The Communications Workers of America says when it comes to “stealthy” bills like S.B. 1611 that deregulate telecommunications in California, “no price is too high — no lie is too big.”

AT&T and the American Legislative Exchange Council (ALEC) are back again fighting for more deregulation of California’s telecommunications industry with a bill that will strip oversight of vital telecommunications services and stop punishing bad actors that leave customers without telephone service, sometimes for weeks.

California legislators are typically not responsive to the wholesale deregulation efforts that seem to draw support in more conservative states, so AT&T’s lobbyists are trying a more “incremental” approach in the state. But AT&T has also inserted “stealth” language into the bill that would dismantle consumer protections, allow companies to abandon unprofitable landlines, and strip away important oversight “checks and balances” needed to ensure good service.

Sen. Padilla’s top corporate contributor is AT&T.

S.B. 1611 illustrates that AT&T can buy its way into any legislator’s office, Democrat or Republican. The bill’s chief sponsor, Rep. Alex Padilla (D-20th Senate District) has received more contributions from AT&T than from any other corporation in both the 2006 and 2010 elections.

The bill ostensibly claims to limit its scope narrowly to “Voice over Internet Protocol” (VoIP) and “Internet Protocol enabled service.” That brings to mind services like “digital phone service” from cable companies or alternative telephone services like Vonage, magicJack or Skype.

S.B. 1611:

The bill would prohibit any department, agency, commission, or political subdivision of the state from enacting, adopting, or enforcing any law, rule, regulation, ordinance, standard, order, or other provision having the force or effect of law, that regulates VoIP or other IP enabled service, unless required or delegated by federal law or expressly authorized by statute. The bill would specify certain areas of law that are expressly applicable to VoIP and IP enabled service providers. The bill would provide that its limitations upon the commission’s regulation of VoIP and IP enabled services do not affect the commission’s existing authority over non-VoIP and other non-IP enabled wireline or wireless service….

To the layperson who generally believes services like Skype and Vonage might not deserve the same oversight as AT&T, Frontier, or Verizon — which provide Californians traditional landline service, consider Section 2 (a)(2) of the bill, which describes and defines VoIP and IP enabled service as anything that:

“Permits a user generally to receive a call that originates on the public switched telephone network and to terminate a call to the public switched telephone network” and “any service, capability, functionality, or application using existing Internet Protocol, or any successor Internet Protocol, that enables an end user to send or receive a communication in existing Internet Protocol format, or any successor Internet Protocol format through a broadband connection, regardless of whether the communication is voice, data, or video.”

This “narrow” deregulation bill just grew as wide as the Gulf of Mexico and can realistically allow any phone company in California to ignore state oversight and regulation forever.

Traditional telephone companies increasingly utilize exactly these technologies for calls placed over ordinary landline phones. Using broadband service to engage in two-way communications also qualifies. With this kind of defining language, virtually every telecommunications service in the state of California would win near-total deregulation and walk away from important oversight. The California Public Utilities Commission certainly understood the implications of this bill when the majority of commissioners came out in opposition to S.B. 1611.

Goodbye Universal Service: S.B. 1611 Allows Phone Companies to Abandon Rural and Economically Distressed California Communities

Several public interest groups also discovered language in the bill that is a perennial favorite of AT&T — eliminating universal service requirements that assure every citizen that wants a telephone line can get one. S.B. 1611 lays waste to Section 709 of the California Code which guarantees: “our universal service commitment by assuring the continued affordability and widespread availability of high-quality telecommunications services to all Californians.”

With that language gone, the state’s phone companies can unilaterally decide to abandon the customers they no longer want to serve. That could spell disaster in rural northern and eastern California, and leave low income residents with nothing but a dead phone line, unable even to call 911 in an emergency.

One AT&T Lobbyist for Every California Lawmaker

The importance AT&T places on influencing lawmakers is readily apparent when one realizes there are at least 120 AT&T lobbyists working in the state capital Sacramento, one for every California lawmaker.

But when one considers the track record of California phone and cable companies in the last few years, is less oversight and regulation the right answer?

• Verizon Sued for Providing DSL Speeds (Suitable for VoIP) They Can’t Deliver
• AT&T Gouges California With 25% Rate Increase
• California Landline Nightmare: Residents in Bakersfield in Tears Over Lousy Service
• Southern California Power & Phone Companies Blamed for Devastating Wildfires
• Verizon Bills Dead People: We’ll Settle for Half Because She’s No Longer Among the Living
• Frontier’s Goodbye Kiss: A $680 Final Bill for a Departing Customer
• Calabasas Residents Annoyed by “Corrupt and Deceptive” Charter Cable; Time Warner Cable Also Called Out
• Time Warner Cable Guy Arrives Late to Service Call, Leaves Claiming Homeowner Had “Bad Air”
• More Frontier Problems: Californians Wait Months on Refunds for Disconnected Landlines
• The Many Challenges of Charter Cable: Rate Increases for Seniors, Bankruptcy, Employees Attacked, Customers Hassled
• AT&T’s California Gold Rush: Company Lobbyists Spread the Money Far and Wide

“SB 1161 is a stealth vehicle for the gradual deregulation of telecommunications in California,” the Consumer Federation of California declared on their website. “Consumers need the CPUC to have the power to investigate complaints of bad service or unfair charges on bills, regardless of the technology used to provide phone service.”

