BILL ANALYSIS Ó
AB 2395
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Date of Hearing: May 25, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2395 (Low) - As Amended May 16, 2016
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|Policy |Utilities and Commerce |Vote:|10 - 3 |
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Urgency: No State Mandated Local Program: YesReimbursable:
No
SUMMARY:
This bill establishes a process for a telephone corporation to
withdraw legacy public switched telephone network services and
transition to Internet Protocol (IP) enabled services and
networks, beginning January 1, 2020. Specifically, this bill:
1)Requires a telephone corporation to complete a customer
education and outreach program explaining the IP transition,
its benefits and advantages, and a description of the
alternative services available to consumers. Requires the
outreach to include information regarding timeframes and
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notices of discontinuance of service.
2)Requires a telephone corporation planning to discontinue any
voice grade single-line telephone service to give notice to
the California Public Utilities Commission (PUC) certifying
both following:
a) The telephone corporation has completed the education
and outreach program, and
b) An alternative voice service is available and includes
specified elements (The PUC's decision to confirm is
limited to the consideration of only the specified
elements.)
3)Presumes the telephone corporation has completed the
requirements to withdraw if the PUC fails to complete its
technical review within 120 days.
4)Authorizes a telephone corporation to discontinue any legacy
telephone service, beginning January 1, 2020, upon completion
of specified requirements or the failure of the PUC to
complete its technical review.
5)Requires a telephone corporation to give 90 days prior notice
to affected customers and to the PUC including specified
information.
6)Requires the telephone corporation to continue providing the
legacy telephone service in the affected area during the
notice period, except to new customers and customers who
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disconnect or change the features of the service
7)Authorizes a customer to petition the PUC, within 60 days
after the receipt of a notice of withdrawal, to request a
review of the availability of the alternative service at the
customer's location. Limits the review to specified elements.
Requires the PUC to issue an order disposing of the petition
no later than 60 days after its filing.
8)Requires the PUC, if it determines after an investigation that
no alternative service is available to the customers at the
customer's location, to order the telephone corporation to
continue providing service for no longer than 12 months after
withdrawal. If the time period in the order expires and there
still is no alternative provider, requires the PUC to order
the telephone corporation to continue providing service until
an alternative is available.
FISCAL EFFECT:
1) From 2017 and 2020, the PUC estimates annual costs of $2
million for 14 permanent PY and one limited-term PY across
four divisions to hold a proceeding and an additional $2.7
million for IT contracts and preliminary outreach efforts.
2) Beginning 2019, the PUC estimates annual costs of
$730,000 for 7 limited-term PY to address public comment
over a two-year period.
3) Beginning in 2020, unknown significant additional
staffing requirements to be determined by the process that
is adopted and the number of affected customers.
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4) Additional unknown fiscal impacts on subsidy, public
purpose and high-cost programs, licensing of alternative
providers, impacts on other utilities, and legal conflicts.
COMMENTS:
1)Purpose. According to the author, since 1999, Plain Old
Telephone Service (POTS) has declined by 85% in the state. As
of 2014, approximately 6% of Californians live in households
with only a landline (which includes POTS and VOIP), a 44
percent decline from 2010. This bill modernizes our state's
telecommunications regulations to ensure California is the
world leader in telecomm innovation.
2)Background. In the 1980s, Congress broke up AT&T into seven
smaller local companies. In 1996, the Telecommunications Act
of 1996 (The Act) was enacted to force local companies to open
up their networks to outside competition. As a result, The
Act distinguished two types of telephone service providers,
Incumbent Local Exchange Carriers (ILECs) and Competitive
Local Exchange Carriers (CLECs). ILECs are telephone
companies that provided local services prior to The Act, and
own most of the infrastructure and facilities in a service
area. CLECs are companies established by The Act that build
and operate communication networks in existing ILEC service
areas, and provide customers with an alternative to ILEC
services. The Act was intended to promote competition between
telephone service providers.
3)Carriers of Last Resort. Carriers of Last Resort (COLR) are
carriers that are required to serve, upon request, all
customers within their service area. This includes services
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that are provided by the public purpose programs such as the
Universal Lifeline Telephone Service, the Deaf and Disabled
Telecommunications Program, and the California TeleConnect
Fund, as well as providing basic service.
California has about 25 COLRs which generally include all the
ILECs, such as AT&T, Verizon, Frontier, and SureWest. Most
ILECs were designated COLRs after The Act.
Carriers who wish to become COLRs must obtain PUC approval.
COLRs benefit by having access to high-cost fund subsidies
that provide subsidies to small and large carriers for
providing landline telephone services to residential customers
in high cost areas.
The PUC has mandated basic service elements for voice services
for all COLRs. These services include: a) voice grade access
to the public switched telephone network or successor network;
b) real time two way communication; c) access to 911 services;
d) access to residential backup power; e) access to directory
services; f) billing protections; g) access to toll-free
numbers; h) telephone relay services for deaf and disabled
consumers; i) equal access to interexchange carriers; j)
conditions of service notifications to consumers.
4)Opting Out. According to the PUC, California has rules for
service withdrawal and the provision of basic service that are
technology neutral. Any COLR can provide basic service using
any technology that meets the requirements, and carriers
should be able to comply with these rules without regard to
technology or the digital format of the telecommunications
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081
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