Consumer groups seek veto of Internet phone service measure


SACRAMENTO — Consumer groups are trying to kill legislation that they say may lead to the elimination of most telephone regulation in California.

Last month, the Legislature overwhelmingly approved a bill to eliminate all oversight of Internet phone service in California. Proponents, led by Silicon Valley companies, assured lawmakers that it would not affect old-fashioned, copper-wire telephone service still regulated by the California Public Utilities Commission.

Now the consumer groups are urging Gov. Jerry Brown to veto the bill, saying the nation’s big phone companies, including AT&T; Inc. and Verizon Communications Inc., are pressuring Washington to phase out the copper-wire-and-switches “legacy” phone service altogether.


The result, they complained to the Legislature and now to the governor, may be that California residential and business phone customers could be left without protections that guarantee universal service, transmission quality and understandable billing that long have been enforced by the PUC.

As recent proof of the phone companies’ intentions, the consumer groups cite an Aug. 30 memo from phone giant AT&T; to the Federal Communications Commission.

The memo asked the federal government to “facilitate migration of customers from legacy to [Internet] services and to prevent customers that procrastinate or fail to migrate from holding up the transition.”

But once that happens, activists warn, phone customers may be left with little federal or state government assistance in dealing with California’s deteriorating traditional phone system.

The FCC’s current policy is to “monitor” the transition of phone service from legacy networks to the Internet and to pass regulations as needed to ensure that users have access to emergency and other services, the agency said.

“The FCC has made it a priority to promote the transition to next-generation broadband networks — which can provide significant consumer benefits and increase innovation and investment — while ensuring consumers and competition are protected as technologies change,” agency spokesman Mark Wigfield said.

AT&T;’s letter to the FCC “clearly says it wants to get rid of carrier-of-last resort and discontinue services in rural areas or any other place they want,” said Mark Toney, executive director of the Utility Reform Network, or TURN, which lobbies for better telephone service for ratepayers. “They want to eliminate all regulation that tells them to do anything.”

Proponents of the bill, SB 1161, by state Sen. Alex Padilla (D-Pacoima), dismissed the consumer groups’ complaints as meritless.

Robert Callahan, the California state director of TechAmerica, a trade group, said critics offered only “sky-is-falling, Chicken-Little” arguments.

Supporters pushed the bill because tech companies need “certainty” that the state won’t regulate the Internet and create a disincentive for them to continue to invest in innovative communications technologies that provide constantly upgraded features for carrying both voice and high-speed data signals.

“Similar bills have passed in dozens of other states, and none of the catastrophic things have happened” that opponents are complaining about, Callahan said.

Padilla, who has contended that passage of his bill would prevent tech companies from leaving the state, could not be reached for comment on his opponents’ veto request. The governor and his staff have been gathering information on the Padilla bill, but Brown, who has until the end of the month to sign or veto the measure, has yet to make a decision, his office said.

But Toney at TURN said the FCC filing and the California bill, taken together, are evidence that “the large telephone companies have not bothered to hide their true ambitions: They wish to allow their copper networks to deteriorate, force urban business and residential telephone companies to move to ... [Internet] networks and push rural customers to wireless service.”

The letter from AT&T; Senior Vice President Robert W. Quinn Jr. asked federal regulators to set a “date certain” for abandoning the old phone circuits and to assert that U.S. law trumps any efforts by state agencies, such as the PUC, to require the old lines be maintained.

The governor’s signature on the Padilla bill would lead to “the old system being completely abandoned — all the copper lines,” and state regulators “would have no ability to enforce the law” on requiring universal service, signal quality or other consumer protections, warned Lenny Goldberg, a lobbyist who led the opposition to the bill.

The move to an all-Internet voice-and-data communications system is inevitable, and the FCC is developing a National Broadband Plan to make the transition as efficient as possible, Quinn said. “I don’t think anyone would argue that [the legacy phone system] will be here forever.”

Verizon Chief Financial Officer Fran Shammo recently told analysts that his company is “moving as quickly as it possibly can to shutting down ... copper” and “being as aggressive as we possibly can in those areas.”