Energy and Technology Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-447

Title:

AN ACT MODERNIZING THE STATE'S TELECOMMUNICATIONS LAWS.

Vote Date:

3/28/2012

Vote Action:

Joint Favorable

PH Date:

3/20/2012

File No.:

SPONSORS OF BILL:

Energy and Technology Committee

REASONS FOR BILL:

To address multiple matters related to the regulation of telecommunications providers and telephone companies in Connecticut: removes the requirement for filing certain tariffs with Public Utility Regulatory Authority (PURA), clarifies document filing and notification, elimination of paper filing, conditions for an audit for change in service provided, clarifies regulation of voice over Internet protocol service (VOIP), enables review of video providers, secures funding of specific programming, establishes formula to allocate funds for public access programming, authorizes out-of-state technicians to assist during certain emergencies and expands the radius for locating telecommunications cell towers.

RESPONSE FROM ADMINISTRATION/AGENCY:

Linda Roberts, Executive Director, Connecticut Siting Council strongly supports the bill. The bill is consistent with federal mandates in addressing issues of public need and the location of cellular facilities.

Kevin DelGobbo, Department of Environmental Protection, Public Utilities Regulatory Authority (PURA) supports the bill with modifications. “The listing of competitive and emerging competitive service rates, terms and conditions may not be sufficient. Adding Internet link should be setup to allow for service information to be clearly presented. Telecommunications companies are to provide annual description of services including rates, charges, terms and conditions. Eliminating paper copies is arbitrary as they still have use given work with stakeholders. Telephone companies' competitors are a potential source of better understanding what is going on in the marketplace. VOIP is considered an Informational service and not regulated by the Federal Communications Commission (FCC). “the PURA believes that this language clarifies the regulatory treatment of these services so that they are regulated consistent with the federal jurisdiction within Connecticut.” Agrees that providing electronic notification of termination of services is appropriate “given today's environment and the consumer's reliance on email. Also, that the Section addressing the review of video providers and public access programming is duplicative of House Bill # 5473 an Act Concerning Public Access Operations and the Periodic Review of Video Providers.

PURA recommends that the telecommunications providers guarantee the work of technicians it employs and that it is fully compliant with all relevant codes and standards. Portions of the legislation may conflict with DEEP policies covering forests, parks and leaves room for legal battles. Lastly, the legislation is inconsistent with Connecticut 23-21 requiring land that is sold or exchanged whereby an easement or interest is given be for ”additional land of at leased be of equal fair market value with reasonably equivalent use.”

NATURE AND SOURCES OF SUPPORT:

John Emra, Regional Vice President, AT&T (The Company) strongly supports the legislation, indicates that it is time to eliminate burdensome regulations. The tariffs increase the cost of doing business and are remnants of when the market was operated as a monopoly. AT&T provides an array of information which is accessible to customers and provides for a better comparison when looking at competitors. Having AT&T file tariffs in advance of their implementation gives its competitors advance notice of its plans. “Eliminating tariffs for telephone companies and certified providers would be joining with the federal government and other states (15 -20) that have eliminated the tariff filing. Also, the paper requirement is outdated and adds tens of thousands of dollars. It would be more environmentally friendly to eliminate the paper filing and the courts allow for electronic filling that have taken a similar action.” Elimination of the additional Connecticut audit requirement would help to reduce costs (cost currently $1 million) and reduce redundancy. New York eliminated a similar requirement 15 years ago. The Company requests that the imputation standard be eliminated as the assumption used to establish this policy has not come to pass. The expectation was that competitors would be using the AT &T network rather than their own network and that AT&T would be prohibited from offering any service at a retail price which is lower than the wholesale price of purchasing the piece parts of AT&T's network. Connecticut has a unique imputation standard which (offers a discount of 25.4 % at one of the highest in the United States

They support (Section 4) of the bill as it eliminates an artificial floor that allows “competitors to under price their offerings.” Requiring the PURA review prior to change in offerings for companies such as AT&T creates” an unlevel playing field” similar to requiring a grocery store to keep products that only a handful of people bought once per year.” Many states including neighboring states have ratified bills with similar clauses. Provisions to eliminate the PURA review (requirement) prior to eliminating offerings does not enable the company to address the “rapidly changing telecommunications market and remove old plans.” Modifications under this bill would enable certain improvements including improved customer service and price reduction. Generally supports underlying provisions of bill, but in Section 10 concerned about reviews going forward.

