Gordon Moore, the visionary Californian and co-founder of Intel, famously conceived Moore's Law, which generally states that the speed and scale of technological innovation doubles every two years.
Government simply can't keep up with that pace and must employ the mantra of first do no harm or risk the nimble and dynamic nature of technology.
This is especially true for California, the epicenter of the innovation economy, where the growth of industry leaders like Apple, Facebook and Google are as intrinsic to our state's identity and as vital to the economy as Ford and GM are to Michigan's.
Today, California's technology sector stands at a crossroads. As we speak, the Legislature is considering an important bill to maintain the status quo of Internet freedom. It will ensure state government regulators are not allowed to impose new piecemeal barriers to online services and innovation.
Authored by state Sen. Alex Padilla, Senate Bill 1161 continues the state's "do not harm" policy first enunciated by the Public Utilities Commission in 2005 to keep Internet-based communications, including Voice over Internet Protocol (VoIP) free from PUC regulation.
VoIP uses the Internet rather than the decades-old copper networks to carry voice calls. VoIP enables Californians to call family and friends in other states, or even other countries, for much lower cost and can even eliminate monthly phone bills entirely. It also allows for much richer communications overall such as FaceTime or Skype calls that allow grandparents to see the grandkids and military families to connect with their loved ones overseas.
These technologies are being driven by innovation and consumer demand. And they are creating jobs. According to a recent study by TechNet, these and other technologies in the "app economy" are responsible for more than 110,000 new California jobs in the last four years.
The tech sector is concerned by the threat of regulation of this thriving, innovative market for Internet-based communications that is totally unlike the monopoly of copper wires the Bell system created a century ago. Today, dozens of VoIP providers and hundreds of Internet-based communications offerings give consumers a multitude of choices. Monopoly-era regulation on this dynamic sector by the PUC which took seven years to approve caller ID could chill investment and put California's leadership at risk.
Continuing current policies does not mean that consumers will go unprotected. On the contrary, consumers who choose to subscribe to voice service through a broadband connection, such as VoIP, will still have federal and state consumer protections. These include requirements to provide 911 service, make facilities accessible to disabled users, protect customers' private records and educate customers of backup power needs. The Federal Communications Commission continues to monitor the market and apply new requirements on VoIP as needed, and the Legislature also can authorize additional state protections, as it has since 2006.
In addition, SB 1161 does not eliminate any existing regulation, or prohibit any future PUC regulation, of traditional telephone service through a landline connection. The bill makes no change to universal service and "carrier of last resort" laws, which designate a local exchange carrier for every part of the state that is required to provide traditional landline voice service to any customer upon request and to provide lifeline service to all eligible low-income customers.
The current framework works with deference to the FCC, and the Legislature granting the PUC authority as needed. When concerns arise, the tech industry has a proven record of working with stakeholders to help solve them. For example, when concerns arose that the move to VoIP services might reduce funding for the 911 network, the tech sector agreed to fees on VoIP to maintain the funding. When the Legislature decided last year to impose fees to support public services programs like universal service, the tech industry again supported the legislation.
With California's technology leadership on the line, our legislators should be careful and think twice before California changes course. SB 1161's careful balance will ensure that the Legislature can address any issues while giving investors the confidence they need to continue to invest and keep one of California's most exciting job-creating industries on track.