Report — January 10

STATE BUDGET

Governor’s Releases $155 billion Proposed 2014 State Budget. Governor Jerry Brown released his proposed $155 billion 2014-15 state budget this week. The Governor noted while this year’s budget is balanced with some modest spending increases for public K-12 and higher education, the proposed budget would also allocate $11 billion to pay off debt. The budget also includes $1.6 billion reserve for a “rainy day fund”. The Governor stated that he is focused on maintaining fiscal stability and, as such, would not authorize any new significant legislative spending proposals nor would he authorize any new tax increases. The California Legislature has until June 15th to submit a revised budget back to the Governor for his signature.

CALIFORNIA STATE LEGISLATURE

This week, the Legislature returned from their Interim Recess to start the second year of the 2013-2014 Legislative Session. While the Legislature has until February 21st to introduce new legislative proposals, both houses only have until January 31st to move any legislation introduced in 2013 out of the house of origin. On January 6th, there were over 80 bills that were “gutted and amended” into new proposals that must be approved in their house of origin by the end of the month. Most of the following bills are “gut and amends” facing the January 31st deadline.

Expansion of the Education Teleconnect Fund. Assembly Bill 876 (Bonta) would expand the availability of the California Teleconnect Fund (CTF) to preschools and kindergartens. It would also require the California Public Utilities Commission to develop and implement an outreach plan to increase the awareness of advanced communications services available to these schools. And lastly, the bill would require the Commission to establish and maintain a database of the communications services purchased by participating schools and libraries, with access to the database available to qualifying entities with “average price information” available to the public.

Although AB 876 was only just amended on January 6th, the Author has already proposed amendments that (1) add language to require the Commission to develop a plan for providing “advanced communications services” to CTF applicants (as opposed to implement one) and submit that plan to the Legislature; (2) provide the Commission with the discretion to implement the plan if there are sufficient funds; and (3) authorize the Commission to work with third parties to help manage database on project pricing. The new amendments would also eliminate the requirement to open a new proceeding on need for personalized digital learning in schools and libraries. According to the Committee consultant, the final language would not allow the Commission to unilaterally implement the program; only develop the plan.

While supportive of ensuring all “advanced communications services” are eligible, a move consistent with the federal E-Rate Program, there are concerns with sharing and making public the pricing information on the database. CCTA questions the value of database given that CTF projects are uniquely different and comparing prices between projects would not be appropriate or helpful. The Author’s intent of establishing the database was to provide assistances to less experienced or well-staffed school districts and libraries seeking to implement a CTF project.

CCTA has been working with the Author and Committee staff to address our concerns. The proposal is a work in progress. AB 876 is set for hearing next week on Monday, January 13th in the Assembly Utilities and Commerce Committee.

Internet Privacy. Assembly Bill 242 (Chau) would amend current California that requires a commercial web site or online service that collects personally identifiable information through the Internet to “conspicuously post its privacy policy” on the web site. AB 242 would simply eliminate the word “privacy.” The word “privacy,” in some cases, would be replaced with the reference, “using your information.” AB 242 would also require the web site operator to include hyperlinks to the web pages to the Attorney General and the Federal Trade Commission where the consumer could file a complaint.

The Author believes that the public misinterprets “privacy policy,” believing it means any information shared is kept private. Eliminating “privacy” and replacing it with “using your information” would encourage the general public to read these policies. The California Chamber of Commerce is opposed to the measure because they believe it will only confuse the public. The cable industry has historically included information in their billing policies to assist customers to contact the authorizing franchising authority so the proposed practice is not new.

AB 242 is set for hearing next week on Tuesday, January 14th in the Assembly Judiciary Committee.

State Contracts; Criminal History Background Checks. Assembly Bill 1198 (Jones-Sawyer) would prohibit the State from accepting a bid from an entity that asks any applicant to disclose their criminal history record prior to determining whether the applicant meets the minimum qualifications for the job. This prohibition would not apply if a criminal history background is required pursuant to state or federal law or for a job with a criminal justice agency.

The Author introduced this same proposal last year (AB 870). The proposal was approved by the Assembly Judiciary Committee but was held in the Assembly Appropriations Committee due to increase costs to the state for contracting. Last year, CCTA requested an amendment that would also exempt the cable industry because Public Utilities Code Section 5910 requires the industry to conduct background checks of its employees, contractors and vendors. The Author agreed but his bill never moved.

CCTA again requested this amendment, According to the Author’s Office, AB 1198 will be amended to only apply to “public works and transportation” contracts. By legal definition, a “public works” contract means “an agreement for the erection, construction, alteration, repair, or improvement of any public structure, building, road, or other public improvement of any kind.” The bill will be discussed and voted on next week in policy committee “as proposed to be amended” with this new language. CCTA will continue to work with the Author to ensure that the provisions of the bill do not apply to the cable industry.

AB 1198 is set for hearing next week on Tuesday, January 14th in the Assembly Judiciary Committee.

