BILL ANALYSIS                                                                                                                                                                                                                   1
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             SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
                            DEBRA BOWEN, CHAIRWOMAN
          

          SB 1563 -  Polanco                                Hearing  
          Date:  April 23, 2002                S
          As Amended:  April 22, 2002             FISCAL           B

                                                                       
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                                   DESCRIPTION
           
           Current law  articulates California's telecommunications  
          policies.  These policies include universal service,  
          encouraging the ubiquitous availability of a wide choice of  
          state-of-the-art telecommunications services, and adequate  
          investment in telecommunications infrastructure.

           This bill  adds to those policies by:
           
          1)Specifically articulating a desire to bridge the "digital  
            divide."
          2)Making explicit a policy of encouraging fair treatment of  
            consumers by providing them with necessary information,  
            establishing reasonable service quality standards, and  
            creating processes to resolve billing and service  
            problems.
          3)Substituting a desire to "promote a level playing field"  
            for the current policy of "avoiding anti-competitive  
            conduct."

           This bill  also requires the California Public Utilities  
          Commission (CPUC) to convene a proceeding to develop a plan  
          for encouraging the ubiquitous availability of advanced  
          telecommunications infrastructure, and to report back to  
          the Legislature by February 1, 2004.












                                         BACKGROUND
                
               California's telecommunications policy has a long history  
               of promoting universal service and consumer-friendly  
               practices.  Over the last several years, there's been  
               increasing interest in the telecommunications  
               infrastructure and the availability of advanced  
               communications service, due to a recognition of the  
               "digital divide" issue and the positive effects that  
               advanced communications infrastructure can have on the  
               economic development prospects of a region.  

               Recent legislation has focused on having the CPUC  
               re-examine universal service in the context of expanding  
               the types of services it encompasses.  Each time the CPUC,  
               after discussions with service providers and customers,  
               declined to expand the scope of services, citing cost  
               issues.  The CPUC's latest examination is due imminently,  
               but some observers don't believe the CPUC will reach  
               conclusions that are any different from its prior  
               conclusions.

               The CPUC has long established service quality standards for  
               traditional telephone service.  These standards are  
               articulated in General Order No. 133 and include  
               measurements of delays in installing new telephone lines,  
               customer reports of service dissatisfaction, and time to  
               answer directory assistance calls.  Last year, the CPUC  
               opened a proceeding to establish consumer protection rules  
               for telecommunications services (Order Instituting  
               Rulemaking 00-02-004).  The basis for those rules are six  
               policies: 1) product information disclosure, 2) customer  
               choice, 3) privacy, 4) public participation, 5) oversight  
               and enforcement, 6) accurate bills and redress.  Those  
               rules are due to be released in the near future.  In  
               addition, the CPUC responds to specific circumstances where  
               service quality or customer service issues arise, such as  
               individual customer complaints or customer-classwide  
               deceptive sales practices allegations.  In the context of  
               its current review of the regulatory framework for Pacific  
               Bell and Verizon, the CPUC also required extensive customer  
               surveys of service quality.

                                          COMMENTS










           
           1.Digital Divide  .  The bill explicitly adds to the state's  
            telecommunications policies the goal of bridging the  
            "digital divide," which refers to the unequal degree of  
            access to computer and communications capabilities  
            throughout society and the impact of such inequality on  
            the quality of life for those individuals and  
            communities.  The CPUC has already taken some steps to  
            address the issue, notably the creation of the California  
            Teleconnect Fund.

           2.Level That Playing Field  .  The author's rationale for  
            replacing the concept of "avoidance of anticompetitive  
            conduct" with "promote a level playing field among  
            providers" is that anticompetitive conduct is already  
            illegal, so a policy statement on avoiding  
            anticompetitive conduct is redundant.  Promoting a level  
            (regulatory) playing field encompasses the concept of  
            avoiding anticompetitive behavior, but more importantly,  
            it's also a broader statement aimed at requiring  
            regulatory fairness.

           3.Definition of Universal Service  .  Previous bills before  
            the Legislature asked or required the CPUC to consider  
            expanding the universal service definition, which the  
            CPUC declined to do.  This bill takes a different tact by  
            asking the CPUC to develop a plan which encourages the  
            deployment of advanced communications infrastructure, and  
            report such a plan back to the Legislature by February 1,  
            2004.  The bill specifically requires the CPUC to include  
            a broad cross section of interests, including those  
            service providers which are not regulated by the CPUC, in  
            developing the plan.
           
          4.Prior Legislation  .  AB 1289 (Moore), Chapter 1274,  
            Statutes of 1993, required the CPUC to consider 1)  
            broadening the list of services included within the  
            universal service definition, and 2) how to encourage the  
            deployment of advanced communications infrastructure.

            SB 2150 (Peace), Chapter 266, Statutes of 1998 required  
            the CPUC to consider whether the regulatory structure  
            encourages companies to provide high-speed communications  
            services.











                 SB 1712 (Polanco), Chapter 943, Statutes of 2000,  
                 encouraged the CPUC to consider redefining universal  
                 telephone service to include video and data services and  
                 to promote equity of access to such services.

                                         POSITIONS
                
                Sponsor:
                
               Author

               Support:
                
               None on file

                Oppose:
                
               None on file

               





















               Randy Chinn 
               SB 1563 Analysis










          Hearing Date:  April 23, 2002