Thoughts on AB 2395

By Trish Steel, Alliance Chair
October 2016

AB 2395 – Telecommunications: replacement of public switched telephone network

AB 2395 was an industry-sponsored bill introduced in early 2016 that would have allowed incumbent telephone providers like AT&T to withdraw landline service by 2020 with little in the way of consumer protections.  Luckily, the bill suffered an unexpected defeat due to the coordinated efforts of a coalition of groups that came together at the last moment, but it is important for everyone to understand that although this particular battle was won, the war is far from over.  We need to prepare for the next de-regulation bill that will grant industry permission to abandon the copper-based phone network that many residents and businesses in rural counties still use on a daily basis.  The next bill may come in early 2017, and currently too many residents are resting on their laurels and feeling secure that their landline services are protected.

It’s important to be clear that our goal is not to stop the “technology transitions”; in fact, just the opposite: we are in favor of new technologies which bring promise of internet connectivity to rural residents.  What we are opposed to is the withdrawal of landline services upon which many residents rely,  BEFORE  affordable and reliable alternative services are in place.  This is just common sense. It is also in the best interest of public safety, and by law the telecoms are required to provide this existing service. But unfortunately there is a opposing force at work here: the very high cost of maintaining these copper networks (many of which are in need of major repair) to households, with a declining number of subscribers to pay for it.  This creates enormous incentive for incumbent providers to move subscribers off landlines and onto their more profitable wireless options, and to find a way to withdraw from their legal obligation to provide landline services. There already exists a process within the California Public Utilities Commission (CPUC) to do this, in a regulated way that guarantees consumer protections.  The telecoms however, want a simpler de-regulated way to end their obligations, and by passing a law such as AB 2395 they can do an “end run” around the established PUC process.  And with their enormous lobbying power at the state level, they are having success all over the country.

So what can we do to make sure that our citizens are not left without essential services before alternatives are in place?  There is no “easy fix”, but the solution must include providers investing in rural areas they plan to withdraw from to ensure that services are universal, reliable, and affordable.  We must hold them accountable to what they say they will do.  We must also get organized, educated, and prepared to fight against these continuous end-run bills that are “too much-too soon”, and only support efforts that ensure that consumer protections are in place.

We can also learn from other states where such bills have passed, such as our neighbor to the east, Nevada. In 2013 AT&T slipped a de-regulation bill through the Nevada legislature, AB 486.  Those directly affected, union workers from the local CWA, were not even aware of this bill had passed until 2016.  This bill required that 2 alternatives services be in place before landlines were withdrawn. The record of this proceeding (Docket No. 16-03021) is publicly available, and you can find all the documents on the Nevada PUC website here.  In reading through these documents, I found some interesting information:

  • In March 2016 in a 263-page filing AT&T petitioned the Nevada PUC for permission for “relief from it’s obligation as Provider of Last Resort (POLR)…” in all 17 counties in Nevada where AT&T is the incumbent provider.  In July, 2 counties and other areas were withdrawn from the petition in a negotiated settlement.
  • People were upset…in July 2016 Eureka County submitted a document in which 100 of their residents verified that “I cannot get reliable wireless phone coverage at the address listed above.”  WhitePine county also submitted a document in which 61 more residents verified this same statement.  The Paiute Tribe sent a letter to the Nevada saying that “Our community is going to be adversely affected if AT&T is granted this relief.”  Individual residents also submitted letters opposing this petition.
  • So how did AT&T prove to the PUC that “alternative services” were available in areas it wanted to withdraw from as per AB 486?  It turns out that AT&T hired a 3rd party to do the GIS work which compiled data from “publicly available marketed coverage information by the carriers”, and that they did NOT rely on any “special customer information” (p. 4 of Exhibit 6 of initial filing).  In other words, they used provider “marketing maps” and didn’t talk to the people who actually lived in the areas nor try to independently verify the accuracy of the marketing information.
  • On July 26th a “full settlement” was signed by the At&T, the Nevada PUC, and the Bureau of Consumer Protections, and is to be presented to the Nevada PUC for approval.  This settlement basically allows AT&T to obtain “relief from it’s obligation as Provider of Last Resort (POLR) in portions of it’s service area” after removing Lander and Whitepine counties, and a few parts of other counties, including Eureka.

So what can we learn from the from Nevada experience?  I see a couple of important points:

  • Incumbents will try to withdraw from all the areas they can (they petitioned for relief in EVERY one of their Nevada service areas).
  • They do not use accurate information for the basis of their petition, as “provider network coverage maps” are notoriously inaccurate.  Nor did they try to get independent verification that alternative services were available by talking to residents who lived in these areas.
  • The requirement to prove that alternative services were NOT available fell upon the cities and counties themselves, which had to expend huge effort to get surveys out to people, get them completed and returned, compile results, and then submit to the PUC.  Two counties did this; does that mean that the other counties have reliable wireless service to all their residents?  Or maybe another explanation is that these other counties simply were not able to organize such a huge effort.  What is the relationship between the areas withdrawn from consideration and such efforts?  Eureka county submitted 100 surveys, but was not one of the counties withdrawn. However, there are areas within the county which were withdrawn.  Without analyzing the addresses of the survey respondents and the areas withdrawn, I cannot answer this question.  I would suspect that there is a strong correlation and that without a fight from residents of an area, their area will be assumed to have wireless service universally available.

If we think that fighting a bill before it is passed is a lot of work, then think about trying to fight the repercussions of the bill after it has passed throughout an entire state.  Luckily for us, there is a group in California that is leading the campaign to make sure that consumers are protected – The Utility Reform Network (TURN).  But TURN absolutely cannot do this alone.  They have the expertise, but they need people behind their efforts.  That is why it is important for people to educate themselves and to understand that they cannot assume that their landline is safe just because no alternative service is in place (as proven from the Nevada experience). Help TURN help us by joining with their Phones That Work Campaign. This campaign is designed to move us from defeating bad legislation—to defining a proactive agenda that meets the communication needs of our communities.

Please see our website for more information and Get Involved!