Supports (Section 12) the waiver of additional training for out of state AT&T workers (but does not exempt contractors) that are brought in to assist in the case of a natural disaster as declared under Section 28-9 for which a Presidential declaration has been issued. The company is supportive of this section because it is less burdensome and allows AT&T workers that can demonstrate they have relevant training and experience to receive a waiver. At the federal level the 'shot clock order' requires decisions for cell towers be made within five months. However, Connecticut's deadline is actually extended by one month. The Company also notes that the environmental impact of cell towers and their location should be contingent upon efforts to remediate any such impact rather than blanket denial of location in watershed, state parks or forests as opposed to building a tower in a neighborhood. Agrees with Section 19 as this would free up land, add revenue to state from leased land. Siting Council would still need to give approval.

Ed Lazarus, Branford Chamber of Commerce supports the bill. It would increase competitiveness and increase customer service, allows for modernization and reduces burdensome regulations. Specifically, this could “free up resources for increasing broadband and wireless investments and hiring new employees.”

Sheldon F. Fill, President, Cheshire Chamber of Commerce (CCC)

represents 350 businesses. CCC supports this bill and notes that it will reduce the cost of doing business and “create a better business climate in the state. This will help other businesses that use technology.

Ryan J. Bingham, Mayor, City of Torrington. Supports the bill, as it would update outdated infrastructure and create jobs. The tariff system is obsolete.

John Giafardino, Cranbury Service Station, Norwalk supports the legislation. The practices that this works to change will be beneficial for the growth of Connecticut businesses. This will jump-start Connecticut and create jobs.

David S. Cigngari, President, David Soundview Catering supports the bill. It offers a common sense approach to reduce regulation. Small businesses are very susceptible to small fluctuations and costs that companies incur are passed onto consumers in their weekly bills.

Hance Henry, Senior Fellow, Discover Institute is a nonprofit think tank and supports this bill. Numerous states have revamped their telecommunications laws, most notably is Indiana with sweeping legislation that has made comprehensive changes, building infrastructure, eliminating restrictive laws and providing opportunities for job creation. The federal deregulation bill of 1996 was “to remove legal barriers to competition, and wireless providers, cable operators and others now compete to provide voice service. However, in Connecticut companies have been required “to maintain single-purpose voice networks, when voice can be delivered over multi-functional broadband platforms at lower costs.” This has actually forced consumers to subsidize legacy networks through wireless and VOIP customer and reduce investments in new technology. The Federal Communications Commission study recommends replacing the traditional circuit-switched telephone network with IP-enabled networks.

East Hartford Chamber of Commerce, Greater Danbury Chamber, Edward J. Musante, Jr., Greater Norwalk Chamber of Commerce supports this legislation and moves forward to the 21st century,” must avoid excessive, redundant regulation.” Connecticut must move forward for job creation and attract investment for the next generation of technology.

Lou Golden, President, Junior Achievement of Southwest New England is dedicated to assisting young people in developing the knowledge and skills to compete in a global economy. Supports this bill. Investing in technologies by rolling back restrictive regulations will provide the technology to increase wireless services and broadband to Connecticut homes and provide increased technologies for youth.

Netwolfe Technology Consulting, Inc. supports this legislation. Passing this legislation is the best way to support business; the state audit and antiquated regulations ought to be eliminated. “The industry looks very differently” and Connecticut must adapt if it is to compete.

Paul Cianelli, President and Chief Executive Officer, New England Cable & Telecommunications Association, Inc. supports the bill. It affirms the current treatment of VoIP, provides a popular alternative resulting in increased quality, additional features and lower prices; increases competition, provides a substantial savings to consumers, makes a significant investment in Connecticut's infrastructure and increases job opportunities which result in Connecticut becoming a leader in the industry.

