Report — May 9

CALIFORNIA STATE LEGISLATURE

Labor Contracting; client liability.  Assembly Bill 1897 would hold a contracting business liable for any wage, workers’ compensation coverage and work safety violations committed by a contractor for any contract work performed for the contracting business, even though the contracting business did not have direct control over the working conditions of the contractor’s employees.  The bill is Co-Sponsored by the California Labor Federation (Labor FED) and the Teamsters and is labor’s latest attempt at limiting or restricting businesses’ ability to use contract labor. This proposal is heavily supported by labor but is equally opposed to by the business community, including the California Cable & Telecommunications Association.

According to the Assembly Appropriations Committee, the adoption of AB 1897 would have a fiscal cost “in the range of $150,000 to $250,000″ for the state “to adopt regulations to administer and enforce the requirements of the bill.” Due to the fiscal impact of the measure, AB 1897 was held on “Suspense” in Assembly Appropriations Committee this week, along with other measures with fiscal costs, to be reconsidered for passage at a later date. CCTA is officially OPPOSED to this bill.

 

Privacy; Personal Information; Use of Credit Cards and Debit Cards.  As introduced, Assembly Bill 1710 would have significantly restricted how businesses could collect and maintain customer information when using a credit or debit card for payment. However, the bill was recently amended to remove some of its more onerous provisions, including eliminating the applicability to paper records, reinstating provisions that exempt some encrypted data from the breech notice requirements, eliminating the requirement that breech notifications be provided to customers within 15 days of a security breech, and eliminating the mandate that businesses provide customers with two years of identity theft mitigation services when a security breech has occurred under all circumstances.

 

While the amendments have significantly improved the measure, the California Chamber of Commerce has identified several outstanding issues that need to also be addressed, including (1) the reference to a specific encryption standard which would become outdated as technology and standards improve; and (2) the requirement to notify “major state wide media” of a breach.  In addition, the bill was amended to eliminate the requirement to provide identity theft mitigation services to customers when a security breech has occurred.  However, if those services are provided they must be provided for two years. 

 

AB 1710 was heard and approved (8-3) in the Assembly Banking & Finance Committee this week. Prior to approving the measure in committee, the Author adopted an additional amendment to clarify that this proposal would not apply to “incidental” use of Social Security Numbers when its use “is necessary to identify the individual in order to accomplish a legitimate business purpose.” The measure now moves to the Assembly Floor for consideration.

School Finance; Broadband Infrastructure Fund. Assembly Bill 2319 (Bonilla) would provide K-12 schools with adequate Internet capacity to support new content standards and assessments, and support the integration of common core academic content standards in instruction for grades K-12 for the purpose of improving the academic performance of students. Specifically, the bill would create the Broadband Infrastructure Fund to provide K-12 school districts with $700 million to install, lease, or purchase “last mile” fiber connectivity to their schools. The California Department of Education would allocate the funding to areas with limited broadband capacity.

The Author has worked closely with the Corporation for Education Networks in California (CENIC) and the K-12 High Speed Network in the development of the bill. According to the K-12 High Speed Network, roughly 40 percent of California schools in both rural and urban counties do not have adequate Internet connection speeds to support 21st century learning. In whole numbers, this represents more than 10,000 schools and two million students. Adequate is considered to be 100 megabits.

CCTA and member companies met with the Author and supporters of the measure this week to discuss the bill. While everyone agreed that having adequate technology available to schools was important, cable and telco industry representatives question the magnitude of the problem and have requested documentation identifying the specific schools without adequate broadband connections. The main concern raised is the use of government funds to compete with private broadband investments. The Author agreed that government should not encourage or support broadband overbuilds. CCTA and members will review the data provided by the bill supporters and access the accuracy of the research.

AB 2319 was heard in the Assembly Appropriations Committee this week and due to a significant fiscal impact, the measures was placed on “Suspense.” The committee analysis identified a total one-time cost of $1.75 to $2.5 billion. The Department of Education estimated the total one-time cost would be $3 billion. Assembly Member Bonilla would like funding for this proposal to be a part of the final state budget and is seeking assistance from the cable industry and others for the measure.

