BILL ANALYSIS
SB 909
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Date of Hearing: July 6, 2005
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Lloyd E. Levine, Chair
SB 909 (Escutia) - As Amended: May 9, 2005
SENATE VOTE : 22 - 13
SUBJECT : Telecommunications: video services: fair competition.
SUMMARY : This bill makes numerous findings and declarations
regarding state regulation of telecommunications and video
services. Specifically, this bill :
1)Finds and declares that technological advances are allowing
telephone corporations, satellite-direct video providers, and
commercial mobile radio service providers to compete with
cable television corporations in the provision of video
services.
2)Finds and declares that it is in the public interest to have
widespread access to multiple providers that are competing
fairly to offer video services to consumers.
3)Finds and declares that it is state policy to establish fair
competition in the areas of telecommunications and video
service.
EXISTING LAW: Finds and declares the policy for
telecommunications in California to include the removal of
barriers to open and competitive markets and promote fair
product and price competition in a way that encourages greater
efficiency, lower prices, and more consumer choice.
FISCAL EFFECT : Unknown.
COMMENTS : According to the author, the purpose of this bill is
to unify the different regulatory structures and obligations
that apply to cable and telecommunications companies that offer
video services in California.
1)Background: Current regulations of telecommunications
services are based on the type of
wire or "pipeline" used by companies to provide the service to
consumers. For example, telephone corporations providing voice
SB 909
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service over copper wires are regulated differently than cable
corporations offering video service over coaxial cable. Recent
technological developments allow voice, video, and data to be
delivered over a variety of different "pipelines." This has
resulted in cable companies offering voice service, and phone
companies offering video service as stated in the findings and
declarations contained in this bill.
2)Is there a level playing field: Existing state and federal
laws do not uniformly apply to
all providers of video service. State law requires companies
seeking a new cable television franchise in an area that is
already served by an existing cable company to serve the exact
same geographical area as the existing cable company serves.
This law was enacted at least in part to ensure that a competing
cable operator can't cherry pick the best customers and exclude
those who may not be as cost-effective to serve. Because
current law precludes a company from targeting specific
customers, very few areas with multiple cable operators
currently exist. Instead, competition for the delivery of video
service comes primarily from satellite video providers, such as
DirecTV and the DISH network which are not geographically
restricted in deployment of their services under current law.
These satellite video providers also are not required to obtain
a local franchise as other video service providers are.
Telephone corporations that wish to provide video services have
argued that they should be permitted to provide video service in
areas smaller than the franchised area of the incumbent cable
operator that mirror the telephone corporation's existing
service area.
3)Work in progress: While this bill declares the intent of the
Legislature to establish fair
competition in the areas of telecommunications and video
services, it does not specifically provide a framework for
addressing the issues raised above necessary to accomplish this
policy goal. A number of interested parties have been meeting
regularly and making significant progress towards resolving
these complicated issues. Given the related legislation
discussed below, it is the intent of the author to convene a
conference committee on the issue. This approach offers the
best opportunity for creating a level playing field for
communications providers by the end of the 2005 legislative
year.
SB 909
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4)Related Legislation: AB 903 (De La Torre) addresses the
narrow issue of whether telephone
companies should be permitted to provide video service in areas
smaller than the franchised area of the incumbent cable
operator. AB 903 was held in the Assembly Utilities and
Commerce Committee on May 2, 2005. AB 1547 (Levine) and 1735
(De La Torre) were recently amended to address the level playing
field issue. Both bills are awaiting a vote on the Senate
Floor.
REGISTERED SUPPORT / OPPOSITION :
Support
California Community Technology Policy Group (CCTPG)
Verizon
Opposition
None on file.
Analysis Prepared by : Adam Hunt / U. & C. / (916) 319-2083