21 states have enacted legislation similar to Connecticut's including MA, NJ & RI. The legislation preserves critical consumer support features including E-911, Lifeline, universal service support, TRS for hearing impaired & other consumer protection laws and reaffirms the legislature's role in directing policy on VoIP.

Paulette Fox, Executive Director, Opportunities Industrialization Center (OIC) of New Britain, Inc. is committed to serving disengaged youth and adults. OIC supports this bill, as it will promote investment in technology and spur job growth.

Madison Chamber, Shoreline Chambers Government Relations Committee supports the bill and although some headway has been made the state is still lagging and this would help to overturn a restrictive environment.

Candice L. Corcione, Executive Director, Tolland County Chamber of Commerce, established for 50 years with a membership of 400 businesses and professionals supports the bill. The Connecticut economy is turning around but there needs to be more momentum. The turnaround could result in jobs right in Tolland.

Lynn G. Ward, President and CEO, Waterbury Regional Chamber spans the Waterbury area to Litchfield covering 13 towns with a collective membership of 1,000. Supports the bill as it could spur Connecticut' economy and positively impact multiple sectors.

James A. Queen, Unit Director, Boys & Girls Club of the Lower Naugatuck Valley, supports this bill as it will help to promote economic stability and build stronger communities.

Paul S.Timpanelli, President and CEO, Bridgeport Regional Business Council (the Council) is a membership organization focused on economic growth and tourism. The Council supports this bill as “employment growth has been stagnant over the past two decades.” Lawmakers must do more as residents are moving out of state to find employment.

Michael Schroeder, President and Chief Executive Officer, Central Connecticut Communications, LLC (publishes the New Britain Herald and Bristol Press) supports the legislation. If he had to continue to run his business based on old technology he would not be able to compete.

Attorney Christopher B. Fisher, Cuddy & Feder, LLP supports the bill and has represented companies that construct or, own or operate cell towers in Connecticut. Agrees with Section I, as this would bring the State into agreement with federal law. Also notes, Section 14-18 would address the location of cell towers on state forests, parks and watershed areas as an alternative to towers on private property in rural areas. He further cites a speech by President Barack Obama in 2011 “virtually all Americans to have access to the latest high speed technologies.”

President, Del-Tron Precision, Inc. supports the bill. The company is an innovative, high quality enterprise that provides reasonably prices anti-friction linear bearings. This will enable new investment to come into the state, to jump-start the economy and eliminate stagnation, which he can not afford as a business owner.

Michael Devine, President, Earth Energy Alliance supports the bill as it will be beneficial in conservation efforts. “Reduce the outdated system of mandatory paper filling saving countless trees and energy resources.” Using e-file and paper filling creates twice the work.

Alice M. Forrester, PhD, Executive Director, Clifford Beers Clinic supports this bill. The agency serves children and families from 32 towns in the Greater New Haven area providing out-patient behavioral health services for children 3-18.

East of the River Chamber of Commerce Association (ECCA) represents 2,500 businesses and supports the bill. They acknowledge that “outdated laws have led to unnecessary audits and mountains of repetitive paperwork.”

Anthony Rescigno, President, Greater New Haven Chamber of Commerce (GNHCC) represents businesses in Bethany, Branford, Cheshire, East Haven, Guilford, Hamden, Madison, Milford, New Haven, North Branford, North Haven, Orange, Wallingford, West Haven and Woodbridge. GNHCC supports this bill as it acknowledges the state has experienced “zero job growth over the last 20 years” and this bill is expected to help promote investment in infrastructure and job creation.

William E. Purcell, President, The Greater Valley Chamber of Commerce represents Ansonia, Beacon Falls, Derby, Seymour, Shelton and Oxford. Supports the bill and states that excessive regulation at all levels adds time and expenses and often little benefit to the economy or job growth.

MetroHartford Alliance (MHA) includes businesses of all sizes and disciplines. MHA supports the bill as it would free up capital and help promote Next Generation technology and assist the capitol as they compete for jobs, capital and talent.

William F. Millerick, President, Great New Britain Chamber of Commerce supports the bill. This would benefit “all businesses and sectors that use telecommunications technology as they experience from reduced service costs, this will put that money back into our local economy.”

