BILL ANALYSIS
SB 1217
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Date of Hearing: July 12, 1999
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Roderick Wright, Chair
SB 1217 (Alarcon) - As Amended: July 7, 1999
SENATE VOTE : 25-13
SUBJECT : Internet broadband access.
SUMMARY : Requires a wireline broadband Internet access
transport provider to provide any other requesting Internet
service provider access to the broadband Internet access
transport services of that transport provider. Specifically,
this bill :
1)Enacts the Internet Access Enhancement Act of 1999.
2)Requires that access to a broadband Internet access transport
service shall be in accordance with the following:
a) Equal in quality to that provided by the access provider
to itself, its affiliates, or any other party to which
access is provided.
b) On rates, terms, and conditions that are just,
reasonable and nondiscriminatory.
c) Unbundled from any provision of content; and
d) At any technically feasible point selected by the
requesting Internet service provider.
EXISTING LAW
1)Authorizes the California Public Utilities Commission (CPUC)
to regulate public utilities, including telecommunications.
2)Does not currently address access to the Internet through
broadband Internet access transport providers.
FISCAL EFFECT : Unknown costs to the state or municipalities to
implement and enforce access provisions contained in this bill.
Overall costs are likely to be considerable to enforce numerous
access agreements.
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COMMENTS :
1)The author has introduced this bill to provide equal and open
access to providers of "wireline broadband Internet access."
This proposal would have the effect of treating cable
operators and any other providers of wireline broadband
Internet access as "common carriers" as defined in the
Telecommunications Act of 1996 (1996 Act). The provision of
internet services and other interactive computer services is
an area that has purposely been left free of regulation and
government intervention. Under federal law, cable Internet
services are cable services. The 1996 Act expanded the
definition of "cable service" to include "interactive
services," including information services and enhanced
services, See H.R. Conference Report 104-458 at 169 (1996). A
review of the legislative history indicates that this change
reflects the evolution of cable services from the traditional
one-way provision of video programming to include interactive
services. Thus, under this expanded definition of "cable
service," Internet access and other advanced services are
considered cable services if they are provided by a cable
operator over a cable system. A similar conclusion was
reached by FCC Office of Plans and Policy in a Working Paper
entitled, Internet Over Cable: Defining the Future in Terms of
the Past , wherein FCC stated that "the Commission could
reasonably conclude that Internet access services. . ., when
provided by a cable operated over its cable system, come
within the revised definition of 'cable services' under Title
VI.") Working Paper Series No, 30 at 88. (August 1988). The
Senate version of this bill that ultimately became the 1996
Act was amended to specifically make clear that cable
operators are not engaged in the provision of
"telecommunications services" to the extent that they provide
cable services. In fact, in the Federal Joint Board of
Universal Report to Congress, 13 FCC Rcd 11501, 11523
Paragraph 44 (1988) wherein an explanation was made that the
reference to cable service was deleted from the Senate
definition of "telecommunications services" so courts would
not interpret the term "too broadly and inappropriately
classify cable systems , , ,as telecommunications carriers".
2)This bill requires cable operators to be treated as common
carriers which contravenes Section 621 (c) of the Federal
Communications Act which expressly provides that cable
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operators offering cable services may not be treated as common
carriers or utilities. In the face of the legislative
history, the 1996 Act and FCC Working Paper findings, it
appears that this bill's forced access requirement is
restricted by the bar on common carrier or utility regulation
of cable systems offering cable television.
3)Further review of this bill might lead one to surmise whether
the Internet services provided via broadband cable services
are not cable services as described above, but in fact
"information services". The FCC found that, like cable
services, information services remain in a separate category
from telecommunications services and are not subject to
regulation as common carriers. Universal Service Report to
Congress 13 FCC Rcd at Paragraph 73 ("Internet access services
are appropriately classed as information, rather than
telecommunications, services.")
4)This bill provides that access should be provided at any
technically feasible point and that access should be
unbundled. Title II of the Federal Communications Act
precludes the imposition of common carrier-like requirements
on cable operators. Section 251(c) requires incumbent local
exchange carriers (ILECs) to impose unbundling,
interconnection and resale discount obligations in order to
break their monopolies over the provision of two-way services.
ILECs continue to serve over 99 percent of all consumers
whereas cable serves approximately 60 percent of all
consumers. Congress did not extend the type of unbundling
requirements provided for in this bill to any other common
carriers, including competitive LECs, or to cable operators.
To the contrary, Congress carefully distinguished among
carriers based on their market power.
5)The FCC has continued to avoid government in the provision of
Internet. In a recent speech FCC Chairman William Kennard
stated in pertinent part:
Here is my vision for broadband in America. Multiple
broadband pipes serving America's homes. . . digital
subscriber lines (DSL), cable modem, terrestrial
wires, and satellite. . . Multiple facilities based
carriers competing robustly to bring all sorts of
wonderful content to America's homes. The best
decision government ever made with respect to the
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Internet was the decision the FCC made 15 years ago
NOT to impose regulation on it. . . . Now the Baby
Bells say that it's unfair, that they have to open
their networks, but cable doesn't. . . . Baby bells
have been given the roadmap to their liberation. All
they need is the courage to compete. . . We decided
to let the market forced churn while we carefully
monitor the situation, and the marketplace has
responded. The amount of investment in broadband and
the number of deals concerning it over the past four
months have been staggering -- and not just in cable.
Where cable modem has been introduced, DSL is
following. . . .Yet some local cable franchising
authorities want to try a different approach. Instead
of national policy of de-regulation and competition,
they want a local policy of regulation. . . There are
30,000 local franchising authorities in the United
States. If each one of them decided on their own
technical standards for two-way communications on the
cable infrastructure, their would be chaos." "The
Road Not Taken: Building a Broadband Future for
America," June 15, 1999.
6)This bill is clearly is contrary to the policy direction from
FCC on this issue.
7)As noted in FCC Chairman Kennard's speech, multiple technical
standards for cable companies who are investing billions of
dollars in private capital to upgrade their networks to
provide high-speed Internet access would create chaos.
Additionally, opponents of this bill indicate that the forced
access requirements embodied in this bill would delay cable's
broadband deployment and escalate the cost of capital. As
noted in Chairman Kennard's speech, lack of regulation has
been deemed a contributory factor the growth in the
marketplace concerning broadband.
8)In light of the inconsistency with federal law and the stark
difference this approach would be in light of FCC proposed
policy direction, the author should reconsider whether it is
proper for California to attempt to supersede federal law and
regulation in this policy area.
REGISTERED SUPPORT / OPPOSITION :
SB 1217
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Support
None of file.
Opposition
TCI
Avenue TV Cable Service, Inc.
Jones Intercable
TimeWarner Cable
Analysis Prepared by : Carolyn Veal-Hunter / U. & C. / (916)
319-2083