Relates to regulation of telecommunications and cable services

Summary of specific provisions

Section 1 entitles this measure the "Telecommunications Modernization Act of 2012."

Section 2 adds three new paragraphs to Public Service Law § 5 that are intended to streamline the regulatory oversight of telephone corporations serving customers where there is competition between two or more voice services providers for those customers. This section would define the new authority of the Public Service Commission in geographic areas of the state where a minimum of two services providers compete. In areas where no competition exists, providers would follow existing PSL.

Section 3 amends Public Service Law § 2 to define "voice over Internet protocol Services" and "Internet protocol-Enabled Services" and precludes their regulation by the public Service Commission, except for limited exceptions such as 911 services and Relay Services, Also provides that such services shall be covered by state consumer protection laws.

The telecommunications sector has been battered in recent years, with tens of thousands of jobs lost. VoIP is this sector's best hope to reestablish growth, No other trend within the industry can attract the venture capital needed to establish VoIP as a mass-market product. This venture capital will fund the investment, development, and roll-out of new services that are all pre-conditions for job creation-- but only if New York State affirms now that it will not tie this promising technology down with regulations designed for other technologies. Providers believe that if regulators try to extend existing policies to this new technology, the climate for investment and development will be greatly chilled.

VoIP services further a number of state policy goals including: increasing broadband adoption, spurring investment in the telecommunications sector, and bolstering the state's competitiveness. VoIP services drive broadband adoption since high speed Internet access is a prerequisite for using the service.

Finally, various states are ahead of New York in the deployment of new technologies, job creation and economic investment by exempting VoIP from state regulation. District of Columbia and 16 states have done

just that: AL, DE, FL, GA, IL, IN, KY, MA, MD, MO, NJ, OH, PA, RI, TN, and VA.

Section 6 adds a new Public Service Law § 92-g, would eliminate the requirement that telephone companies whom are certified telecommunications providers file tariffs for their services with the Public Service Commission. Today, a small number of the providers in the marketplace file and maintain tariffs with the PSC which describe an individual service offering and the rates its charges for such an offering. These tariff requirements are a vestige of the monopoly era of telecommunications when the PSC was charged with overseeing and regulating monopoly providers. Today the marketplace is fully open to competition and most of the providers in the market, including the largest providers, are not required to file or maintain tariffs. These other providers instead have an agreement between themselves and their customer.

Today, as a matter of good service, traditional telephone providers communicate the parameters of the services their customers choose by means of scripts, welcome packages, bills, and other collateral. This information is more accessible to customers than tariffs, and more similar to the materials provided by our competitors, thus better facilitating competitive comparison. Drafting, filing, and maintaining tariff databases is an additional layer of communication, not typically relied on by customers, and constituting an administrative burden for certain companies.

Section 7 provides for an immediate effective date.

Justification

This legislation is intended to promote competition, innovation, investment and consumer value in New York State's telecommunications industry.

Sound public policy favors allowing a robust and competitive market to determine pricing and other terms and conditions of service. Under current law, different providers of telecommunications services are subject to differential regulation by the Public Service Commission. This offers a competitive advantage that is not based on superior price, quality, or reputation, but simply on differential governmental choices.

Such regulatory asymmetries are inimical to true competition, which demands a level playing field. They also undermine the benefits of competition, which include enhanced efficiency, innovation, and increased consumer satisfaction.

Fair and robust competition in the provision of telecommunications services will result in more telephone, video and Internet choices for the state's consumers.

This legislation is necessary because the Public Service Law does not adequately reflect the current realities of the market for the services provided by regulated telephone corporations and cable operators. Unnecessary regulation increases the costs of doing business in the State, restraining capital deployment and inhibiting investment.

Modernizing New York State's telecommunications regulatory structure by adopting a uniform framework will promote additional investment in telecommunications infrastructure by existing and new providers. The changes effected by this legislation will serve as an incentives for investment and increased employment in the State, supporting the State's economy and making the State more competitive with other states.

Legislative history

None. This is new legislation.

Fiscal implications

EFFECTIVE DATE: Immediately upon becoming law.