BILL ANALYSIS
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THIRD READING
Bill No: AB 991
Author: Papan (D)
Amended: 8/16/99 in Senate
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 11-0, 6/22/99
AYES: Bowen, Alarcon, Baca, Brulte, Hughes, Kelley,
Mountjoy, Peace, Solis, Speier, Vasconcellos
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 62-15, 5/27/99 - See last page for vote
SUBJECT : Internet access: line sharing
SOURCE : High Speed Internet Access Coalition
DIGEST : This bill states legislative intent and requires
the California Public Utilities Commission to monitor and
participate in the Federal Communication Commission's
proceeding examining line sharing, and to implement rules,
as specified.
Senate Floor Amendments of 8/16/99 clarify that action by
the California Public Utilities Commission is triggered by
a federal decision which is published in the Federal
Register, rather than the more ambiguous date at which the
federal decision becomes "final".
ANALYSIS : Pursuant to federal and state law and policy,
the competitors to the local telephone companies are
CONTINUED
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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 Senate Energy,
Utilities and Communications 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
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(local telephone company) or its affiliate will incur. As
a result, line sharing should promote consumer choice."
Despite this enthusiasm, the Federal Communication
Commission'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.
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 CPUC implement an order by the FCC regarding line
sharing if such an order is issued by January 1, 2000.
This bill declares legislative intent that, 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 appropriate, within
90 days from the date that the rules adopted by that order
are published in the Federal Register. 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.
Comments
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.
Line Sharing and Open Access . Line sharing is the
unbundling of a telephone line and conceptually, it is
identical to the notion of unbundling of high speed
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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.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/16/99)
High Speed Internet Access Coalition (source)
Artemis Ventures
Association for Local Telecommunications Services
Brainstorm Networks
Busch International
California Broadband Users' Group
California Public Utilities Commission
California Association of Competitive Telecommunications
Companies
Competitive Telecommunications Associations
COVAD Communications Company
California Public Utilities Commission
Digital Generation Systems
Direct Network Access
El Dorado Ventures
Emptor
GST Telecom, Inc.
Information Technology Association of America
Information Technology Ventures
Internet Service Providers Consortium
InterWest Partners
Matrix Partners
MCI Telecommunications Corporation
MediaFlex, Inc.
Network Associates
Northpoint Communications, Inc.
Office of Ratepayer Advocates
Qwest Communications
Rythms NetConnections, Inc.
San Mateo County Telecommunications Authority
Zyan Communications
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Paula Bailey, Antioch
Matthew Eash, San Francisco
Jean Davidson, Redwood City
Jeff & Mandy Rubin, Pleasanton
James Stevenson
L.R. Webb, Los Angeles
ASSEMBLY FLOOR :
AYES: Alquist, Aroner, Ashburn, Baldwin, Battin, Bock,
Calderon, Campbell, Cardenas, Cardoza, Cedillo, Corbett,
Correa, Cox, Cunneen, Dickerson, Ducheny, Dutra,
Firebaugh, Floyd, Frusetta, Gallegos, Havice, Hertzberg,
Honda, Jackson, Keeley, Knox, Leach, Lempert, Longville,
Lowenthal, Machado, Maldonado, Margett, Mazzoni, Migden,
Nakano, Oller, Robert Pacheco, Rod Pacheco, Papan,
Pescetti, Reyes, Romero, Runner, Scott, Shelley, Soto,
Steinberg, Strom-Martin, Thomson, Torlakson, Vincent,
Washington, Wayne, Wesson, Wiggins, Wildman, Wright,
Zettel, Villaraigosa
NOES: Aanestad, Ackerman, Baugh, Brewer, Briggs, Florez,
Granlund, House, Kaloogian, Leonard, Maddox, McClintock,
Olberg, Strickland, Thompson
NOT VOTING: Bates, Davis, Kuehl
NC:cm 8/17/99 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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