CPUC Votes 4-1 to Oppose California LifeLine Bill

"I don’t see the point of going down in flames,” CPUC President Michael Peevey told colleagues. He was the sole dissenting voice arguing against opposition. Instead he suggested the CPUC advocate for eight bill amendments and a “support if amended” position, which he called “a better stance” and “more tactical."

AB-1407 received its first reading in March, passed unanimously out of the Assembly May 23 and is slated for a hearing before the Senate Committee on Energy, Utilities and Communications on Tuesday. It proposes to adjust the Moore Universal Telephone Service Act and sets specific parameters for discounts. “Through and including December 31, 2014, the nonrecurring service charge for commencing voice service for a single voice connection for a lifeline customer be no greater than $10,” said the legislative counsel’s digest attached to the bill text (http://bit.ly/11NWqv9). “Until and including December 31, 2014, the lifeline provider would be eligible for reimbursement from the fund for the difference between the nonrecurring charge paid by a lifeline subscriber and the nonrecurring charge the lifeline provider charges for identical services in the ordinary course of business to subscribers that are not eligible customers, subject to the limitation that the reimbursement can be no more than $40 per connection.” The CPUC would have some discretion to increase those amounts after, it said.

The bill worried Peevey in much the same way it did his colleagues: “I wish the bill hadn’t been introduced, personally, honestly,” he said. “But that’s not the reality.” The CPUC has a “rocky relationship” with the Legislature, and opposing the bill would “annoy” key legislators, especially given that AB-1407 sponsor Assembly member Steven Bradford (D) is a “significant player,” said Peevey. He saw this discussion as “a replay” of last year’s debate over Senate Bill 1161 (CD Oct 2 p7), which was passed and bars the CPUC from regulating VoIP, he said.

"I bear the tread marks of that bus that ran right over us,” Commissioner Mark Ferron said of SB-1161. The problem with the bill was that the CPUC didn’t “take a clear position in opposition,” he said. The CPUC should be “very clear” that it cannot support AB 1407 in its current form, he said.

"I was disappointed to learn of the PUC’s decision to oppose my bill, AB 1407,” said Bradford in a written statement Friday. “We have engaged with numerous stakeholders -- including the author of the original Lifeline law, former Assembly member Gwen Moore, the PUC, the NAACP, the Mexican American Legal Defense and Education Fund (MALDEF), and ratepayer advocates -- and we are all in agreement that the Lifeline program needs to adjust to changes in technology. We will continue to engage them as this bill moves forward.” Bradford chairs the Assembly Committee on Utilities and Commerce. He framed the bill as modernizing the LifeLine program “to ensure low-income consumers can access wireless and voice over internet protocol services and other emerging technologies.” These changes should help open LifeLine to “millions of low-income Californians” and reflect “rapid changes in consumer preference,” Bradford said.

But the opposing commissioners argued that AB-1407 had the potential to wipe out the work the CPUC has already done with the goal of reforming California’s Lifeline program. The CPUC passed a decision on basic service in December, which paved the way for reforming Lifeline in 2013, Commissioner Catherine Sandoval explained. The CPUC is looking at “new discount levels; expanding the services eligible for the discount, including wireless Lifeline service, Voice Over Internet Protocol (VoIP), and other non-traditional services, and what these services might include; continued support for application of discounts to installation charges; pros and cons of pre-qualification of potential Lifeline customers,” said its online page on the proceeding. It has already held multiple public participation hearings on these topics around the state and plans several more through August.

Sandoval pledged to have a proposed decision in that Lifeline proceeding by October, which would then be open for comment for 30 days. “I am confident that we can decide on the proposed decision before Thanksgiving,” Sandoval said. “We can decide in early November.” She outlined several substantial concerns with AB-1407 and argued that it would limit consumer protections, limit the CPUC’s ability to hold Lifeline providers accountable and hurt consumers’ access to 800 and toll-free numbers, which often cover suicide and domestic disturbance lines. The CPUC proceeding would reform Lifeline “six months to a year faster than this bill,” she said. “I would argue the CPUC has a very good process under way.” The CPUC “should be able to continue that process,” said Sandoval.

"We would get a faster time to market if we continue on the current path, which is our own proceeding,” Ferron added. The bill’s passage would ultimately send the CPUC’s basic service proceeding and decision “to the trash bin,” he said. Commissioner Michel Florio also judged the bill “very frustrating,” he said. “This bill would eviscerate all that hard work,” he said of the CPUC’s past proceeding. “The timing issue is very critical here.” He urged Bradford to extend the process and see what decision the CPUC comes up with rather than pursue what he called a “backwards” process now. The bill would prove “incredibly more restrictive” on the CPUC and make the program “a copycat of the federal program” without attending to any “California-specific needs,” he added. Bradford sponsored the bill due to frustrations with the CPUC’s slowness in the basic service proceeding, but Sandoval is moving forward with the Lifeline proceeding “with alacrity,” he said.

Florio and Commissioner Carla Peterman said they appreciated Peevey’s attempt at amendments but disagreed they cured the substance of the problems. The bill also inspired considerable public comment at the start of the meeting. By Peevey’s count, there were 30 speakers on the bill, 16 in favor and 14 opposed.