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, ~ AB 2987 (NUNEZ/LEVINE): WHY THIS BILL NEEDS WORK AB 2987 (Nunez/Levine) would create a new according to a phasing plan whereby phases statewide franchise for cable and video service alternate between higher-income areas and lower- providers, issued by the California Department of income areas and between urban and rural areas. Consumer Affairs. The bill's supporters claim that AB 2987 will guarantee "speed to market" for Customer Service telephone companies that want to offer video services that compete with cable companies. Problem: Local agencies typically adopt and They argue that increased competition will offer enforce consumer protection/customer service consumers lower rates and better service. standards. The Federal Communications Com- mission (FCC) has also established model cus- The League of California Cities supports tomer service standards that are not mandatory competition and a streamlined approach to fran- but which many local agencies adopt or supple- chising. But we are greatly concerned over a ment. Local agencies use a variety of enforce- number of problems in AS 2987 that the authors ment tools ranging from informal intervention have yet to address. when customers have problems to imposition of liquidated damages or civil penalties to franchise The following summary identifies issues, and termination. possible amendments to address these concerns: AB 2987 pre-empts local customer service Discrimination/Build-OutlRedlining standards, preserving only the more limited state standards. As amended, the bill requires local Problem: Access to telephone service is agencies to enforce the standards and authorizes available to all Californians, regardless of income the imposition of liquidated damages, but pre- levels and regardless of whether they live in urban empts franchise termination as a remedy. In other or rural areas, not due to market forces but be- words, the bill gives local agencies the responsi- cause it was required by the state. Cable service bility for ensuring consumer protection with little is available throughout most cities not because of real authority. market forces but because it was required as part of the local franchising process. Solution. Leave in place local agency author- ity to adopt customer service standards; at a AB 2987 prohibits discrimination on the basis minimum, adopt the FCC standards as state of income, but only contains vague legislative standards. Leave in place local authority to intent language concerning build-out. It pre-empts enforce those standards, including franchise local build-out requirements and is silent on termination in extreme cases. statewide build-out issues. AT&T has a business build-out strategy that deoends upon cherry- Rights-of-Way Management picking. Problem: AB 2987 contains confusing and Solution: Amend the bill to require that state conflicting language about who controls the public franchises must provide the same land line-based rights-of-way. Proposed section 53058.7 provides broadband service throughout each local jurisdic- that a state franchisee can install a network within tion within a speCified number of years of providing public rights-of-way under the same terms and the service to the first customer within that juris- conditions applicable to telephone corporations. diction. Provide that state franchisees must offer This is completely inconsistent with the remainder the same land line-based broadband service of the bill, as it means that video providers can throughout their telephone service territory within provide services pursuant to Public Utilities Code the state within a specified number of years. section 7901 without obtaining a franchise, paying Deployment throughout the state must occur franchise fees, etc. Continued on Page 3 PAGE 2 . PRIORITY FOCUS Visit the league's Official Website..www.cacities.org June 2, 2006 . Issue #22 .....--..,