Call to Action!

Consumers across California need to get on board immediately to stop S.B. 1611. You can file online opposition courtesy of Free Press, but it is far more effective to also directly phone your own legislator and leave a message to urge this bill be defeated. It literally takes only 2-3 minutes to call and the money and phone service you could save will be your own. Use this district finder to contact your representatives.

S.B. 1161 is scheduled for hearing in the Assembly Appropriations Committee this Wednesday, so time is of the essence!

An 85-year-old woman with dementia and her ailing 90-year-old husband in Rockaway were left without telephone service for three weeks because Verizon could not contact them on their out-of-service phone line.

The couple’s daughter, Rita Burgess, made at least 13 calls to Verizon Communications trying to get the couple’s phone line back up and running, but to no avail. A Verizon spokesperson later told the New York Daily News the company couldn’t get the line repaired because they couldn’t call the couple… on the phone line that was out of service.

“You people put me through hell,” Burgess thought after Verizon finally reached out to get the phone line repaired.

By then it was too late. Burgess took matters into her own hands and switched the family to Time Warner Cable’s phone service.

The incident has turned into a cause célèbre for consumer advocates, who claim Verizon continues to neglect its landline network in favor of its limited fiber optic FiOS service. New York consumer groups want the state to more aggressively regulate Verizon’s landline network to make certain extended outages like this cannot happen.

Burgess, who lives on Long Island, found herself cut off from her parents at a time when her father was hospitalized. Both father and daughter were unable to reach Mrs. Burgess, who requires regular attention because of dementia.

Bob Master, legislative and political director for the Communications Workers of America, told the Daily News the couple’s ordeal is not unique.

“They’re diverting resources from basic phone services,” Master said of Verizon. “That’s the business model, to divert resources to the most lucrative areas.”

Verizon counters the union is in dispute with the phone company over stalled contract negotiations and points to a 2012 first quarter report from the state Public Service Commission showing Verizon is meeting standards for reliability and repair times.

But Verizon has also lost half of its landline customers in New York State, which could also account for a declining number of complaints.

The Burgess family has decided to stick with Time Warner Cable for phone service.

The AARP was surprised to learn Idaho was considering loosening the rules imposed on the state’s phone companies to complete repairs on out of service landlines within 24 hours. The organization, which represents the elderly, says the new rules are a serious threat to older Idahoans who are the least likely to have a cell phone and require landlines in case of an emergency.

The Idaho Public Utilities Commission is considering relaxing regulations governing service outages at the behest of CenturyLink and Frontier Communications, two of the state’s largest phone companies. Both phone companies argue that consumers have cell phone alternatives and do not need rapid repair of landline service. The companies also do not want to face penalties from regulators over incomplete or delayed repairs to out of service landlines.

CenturyLink claims the declining number of landline customers justifies the reduced regulations on the state’s phone companies.

But the AARP argued otherwise in opposing comments filed last week:

• Give telephone companies twice as long to repair outages (from 24 hours to 48 hours), and even more time if they occur over the weekend.  Opposing the change, AARP reminds the PUC of the importance of landlines to the elderly, and the fact that home and health emergencies also occur over the weekend.
• Remove any penalties to telephone companies for not restoring service within the allotted period of time.  Currently if service is not restored within the repair interval, customers can receive a one month service credit.  AARP says removing the penalty leaves little incentive for timely repairs and erodes consumer protections.
• Lower benchmark for fixing outages. Currently, at least 90% of service outage reports must be fixed, the proposed changes would lower that to 80%.  AARP says the lower benchmark could mean more consumers going without crucial service for a longer period of time.

Other claims made by CenturyLink – such as the assertion that its ability to deploy broadband suffers because its personnel are unreasonably diverted to repair work – are unproven and largely irrelevant to its obligation to maintain reliable telephone services, says AARP.

The elderly advocacy group argues the little known case is one more example of the need for Idaho to establish a Utility Consumer Advocate Office to ensure residential consumers are represented in complex regulatory matters.  Idaho is the only state in the West without such an office and one of a handful nationwide.

Pendleton County, W.V.

Pendleton County, W.V. residents are frustrated by another landline service outage afflicting Frontier Communications in the eastern panhandle region of the state.

The latest disruption began early Friday morning, leaving limited phone service throughout the county, with customers unable to dial any number that was not within the local 249 exchange.