Public Utilities Commission; Removal of a Commissioner. Senate Bill 434 (Hill) would provide that, beginning on January 1, 2014, a commissioner at the California Public Utilities Commission who acts as an owner, director, or officer of a non-state entity that was established as a result of an order, decision, motion, settlement, or other action by the Commission in which the commissioner participated, may be removed.

According to the Author’s Office, SB 434 is a clean-up bill to last year’s Resources Budget Trailer Bill (SB 96) which contained a provision that prohibited a sitting PUC commissioner from serving on a non-state entity that he or she helped create as a commissioner. The prohibition, however, only applies to non-state entities created before January 1, 2014. The Author believes that this was a drafting error. SB 434 applies the prohibition going forward, so it would affect any non-state entity that the Commission might choose to create in the future.

The Author plans on having SB 434 heard next week on Tuesday, January 14th in the Senate Energy Committee.

CALIFORNIA REGULATORY UPDATE

California Lifeline Proposed Decision of Commissioner Sandoval. CCTA filed Comments on the Revised Proposed Decision (PD) of Commissioner Sandoval in the CPUC’s Lifeline proceeding. CCTA argued that the Commission must adopt Lifeline rules that continue the existing Commission practice of allowing non-traditional providers to voluntarily participate in the Lifeline program, and requiring only compliance with the Commission’s General Order 153, Lifeline rules. Without these changes, CCTA argues, the Revised PD is unlawful because it violates Public Utilities Code Section 710.

DIVCA Franchise Renewal Proceeding. The Commission released its Proposed Rules and Scoping Rulings regarding DIVCA state video franchise renewals. Comments on the Proposed Rules are due January 24. CCTA is working with its DIVCA Franchise Renewal working group and will file comments supporting the proposed rules.

Commissioner Florio’s Proposed Decision in Phase 3 of the Commission’s Fire Safety-related Rulemaking. On January 9th CCTA joined the CIP Coalition in replying to comments submitted in response to Commissioner Florio’s Proposed Decision in Phase 3 of the Commission’s Fire Safety-related Rulemaking. CCTA joined CIPS in arguing that the PD must be revised to correct one of the technical errors contained in the PD that will otherwise require exceedingly high safety factor-related requirements for the entire state and result in costly and otherwise unnecessary pole replacements. CCTA filed separate opening comments in this proceeding, arguing that the PD would result in unduly burdening Cable with those pole replacement costs if the technical error, that effectively imposes safety factors upon safety factors, is not corrected.

FEDERAL UPDATE

FCC Chairman Wheeler and Commissioner Sandoval at Oakland Town Hall Meeting. FCC Chairman Tom Wheeler and CPUC Commissioner Catherine Sandoval took part in a town hall style meeting Thursday night in Oakland.

The town hall sponsored by Voices for Internet Freedom, a coalition of almost 30 organizations led by the Center for Media Justice, Free Press, ColorofChange and the National Hispanic Media Coalition drew around 150 people.

Chairman Wheeler sat patiently and took notes as over 35 individuals representing organizations and themselves spoke about a plethora of issues including the need for access to affordable phone and broadband services.

In her ten minutes of remarks Commissioner Sandoval spoke about the digital divide and how students in outer Red Bluff had to be bussed to an area with better Internet service in order to take standardized tests. Her primary remarks were focused on the CPUC Lifeline proceeding. She said Lifeline was “at the precipice of being a game changer.” People were running out of minutes while they were on hold with social service agencies or could run out of minutes while talking with suicide prevention. Under the plan she proposed everyone would have many more minutes and smart phones would be affordable for all. She also said the CPUC should preserve landlines.

While it was not the primary focus of the evening, several speakers including Rashad Robinson Executive Director of ColorofChange and Jack Walsh, executive director of the National Association for Media and the Arts spoke about the need for net neutrality rules.

Media Consolidation, particularly in the broadcast industry came in for strong criticism from speakers.

Several presenters while complimentary of recent FCC action which helped reduce the cost of phone service said the Commission still had much work to do in this area. Chairman Wheeler said he was moved and would remember the remarks of Karen Gonzales whose son was sentenced to 20 years when he was 17 years old and the burden of the thousands of dollars her family pays for calls puts on her family.

Several speakers including Marc Toney from TURN spoke to the need of maintaining a landline option for phone service and not allowing a forced migration to VoIP.

Chairman Wheeler took notes the entire evening as people spoke and in his 15 minutes of remarks at the close he referenced by name several of those who had spoken. He said the evening had been a learning and listening experience for him and he appreciated hearing from people outside the beltway. He said he was a big supporter of Lifeline and that Lifeline for broadband was a legitimate concept.

On the transition from older to new networks he stated that the challenge we face is how do we make the values we have come to expect (the social compact) continue under new technologies. He said he intended to turn to network providers and tell them if they want incentives to grow networks, which he supports, then they will have to uphold the compact.

The overall tone of the evening was appreciative of the fact that the FCC Chairman had participated in this type forum and the organizers said they hoped the Chairman would continue to participate in this type of event.

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