It’s been another active year in the world of California telecommunications as federal and state government wrangle for regulatory authority, policy moves forward to fortify physical infrastructure, and California pursues its eternal goal of universal service. And that’s just the tip of the iceberg! In an attempt to make sense of this past year, we have selected and summarized some of the biggest topics in California telecommunications law and policy for the year of 2018. Happy reading, and happy New Year!
California Net Neutrality: In the wake of the Federal Communications Commission’s (FCC) adoption of its “Restoring Internet Freedom” order in 2017 that overturned the FCC’s net neutrality regulations from 2015, California and other states filed suit challenging the FCC’s turnabout. The State also took a stab at crafting its own net neutrality rules (SB 822), which Governor Brown signed into law in September 2018. SB 822 would ban internet providers from: blocking or throttling legal apps and websites, offering paid prioritization of content, or zero-rating (offering free data for specific apps). But shortly after SB822 was signed, the U.S. Department of Justice filed suit against California over SB 822 on preemption grounds; California later agreed to hold off on enforcing its new net neutrality law until the U.S. Court of Appeals for the D.C. Circuit determines whether the FCC lawfully revoked its net neutrality regulations. Oral argument in the D.C. Circuit is set for February 2019.
Infrastructure Safety Rules: There have been two key infrastructure rule changes over the past year. First, in December 2017 the CPUC approved its enhanced infrastructure rules for high fire-threat areas—those enhanced rules cover vegetation clearance, wire clearance, and inspection cycles, among others. The new rules went into effect in September 2018 for areas designated an extreme risk for wildfires associated with utilities. Later, in May 2018, the CPUC approved significant changes to Rule 18 of its General Order 95, which governs overhead infrastructure. At a high level, the revised Rule 18 reduces repair timeframes to address safety risks on poles and related facilities.
Natural Disaster Rules: With the onslaught of devastating wildfires in California in recent years, in addition to enacting infrastructure safety rules, the CPUC turned its attention to utility response to natural disasters. The CPUC has a flurry of proceedings focused on this issue, and has already released interim rules on de-energization of power lines in cases of dangerous conditions, and interim emergency disaster relief measures, which includes requirements for carriers to offer certain fee waivers and submit compliance reports.
Text Tax: This December the CPUC scuttled plans to assess universal service surcharges on intrastate revenue derived from text messaging (what came to be known as the “text tax”). In an interesting turn of events, the CPUC tweeted that the FCC recently issued a declaratory ruling finding text messaging to be an “information service” and not a “telecommunications service.” The tweet goes on to explain that in light of the FCC order, the assigned CPUC Commissioner would withdraw her proposal that to impose surcharges on intrastate revenue from text messaging.
Broadband Infrastructure Funding: The California Legislature passed AB 1665 in 2017, which prompted the CPUC to create new rules governing California Advanced Services Fund—the State fund that subsidizes broadband infrastructure and adoption projects. On the infrastructure funding side, key new rules cover right of first refusal, ministerial review of smaller project proposals, project challenges, process for determining whether an area is served, and more. The CPUC is likely to be active in granting $300 million or more in funding over the next three years.
California LifeLine: California has reacted to major changes by the FCC to the federal Lifeline program by seeking to restructure California’s own LifeLine program, which provides telecommunications service for low-income Californians. This year, the CPUC has expanded eligibility criteria for LifeLine subscribers, supplemented the loss of federal funds for participants that only qualify under California-only eligibility but not federal eligibility criteria, reduced the benefit portability freeze’s duration from 60 days to up to 24 hours (thereby shortening the minimum time before LifeLine subscribers can move to new providers), and approved criteria for pilot programs to be launched in 2019 to increase participation in LifeLine.
CLEC Wireless Installation Rights: As described in a prior post, in April 2018, the CPUC amended the CPUC Right-of-Way Rules to provide competitive local exchange carriers (CLECs) with expanded nondiscriminatory access to public utility infrastructure for the purpose of installing antennas and other wireless telecommunications equipment.
Death of Prepaid Surcharge Law: In 2015, the California Legislature enacted a comprehensive regime for the collection and remittance of the taxes, fees, and surcharges assessed on prepaid wireless telephone service. That law is now defunct after a federal court recently ruled that the implementation of the statute conflicts with federal law. Amidst significant opposition from prepaid carriers, the CPUC has since imposed new rules governing surcharges assessed on prepaid wireless telephone service, including customer notice and itemization of surcharges on prepaid receipts.
Consumer Privacy: Earlier this year, consumer advocates filed a petition with the CPUC requesting a rulemaking to adopt new rules imposing extensive privacy related regulations on telecommunications providers. The CPUC denied the petition arguing that consumer privacy is covered by AB 375, California’s comprehensive privacy law that creates extensive notice, opt-out/opt-in, access, and erasure rights for California consumers vis-à-vis businesses that collect their personal information, as well as a private right of action for data breaches.
Onward to the New Year: And while 2018 is coming to an end, 2019 promises to be equally active at the CPUC. There are pending proceedings covering everything from confidentiality of utility records and utility pole databases, to major merger approvals and rules for utility response to natural disasters.
Feel free to contact us if you need background material on any of these matters, or have related questions.