JoAnn Ryan, President & CEO, Northwest Connecticut's Chamber represents almost 800 businesses and organizations. As the goal of the Chamber is to promote prosperity within the region, this bill will benefit all industries and enhance the business climate.

John P. Condlin, President & CEO, Stamford Chamber of Commerce supports the bill as it will be good for the local economy and the state of Connecticut. This bill will save telecom companies money by eliminating tariffs, allow them to redistribute the money to improve networks and hire new employees.

Keefe B. Clemons, General Counsel, Northeast Region, Verizon strongly supports the legislation. “The existing regulatory framework imposes unnecessary and burdensome requirements. Regulations were written when there was one company; they have not kept pace. “Today Verizon has lost over half of its customers to alternative providers that are not regulated to the degree that Verizon's wireline operations are.” Existing social programs including 911, Lifeline and hearing and speech impaired services will remain in place.

Several organizations showed significant financial investment and job numbers including the Communications Workers of America (projected 100,000 based on $5 billion), the Information Technology and Innovation ($10 billion of investment to 498,000 new or retained jobs), and the Brookings Institution (300,000 private non-farm jobs). In 2006 Indiana, was one of the first states to modernize telecom and video regulations and noted investments of $400 million to generate thousands of jobs.”

Roger A. Adams, President, The Chamber of Commerce, Inc., Winham Region supports the bill. “Elimination of cumbersome telecommunications regulations can help fight job loss.” This will help employers to invest in Connecticut helping consumers and employers.

NATURE AND SOURCES OF OPPOSITION:

John Murphy, Connecticut Citizens Action Group (CCAG) is a 20,000 member organization. CCAG opposes portions of the bill. Indicates that the title of bill is misleading, believes that watershed, forests and parks should be protected, but land that is not protected should be considered for towers; disagrees that a customer service manual is sufficient as opposed to having tariffs filed and that we are giving up many of protections of oversight through PURA and the ability of the Office of Consumer Counsel to fight for what's right for Connecticut's consumers.”

Shirley Bergert, Managing Attorney Public Benefits Unit, Connecticut Legal Services opposes the bill, particularly Section 8. It creates “unnecessary dangers for vulnerable individuals.” Changes in how consumers access services could result in some of the dangers such as: risk of fire, inability to maintain sanitary environment and loss of refrigerated foods. Using email to supplement a written shut-off notice could be advantageous, but to send

an email and no paper document at this time creates a risk for low-income persons even if they relied on public computers to access such information.

Sound View Community Media, Inc. opposes the bill. The company specifically takes issue with Sections 10 and 11 of the bill as “it gives preference to certain types of programming.” Section 11, removes the ability of the community access manager to adjust for differences in shifts in the needs of the various service areas.” Includes an informational sheet with nine points as to why the bill would harm Sound View and other community access centers and why others would support the bill. The primary concern is that the funding is diverted from the “entire public programming into a very specific type of program.”

William F. Henderson, III, President, Local 1298, Communications Workers of America opposes the bill. The Local represents 4,000 workers across New England. There has been a drastic transformation of the business sector and AT&T.” They lack confidence in AT&T and without regulation, believe that the company will not serve the community or its employees any better.

Stating that even with the existing oversight that AT&T still manages to put its workers “through the meat grinder.” Performance standards should not be lower to accommodate AT&T. The company should step up to meet the standards. Using out-of-state contracts continues to erode the Connecticut workforce and reduce jobs for local citizens. They attached AT&T's Semi-Annual Performance Report (July 2010 – December 2010) which indicates that the company has exceeded the minimum performance standard each month for the Reports Per Hundred Lines (RPHL) measure.” Also included is data on the Wire Center RPHL Results by town for the same period. Maintenance and installation data for four administrative areas and statewide data show measures exceeded. Also, enclosed is “84 Months of AT&T Excuses” with explanations as to why measures have not been met for February 2001 – June 2008 along with job titles and twelve year staffing data.

Reported by: Laurel Ann Coleman, Assistant Clerk

Date: April 16, 2012