California Energy Commission; Energy Efficiency Standards.  Assembly Bill 2581 (Bradford) would improve the regulatory processes of the California Energy Commission (CEC) by requiring the use of current data in energy efficiency proceedings and allowing the elimination of regulations that are duplicative or inconsistent with federal or state law. The bill also instructs the CEC to adopt by regulation or standards voluntary agreements that promote energy efficiency.

The California Cable & Telecommunications Association (CCTA) is supportive of the measure, but is seeking an amendment that would result in the CEC recognizing the value and the energy efficiency savings resulting from a voluntary agreement by industry stakeholders, but would eliminate the requirement that the CEC adopt the agreement as regulations or operating standards. Voluntary agreements allow industries to recognize and develop opportunities for reducing energy while protecting product development and innovation and should not be locked into a regulatory framework.  CCTA is working with the author and sponsors on this proposed amendment.

AB 2581 was heard in Appropriations this week and due to its fiscal impact, the measures was placed on “Suspense.” The committee analysis identified increased costs to the CEC in the $750,000 range for contracts and staffing associated with new requirements relating to appliance standards, and $700,000 range for contracts and staffing associated with new requirements relating to building standards. The measure will be reconsidered by the Appropriations committee at a later date.

 

CALIFORNIA REGULATORY UPDATE

 

Order Instituting Investigation to Address Intrastate Rural Call Completion Issues.  The California Public Utilities Commission has released a new Order Instituting Investigation (OII) to address intrastate rural call completion issues. The Commission is expected to open the Investigation at its May 15th meeting.  

 

The OII acknowledges that the FCC has already addressed call completion failure issues for both interstate and intrastate calls. Nevertheless, the OII seeks to better understand causes of rural call completion failures, to evaluate how these failures can be addressed, to revise or amend existing rules and evaluate what new rules might be adopted. Contingent upon the findings in the OII, the CPUC will consider opening a Rulemaking to propose remedies to address the problems identified in this investigation. A number of questions posed in the OII for Comment raise concerns beyond state replication of FCC call completion rules. Most significantly, the OII notes that the U.S. Court of Appeals has vacated portions of the FCC’s Open  Internet Order [net neutrality rules] that required broadband providers to treat all Internet traffic the same regardless of source, and asks for comment on “what effect, if any, does the D.C. Court of Appeals Decision have on the Commission’s rules requiring call completion.” It also notes that Public Utilities Code Section 558 (prohibiting blocking and discrimination) applies to Telephone Corporations, and “is not based on FCC characterization of a service as an information service or a common carrier service.” Other questions posed for comment include asking what technologies (wireless, wireline, fixed VoIP, nomadic VoIP) are more prone to call completion failures, and what impact Public Utilities Code Section 710 might have on Commission rules prohibiting blocking, chocking, reducing or restricting telephone traffic or the enforcement of Public Utilities Code Section 558.

 

A copy of the OII is here:    OII Addressing Intrastate Rural Call Completion Issues .  If and when the OII is opened, CCTA intends to intervene and participate as a party.

 

FEDERAL UPDATE

 

House Energy and Commerce Committee approves STELA.  The House Energy and Commerce Committee  Thursday approved the Satellite Television Extension and Localism Act(STELA). The bill which passed on a strong bi-partisan basis renews for five years the ability to deliver broadcast stations to over 1.5 million rural homes which do not have a local broadcaster.

 

In addition the bill has several provisions strongly supported by the cable industry. The bill repeals the FCC ban on integrated security in cable-leased set-top boxes. It also bans joint retransmission negotiations by unaffiliated broadcasters in a single market.

 

NCTA President & CEO Michael Powell issued a statement applauding “the bipartisan leadership of Chairman Upton and Walden and Ranking Members Waxman and Eshoo… We are especially pleased that the legislation eliminates the FCC’s Integration ban…We urge the full House and relevant Senate committees to quickly act on this must-pass legislation.”

 

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