BILL ANALYSIS                                                                                                                                                                                                    



                                                                       


           ------------------------------------------------------------ 
          |SENATE RULES COMMITTEE            |                  SB 1563|
          |Office of Senate Floor Analyses   |                         |
          |1020 N Street, Suite 524          |                         |
          |(916) 445-6614         Fax: (916) |                         |
          |327-4478                          |                         |
           ------------------------------------------------------------ 
           
                                         
                                 THIRD READING


          Bill No:  SB 1563
          Author:   Polanco (D)
          Amended:  5/20/02
          Vote:     21

           
           SENATE ENERGY, U.&C. COMMITTEE  :  8-0, 4/23/02
          AYES:  Bowen, Morrow, Alarcon, Battin, Murray, Sher,  
            Speier, Vincent

           SENATE APPROPRIATIONS COMMITTEE  :  9-1, 5/13/02
          AYES:  Alpert, Bowen, Burton, Escutia, Karnette, McPherson,  
            Murray, Perata, Speier
          NOES:  Johnson


           SUBJECT  :    Telecommunications:  services

           SOURCE  :     Author


           DIGEST  :    This bill requires the State Public Utilities  
          Commission to, by February 1, 2004, submit a report to the  
          Governor and Legislature identifying where  
          telecommunications infrastructure is inadequate, and  
          recommending strategies for encouraging investment in  
          infrastructure, as specified.

           ANALYSIS  :    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.
                                                           CONTINUED





                                                               SB 1563
                                                                Page  
          2


          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.

          This bill also requires the State Public Utilities  
          Commission (PUC) 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 PUC reexamine  
          universal service in the context of expanding the types of  
          services it encompasses.  Each time the PUC, after  
          discussions with service providers and customers, declined  
          to expand the scope of services, citing cost issues.  The  
          PUC's latest examination is due imminently, but some  
          observers don't believe the PUC will reach conclusions that  
          are any different from its prior conclusions.

          The PUC 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  







                                                               SB 1563
                                                                Page  
          3

          answer directory assistance calls.  Last year, the PUC  
          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:  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 PUC 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 PUC 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 PUC has already taken some steps to  
            address the issue, notably the creation of the California  
            Teleconnect Fund.

           2.Definition of Universal Service  .  Previous bills before  
            the Legislature asked or required the PUC to consider  
            expanding the universal service definition, which the PUC  
            declined to do.  This bill takes a different tact by  
            asking the PUC 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 PUC to include  
            a broad cross section of interests, including those  
            service providers which are not regulated by the PUC, in  
            developing the plan.

           3.Prior Legislation  .  AB 1289 (Moore), Chapter 1274,  
            Statutes of 1993, required the PUC to consider 1)  
            broadening the list of services included within the  
            universal service definition, and 2) how to encourage the  







                                                               SB 1563
                                                                Page  
          4

            deployment of advanced communications infrastructure.

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

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

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          NC:kb  5/21/02   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED

                                ****  END  ****