BILL ANALYSIS
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THIRD READING
Bill No: SB 1066
Author: Bowen (D)
Amended: 5/10/99
Vote: 21
SENATE ENERGY, U.&.C. COMMITTEE : 4-2, 4/13/99
AYES: Bowen, Hughes, Solis, Vasconcellos
NOES: Kelley, Mountjoy
NOT VOTING: Alarcon, Baca, Brulte, Peace, Speier
SENATE ENERGY, U.&.C. COMMITTEE : 10-0, 5/11/99
AYES: Bowen, Alarcon, Baca, Brulte, Hughes, Kelley,
Mountjoy, Peace, Solis, Speier
NOT VOTING: Vasconcellos
SUBJECT : Telecommunications
SOURCE : Author
DIGEST : This bill states legislative intent that the
California Public Utilities Commission open a proceeding to
implement a process for the sharing of telephone lines.
ANALYSIS : Pursuant to federal and state law and policy,
the competitors to the local telephone companies are
permitted to purchase pieces of the local telephone company
networks in order to compete. This unbundling requirement
is a recognition of the unique monopoly position the
incumbent local networks enjoy and is an effort to promote
competition in the local telecommunications service arena.
CONTINUED
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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 split the frequencies. More concretely,
several competitors to the incumbent local telephone
companies (e.g., Pacific Bell and GTE) expressed a desire
in the January hearing 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 had requested the California Public
Utilities Commission (CPUC) to require line sharing in
California, but the CPUC declined to do so, citing an
inadequate record and a deference to the Federal
Communications Commission (FCC).
In March, the FCC issued an order tentatively concluding
that line sharing is technically feasible. The FCC noted
"that 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 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 the states
from mandating line sharing. The FCC decision permits
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states to proceed with line sharing.
This bill makes legislative findings regarding California
and federal policies encouraging the rapid deployment of
advanced telecommunications services and the role that
competition can play in encouraging such deployment. The
bill further recognizes a recent tentative decision by the
FCC regarding the ability of others to share the telephone
lines owned by the local telephone companies.
This bill states legislative intent that the CPUC should
open a proceeding to implement a process for the sharing of
telephone lines. The bill further states legislative
intent that if the FCC determines that line sharing is not
feasible, that the state should not adopt contrary
regulations.
Comments
As a result of the January oversight hearings, the author
introduced this bill to encourage competition, improve
availability, and lower prices for high speed internet
access.
This bill is supported by a variety of competitors to the
local telephone companies who believe line sharing provides
a viable means of making high speed Internet access
available to more people and businesses more quickly, as
well as by TURN, which notes that line sharing is a
potentially lucrative source of new revenue to the local
telephone company. As such, TURN believe the new revenues
should be considered when determining the rates for basic
telephone service.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/12/99)
Covad Communications Company
High Speed Access Coalition (HiSAC)
MCI WorldCom
NorthPoint Communications
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TURN
NC:sl 5/13/99 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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