Yesterday I attended the hearing session for HF985…

HF985 (Johnson) Telecommunications enforcement authority clarified, new requirements for tariffs added, proprietary information protected, criteria for certificates of authority specified, alternative regulation plans terminated, definitions added, technical corrections made, obsolete provisions removed, and conforming changes made.

The hearing was informational only. It was interesting to hear the different parties present the issues. I’m going to leave my notes pretty much asis with the understanding that the video is here to fill in the blanks.

Bill summary:

A rewrite of Chapter 237. It’s an effort to modernize telecommunications policy – in the words since the breakup of the bell companies. There are 25 sections of the bill. Many are repealed:

1-7 – includes definitions; basic service is a one unbundled single line (aka POTS)

8 – effective July 1, 2019 – Commerce duties are transferred to PUC.

2-3 – telecos can provide reduced rates  to schools, gov agencies t al

9 – basic telecommunications services at reduced rates

11 – Telecos charging ICC fees will continue to file tariffs but may also create contracts with providers

12-16 – PUC’s power in terms of investigation, complaint investigation,

15 – PUC find wholesale service, establishment of rate and price,

16- 17 – confidentiality, discrimination prohibited / information subject to protective order

18 – allows LEC who has not been compensated by another provide to discontinue providing service

19 – telecos can’t slam (changing a user’s local exchange carrier without the user’s permission)

20 – Assessment of costs

21 – how advanced service providers will assess charges (for hard of hearing and low income services)

22- sets fee to serve them

23- no more third-party charges on end customer bills

24 – certification, registration & mapping – Advanced providers must register with Commission

25 – Related to AFOR (alternative forms of regulation). AFORs gives greater flexibility to regulators-providers negations.

We will work on this in the interim and talk about it in 2014.

Testimony

Scott Bowler with Frontier

Serve 190,000 lines in MN; we support the bill

7.25 million lines in Minnesota

4.25 are wireless;

1 million are cable or VoIP;

1.5 million are provided by ILECs

Right now only ILECs are regulated

There is a robust, competitive marketplace; the state law should reflect this.

This might be a deregulatory bill – but the industry has taken the lead when most of the providers are not beholden to regulation.

Other providers obtain wholesale services from ILECs. This has been done with ICC.  The FCC regulates most of those responsibilities.

Other states has taken similar steps with no negative impact on customers.

QUESTIONS

So is Commerce going to give up regulation?

Yes.

How do we make sure there is transparency?

This won’t affect USF or other charges.

Brent Christensen – MN Telecom Alliance

Represents more than 70 independent providers

Consumers have a choice now. Less than half of this group has a landline and that’s indicative of the state.

The breakup of AT&T, the 1996 Telecom Act has brought about changes but Minnesota has not kept up. The industry has changed.

User charges that used to be controlled by PUC.

I have three numbers coming to my smartphone

–          landline – regulated by FCC, PUC & Commerce

–          Cell number –regulated by FCC

–          Google Voice isn’t regulated at all

This bill maintains oversight between wholesale transactions; it maintains basic phone service for folks who need it.

We will continue to work with industry and consumer groups on this bill.

QUESTIONS

Who are major stakeholders?

Wireless providers, CLECs, cable, VOIP providers, Commerce, PUC.

How many states have made this change?

10 states have enacted legation or are working on it. WI, IA, IL, IN are working or have worked on this. The FCC’s plans have spurred action.

Tariff is related to service fees, which is regulated by FCC.

Does this regulate in broadband areas too?

Broadband is not regulated; it’s regulated by FCC. There’s a distinction between the broadband pipe and the VoIP services that run over broadband.

How does this relate to last mile broadband?

You’ve got broadband that comes to your home – over that you get a range of services such as TV, phone, and access to the Internet. Those three services are regulated very differently. We’re looking only at telephone services.

Peter Brickwedde – Department of Commerce (Department of Government Affairs)

The Department has been working on this for several years.

We’ve been working with MTA and hope that continues. We may have differences but work together.

Concerns:

The State does need to modernize. But that does not mean deregulate. We want to focus on consumer protections.

The FCC is not settled yet. The situation is still fluid. We will continue to monitor.

QUESTIONS

What are your concerns?

Basic service – narrowing the definition is a primary concern

Not having a regulatory entity at the state level to turn to is a concern

A venue and method for complaints are concerns.

Who is regulated and how?

We could put together info to share after hearing. Otherwise I think folks have covered

State regulated traditional wired services and

Wireless is regulated at federal level.

Non-traditional services (cable) regulated at local and federal level.

There is a distinction between phone service and broadband. And the FCC is moving towards a broadband world of regulation.

When do you think things will be settled (at FCC)?

It is difficult to know. And it’s a good reason to really examine the landscape. A flexible regulation scheme that is not tied to technology will be helpful.

We expect movement later this year.

There seems to be some concern about pricing. Is that due to last of oversight?

That is the broad concern. We are trying to highlight the possibility of cost going up and consumers having nowhere to go to complain.

Wouldn’t the PUC take the complaints?

The concern is that under the current process the PUC take complaints and the Department of Commerce investigates. This bill would eliminate that review. The FCC is setting some rates – but the details will be the tricky part and how does the State protect.

And pricing fixing there’s concern over mergers?

Those issues are addressed in research notes – Commission will be addresses in PUC.

The state will not be protect consumers in mergers as we did with CenturyLink – Qwest merger.

Are there issues with losing state regulation?

Without Department of Commerce & PUC having jurisdiction a small business would not have a state-based recourse if they were having problems with their services.

Brent –

If someone has a compliant now, they file with PUC. Department of Commerce investigates complaints with PUC. This bill would eliminate some of that now and by 2014. We’re no longer monopolies. We’re regulated by the consumer. They have choices. Businesses with 4 lines or more are already deregulated.

The reason for July 1, 2019 date – PUC & Commerce not regulate local service rates and access changes (long distance payments to local providers) but the FCC essentially takes these off the tables by the FCC.

Call completion is a big issue for us – but it’s up to the provider who will work with the FCC or do a workaround.

Dan Lipshultz – Larson Baudette (represents CLECs – such as Integra)

–          ILEC – incumbent local exchange carrier – traditional phone companies (such as US West)

–          CLEC – competitive local exchange carrier – new providers (post 1996)

Our retail services are regulated by PUC.

Our clients believe the best protection for consumers is competition.

First broadband service was DSL. It was invested by bell monopoly. First providers was a CLEC.

The consumer – think about your office. You have a phone and laptop. Both are hardwired and connected to Internet. Every business has a hardwired phone and computer. Your phone and broadband are coming from ILEC or cable. We rely on landline service for voice and broadband.

It’s the pipe that matters. We need a statute that supports open market, which means opening up the pipes. It will never make sense to rebuild infrastructure time and time again.

A large ILEC will try to keep competitors out. Every company wants to be a monopoly. TO protect the consumer we need regulators to make sure the pipes are available to everyone.