Customers found cell phone service spotty, as it traditionally always is in the county, leaving some with no way to communicate and frayed nerves.

WHSV-TV reports Rosa Propst was extremely upset by the outage which dragged on for nearly two days. Propst’s father was hospitalized in another county and medical personnel could not reach her to report her father’s deteriorating medical condition.

Her ill father was also upset because he could not reach his daughter — or just about anyone else in Pendleton County over the weekend.

“I would have held Frontier responsible for not giving us an emergency services line where we could get to a hospital or call the hospital,” Propst told the station.

Frontier eventually found the problem — a series of fiber cuts over the length of 1,000 feet of cable. A Frontier spokesperson said the company had to replace about 7,000 feet of cable and had to find workers willing to climb 40 foot telephone poles in what was characterized as a rugged area.

Customers complained this was not the first significant outage for Frontier customers in the area.

The company eventually repaired service early Sunday morning.

Frontier has been accused of lacking network redundancy, letting phone companies bypass damaged lines by switching to backup infrastructure.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WHSV Harrisonburg Customers in Pendleton County Frustrated Over Limited Phone Service 6-10-12.flv[/flv]

WHSV first reported the major service outage to viewers during the weekend local news, noting customers between Brandywine and Sugar Grove had lost landline service. (2 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WHSV Harrisonburg Family in Pendleton County Frustrated Over Phone Service 6-12-12.flv[/flv]

 In this second report, WHSV talks with the Propst family about the human impact extended service outages can have on customers.  (2 minutes)

AT&T seems to have suddenly discovered it has millions of rural customers who are making due with the company’s poorly-rated, slow speed DSL service AT&T pondered selling off to somebody else.

In a sudden turnaround, CEO Randall Stephenson has decided it might be better to upgrade the company’s service instead of ditching it altogether.

Stephenson’s apparent decision not to jettison rural AT&T landlines on the open market may have more to do with the current regulatory climate than what’s best for shareholders in the short term. AT&T may also find few buyers for the millions of rural landlines the company has no plans to upgrade to its U-verse fiber to the neighborhood platform. The most likely would-be buyers are preoccupied with their current operations:

• Frontier Communications, which purchased rural assets from Verizon Communications, is facing an enormous debt payment in 2013 and a declining stock price;
• FairPoint Communications, which owns former Verizon landlines in northern New England, is still trying to make its business plan work after an earlier bankruptcy filing;
• CenturyLink is still attempting to absorb former-Baby Bell Qwest into its network;
• Windstream may be too small to buy the millions of customers in multiple states AT&T seemed to no longer want until recently.

Stephenson told investors at a Sanford C. Bernstein conference that the company is now considering keeping its rural customers and upgrading DSL technology to better serve them.

A DSLAM reduces the amount of speed-slowing traditional copper phone wiring between the telephone company's "central office" (CO) and your home's DSL modem.

With 15 million AT&T customers having no prospect of getting AT&T’s U-verse service, and 5 million without any AT&T broadband options at all, Stephenson says investment in Internet Protocol Digital Subscriber Line Access Multiplexers, better-known as IP DSLAMs, could extend service and also improve speeds for existing DSL customers, and not cost the company a fortune.

Stephenson noted the cost of the equipment needed to extend service has dropped considerably, in part because demand for DSL has been in decline as customers seek faster broadband, often from cable operators. The two largest phone companies in the country — AT&T and Verizon — had also shown little interest in further expanding their DSL networks.

For a reasonable investment on service upgrades, AT&T could bring speeds of 10Mbps or more to certain customers who now live with 6Mbps or less.

The challenge AT&T faces is reducing the amount of legacy copper telephone wiring between the phone company’s switching office and the customer. Customers who live more than 10,000 feet from a central office make due with very slow DSL speeds. Replacing some of that copper wiring with fiber optics can dramatically increase speeds.

AT&T U-verse works on a similar concept, except AT&T’s most advanced service needs as little copper phone wiring as possible. AT&T’s newest proposal for its rural customers would represent a middle ground — extending fiber to a handful of DSLAMs at distant points from the central exchange, with copper phone wiring carrying the signal the rest of the way to the subscriber’s home. This would open the door to DSL for customers who could not purchase the service before. It would also boost speeds for existing customers.

The decision marks a departure from AT&T’s interest in “solving” the rural broadband problem with heavily usage-limited wireless Internet access over its 4G network. Verizon Wireless is currently testing its own wireless broadband service designed for home users, but it costs $60 and only provides 10GB per month of usage.

While Stephenson has not backed away completely from selling off rural customers outside of U-verse service areas, he told investors he now has a more optimistic view of AT&T’s rural folk in light of marketplace changes.

“We are giving this a hard look,” Stephenson told investors on a recent JPMorgan conference call. Already-available DSLAM technology “brings broadband capability in a more cost-effective manner, with a better revenue profile than perhaps we would have thought two years ago.”