BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
ALEX PADILLA, CHAIR
AB 1918 - Davis Hearing Date: June
15, 2010 A
As Amended: April 5, 2010 FISCAL B
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DESCRIPTION
Current law requires the California Public Utilities Commission
(CPUC) to require each electrical, gas, water, and telephone
corporation with gross annual revenues exceeding $25 million,
and their commission-regulated subsidiaries and affiliates, to
submit annually a detailed and verifiable plan for increasing
women, minority, and disabled veteran business enterprise
(WMDVBE) procurement.
This bill would add wireless telecommunications service
providers to the list of entities subject to these requirements.
BACKGROUND
Beginning in 1986, the Legislature enacted a series of statutes,
and the CPUC adopted General Order (GO) 156, to encourage the
award of a fair proportion of all utility contracts for products
and services to WMDVBEs. Commission-regulated water utilities
originally were not required to participate in the program but
were added in 2009. These entities are required to annually
submit a detailed and verifiable plan, with goals and
timetables, for increasing WMDVBE procurement in all categories
of procurement, including technology, equipment, supplies,
services, materials, and construction. A separate annual report
on progress made in meeting those goals also is required. There
is no penalty for failure of a utility to meet its goals. The
CPUC is required to make an annual report to the Legislature on
utility progress in meeting WMDVBE goals.
GO 156 specifies guidelines for the utilities to follow in
meeting WMDVBE requirements, including the following procurement
goals: 5% of all procurement from woman-owned business
enterprises; 15% from minority-owned business enterprises, and
1.5% for disabled veteran-owned businesses enterprises. To
count toward these goals, woman- and minority-owned business
enterprises must be certified by the CPUC's Utility Diversity
Supplier Program, and disabled veteran-owned businesses
enterprises must be certified by the Department of General
Services.
The CPUC currently has an open rulemaking to review the impact
of GO 156 and its success in encouraging regulated utilities to
seek the full and fair participation of WMDVBEs in their
procurement programs (R.09-07-027).
The California Constitution prohibits the State from
discriminating against, or granting preferential treatment to
any individual or group on the basis of race, sex, color,
ethnicity, or national origin in the operation of public
employment, public education, or public contracting. According
to the CPUC, nothing in GO 156 authorizes or permits a utility
to use set-asides, preferences, or quotas in administration of
its WMDVBE program and utilities retain the authority to use
legitimate business judgment to select a supplier for a
particular contract.
COMMENTS
1) Growth of Wireless Service . According to the author,
the purpose of this bill is to ensure that wireless
telecommunications service providers are required to comply
with WMDVBE requirements specified in statute and in
General Order 156. This purpose recognizes the dramatic
growth of wireless service in the telecommunications
marketplace and the shift away from traditional landline
voice service. The CPUC reports that the total number of
landline access lines in California has decreased from
24.77 million in 2001 to 20.25 million in 2008. The number
of wireless subscribers in California has grown from 14.8
million in 2001 to 31.7 million in 2008.
2) Current Law Covers Wireless . Current law provides that
a "telephone corporation" is required to comply with WMDVBE
requirements specified in statute and GO 156. A "telephone
corporation" is defined as including "every corporation or
person owning, controlling, operating, or managing any
telephone line for compensation within this state" (Public
Utilities Code Section 234). A "telephone line" is defined
as including "all conduits, ducts, poles, wires, cables,
instruments, and appliances, and all other real estate,
fixtures, and personal property owned, controlled,
operated, or managed in connection with or to facilitate
communication by telephone, whether such communication is
had with or without use of transmission wires" (Public
Utilities Code Section 233). Thus, wireless service
providers fall within the definition of "telephone
corporation."
Wireless industry representatives confirm that they view
WMDVBE requirements as applying to wireless service
providers. In fact, several entities, including AT&T and
the California Wireless Telecommunications Industry
Association, have filed comments in the CPUC's proceeding
on GO 156 in which they discuss WMDVBE procurement issues
specific to the wireless industry. No evidence has been
presented to the committee indicating that wireless service
providers are not subject to WMDVBE requirements under
current law. Thus, adding "wireless telecommunications
service provider" to the list of entities subject to WMDVBE
requirements is unnecessary and has the negative effect of
implying that wireless providers currently are not subject
to these requirements.
3) Confusing Code References to Wireless. The idea to add
"wireless telecommunications service provider" to the list
of utilities that already includes "telephone corporation"
highlights the fact that the Public Utilities Code is not
entirely consistent and clear in its references to wireless
service. What is commonly referred to as wireless,
cellular, or mobile telephone service - the mobile devices
used as an alternative to landline telephone service - is
referenced with a variety of terms in the Public Utilities
Code. These include "commercial mobile radio service" as
defined in federal law and regulation (Section 216.8) and
"mobile telephony service" (Section 224.4). "Wireless
telecommunications service provider" does not currently
appear in the Code or in federal statutes. As the wireless
sector of the telecommunications market rapidly expands,
the Legislature should be diligent in its effort to use
consistent, clear and precise terminology so service
providers and the public can discern their rights and
obligations under the law.
4) Double Referral . This bill has been double-referred to
the Senate Committee on Veterans Affairs.
ASSEMBLY VOTES
Assembly Jobs, Economic
Development & the Economy (4-2)
Assembly Appropriations (11-5)
Assembly Floor (45-26)
POSITIONS
Sponsor:
Author.
Support:
None on file.
Oppose:
None on file.
Jackie Kinney
AB 1918 Analysis
Hearing Date: June 15, 2010