phone service bill advances in California Senate

SACRAMENTO — A controversial bill that would ban state agencies from regulating telephones that use Internet connections passed a state Senate committee after the measure’s author accepted amendments that would strengthen some consumer protections.

The proposal by Sen. Alex Padilla (D-Pacoima) is backed by AT&T Inc., Verizon Communications Inc., and cable and high-tech companies. They contend they need “certainty” that the California Public Utilities Commission will not try to oversee the Internet and phone companies that transmit voice signals over fiber optic lines.

AT&T was the fifth-largest contributor to Padilla’s campaign coffers with $23,900 from 2007 through 2010, according to nonpartisan political data firm In all, Padilla received $69,644 from telecommunications services and equipment interests during that period.

The suggested amendments, presented by Padilla at a hearing Thursday of the Senate Appropriations Committee, are designed to assuage the fears of PUC members that they’ll be stripped of the few powers they still have to protect voice-over-Internet telephone customers.

The new wording, which has not been legally drafted, ensures that Padilla’s bill “will not be misinterpreted as going back on any existing consumer protection,” he said. No changes will occur to laws that require telephone companies to guarantee service anywhere in California, provide subsidized basic services to low-income customers and maintain a 911 emergency network. The latest proposal also would empower PUC staff to take informal actions to resolve consumer complaints about voice-over-Internet billing or quality problems, Padilla said.

At the same time, the legislation, SB 1161, is aimed at quelling concerns at high-tech companies that the PUC at some point might end its light-handed attitude toward voice-over-Internet phones as well as the Internet.

“We want to continue to foster innovation and enhancement of service,” the senator said.

PUC members, meeting in San Francisco at the same time that Padilla’s bill was being debated in Sacramento, said they wanted to work with the Legislature to craft a compromise.

The proposed amendments, said Commissioner Catherine Sandoval, “are a great step in the right direction, but we need to go further.”

Another commissioner, Mark Ferron, said he respected Padilla’s good faith in writing the bill but questioned whether “SB 1161 is a solution in search of a problem.”