BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
AB 991 - Papan Hearing
Date: June 22, 1999 A
As Amended: April 22, 1999 FISCAL B
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DESCRIPTION
This bill makes findings and declarations regarding the
benefits of high speed telephone connections.
This bill declares that it is the intent of the Legislature
that the California Public Utilities Commission (CPUC)
implement an order by the Federal Communications Commission
(FCC) regarding line sharing if such an order is issued by
January 1, 2000. If such an order is not issued by January
1, 2000, then the CPUC should expeditiously examine the
issue of line sharing and adopt appropriate rules.
This bill requires the CPUC to monitor and participate in
the FCC's proceeding examining line sharing. If the FCC
issues an order regarding line sharing, the CPUC shall
implement that order, as it determines necessary, within 90
days from the date the order is final. If the FCC does not
issue an order by January 1, 2000, then the CPUC shall
expeditiously examine the issue of line sharing and adopt
appropriate rules.
KEY QUESTION
Should the Legislature encourage line sharing in
California?
BACKGROUND
Pursuant to federal and state law and policy, the
competitors to the local telephone companies are allowed to
buy pieces of the local telephone company networks in order
to compete for the ability to provide local phone service.
This unbundling requirement is a recognition of the unique
monopoly position the incumbent local networks enjoy and
it's an effort to promote competition in the local
telecommunications service arena.
In a January oversight hearing held by the Committee, the
issue of "line sharing" was discussed at length. Line
sharing is a procedure where a single telephone line is
used, or shared, by two companies offering different
services. A telephone line is a pair of copper wires and
recent technological advances have increased the range of
frequencies which can be carried over that copper pair.
Under line sharing, two companies would effectively split
the frequencies. More concretely, several competitors to
the incumbent local telephone companies (e.g. Pacific Bell
and GTE) want to use some of the frequencies to offer high
speed telecommunications service, while allowing the
incumbent local telephone company to continue to provide
the traditional voice telephone service over different
frequencies.
One of the competitors - Covad Communications - has asked
the CPUC to require line sharing in California, but the
CPUC declined to do so, citing an inadequate record on the
technical feasibility of line sharing, as well as a
preference to defer the issue to the FCC.
In March, the FCC issued an order tentatively concluding
that line sharing is technically feasible, noting:
". . . if shared line access (i.e. line sharing)
could be made widely available, competition for
advanced services would grow more rapidly as
consumers would not be required to purchase a
second telephone line in order to have access to
high-speed digital services, and competitors
would offer advanced services to markets, such as
the residential market, where loop costs make a
stand-alone data service uneconomic. Line
sharing also holds the possibility of enabling
more providers to enter the advanced services
market and to enter the market in a manner that
enables them to incur no greater costs than the
incumbent LEC (local telephone company) or its
affiliate will incur. As a result, line sharing
should promote consumer choice."
Despite this enthusiasm, the FCC's tentative order declined
to require line sharing, citing the need for further
information on operational, pricing and other issues. The
FCC also tentatively concluded that nothing precludes
states from mandating line sharing, so states aren't
required to wait for a final FCC decision on line sharing,
which is expected by the end of the year.
COMMENTS
1.Competition . This bill is supported by a long list of
competitive telephone companies that believe it will
preserve a consumer's right to choose a local telephone
service provider and will stimulate competition among
high-speed internet service providers.
2.A substantially similar bill, SB 1066 (Bowen), was
approved 10-0 by this committee on May 11. SB 1066 is in
the Assembly Utilities and Commerce Committee, but has
yet to be set for hearing.
3.Line Sharing and Open Access . Line sharing is the
unbundling of a telephone line and conceptually, it's
identical to the notion of unbundling of high speed
Internet service from the Internet service provider (ISP)
function via a cable system. Arguably, one might expect
supporters of "open access" to high speed Internet
service via a cable system to also be supporters of "line
sharing" via a telephone line - and vice versa. However,
this theory hasn't always been borne out by the stances
of parties involved in the issues to date.
4.CPUC Suggested Amendment . The CPUC supports the bill if
it's clarified to more precisely determine when the CPUC
is required to act. To accomplish this, the CPUC
recommends that on Page 4, Line 3 the words "becomes
final" be replaced with "is published in the Federal
Register."
5.Technical Amendments . The author and Committee may wish
to make the following technical amendments:
(a) Delete Section 2 of
the bill. It is intent language which is redundant of
the language contained in Section 3, paragraph (c).
(b) Delete Section 3,
paragraph (b) of the bill. This section requires the
CPUC to monitor and participate in an FCC proceeding.
However, that proceeding will probably be completed by
January 1, 2000, the effective date of the bill. This
section is therefore unnecessary.
(c) Page 4, Line 40:
after "order" insert "as it pertains to loop access,
pricing, and cost allocation in the provision of
broadband data services over telephone lines provided
by an incumbent local exchange carrier." The FCC
proceeding will be considering line sharing as well as
other different but related issues. This amendment
narrows the requirement for expeditious enactment to
the portions of the order relating to line sharing.
This preserves the CPUC's ability to enact other parts
of the order less expeditiously or to challenge those
parts of the order unrelated to line sharing that it
doesn't agree with.
(d) Page 5, Lines 11 and
22: delete the word "data." This creates a new term
of art which adds unnecessary confusion to the already
complex lexicon of telecommunications.
ASSEMBLY VOTES
Assembly U&C Committee (7-1)
Assembly Info. Tech. Committee (5-0)
Assembly Appropriations Committee (15-2)
Assembly Floor (62-15)
POSITIONS
Support:
High Speed Internet Access Coalition (SPONSOR)
Artemis Ventures
Association for Local Telecommunications Services (ALTS)
Brainstorm Networks
Busch International
CalBUG - California Broadband Users' Group
California Public Utilities Commission
CALTEL - California Association of Competitive
Telecommunications Companies
CompTel - Competitive Telecommunications Associations
COVAD Communications Company
CPUC (if amended)
Digital Generation Systems
Direct Network Access
El Dorado Ventures
Emptor
GST Telecom, Inc.
Information Technology Association of America (ITAA)
Information Technology Ventures
Internet Service Providers Consortium (ISPC)
InterWest Partners
Matrix Partners
MCI Telecommunications Corporation
MediaFlex, Inc.
Network Associates
Northpoint Communications, Inc.
Office of Ratepayer Advocates (ORA)
Qwest Communications
Rythms NetConnections, Inc.
San Mateo County Telecommunications Authority (SAMCAT)
Zyan Communications
Paula Bailey, Antioch
Matthew Eash, San Francisco
Jean Davidson, Redwood City
Jeff & Mandy Rubin, Pleasanton
James Stevenson
L.R. Webb, Los Angeles
Oppose:
None reported to Committee.
Randy Chinn
AB 991 Analysis
Hearing Date: June 22, 1999