Overhaul Telecom, Expand Broadband

§2. Legislative Findings.

§ 3. Amends the public authorities law by adding Article 11 to create the New York State Broadband Development Authority.

§4. Amends the public service law by adding a new section 92-g to create the Universal, Affordable and Secure Telecommunications Services Fund.

§5. Amends the public authorities law by adding a new article 11-A to create a statewide cable franchise.

§ 6. Amends § 215 of the public service law to require that cable franchises submit a "neutrality report."

§7. Amends § 99 of the public service law by adding a new section on anti-discrimination of service provisions.

§8. Amends the general business law by adding a new section 349-b-1 on VOIP 911 disclosure. §9-10. Amends the public service law on telecommunications mergers. § 11. Amends the executive law on state Agency Telecommunications Resource Management.

§ 12. Amends the executive law on State Authorities Telecommunications Resource Management. §13. Amends the public service law to require that the PSC complete a study on the effects of telecommunications mergers on universal service.

§ 14. Amends the public service law to require that the PSC complete a study on the effects of any proposed sale of telecommunications networks on universal service.

§ 15. Amends the public authorities law to require a report on Broadband Deployment.

§ 16. Amends the public service law to require the PSC perform a study on 911 Emergency Services. §17. Amends the public service law to require that the PSC perform a study on consumer protections in wireless telecommunications services.

§ 18 Amends the public service law to study and then implement service quality standards for all telecommunications providers.

§ 19. Applicability of other law. 20. Severability.

§ 21. Effective date.

Justification

The State has a responsibility, as a matter of public safety and consumer protection, to promote safe, reliable and affordable telecommunications services. This bill, therefore, has several goals including:

*guaranteeing that all New Yorkers are offered quality telecommunications services at just and reasonable rates;

*bridging the ever-widening chasm of the digital divide in rural, high cost and low income areas;

*promoting the deployment of high-capacity broadband networks throughout New York State through the use of public-private partnerships which will help to remove the barriers to development of universally deployed world-class high-capacity broadband networks; and

*increasing competition in cable television services across the State, resulting in increased investment in the state, lower prices and improved service offerings for consumers, while still preserving municipal power to manage public rights of way and their ability to collect a franchise fee and administer public Education and Government access channels.

To reform the telecommunications industry in New York State to ensure consumer protections and public safety by providing telecommunications access for all New Yorkers, we need a strong and fundamental reform of the entire system. This bill begins that process. A comprehensive plan is needed to lead the State into the next phase of telecommunications. This comprehensive legislation is a start to that process. Specific provisions are described below.

I BROADBAND DEPLOYMENT AUTHORITY/MAPPING

Broadband technologies, which enable the high-speed transmission of electronic information, play a fundamental role in the State's economy. These broadband services are essential for electronic commerce and telecommuting, and are critical for 21st century learning and medicine. However, broadband technologies are not evenly dispersed and utilized among the state's citizens. Rural, inner-city, and low-income households may be unable to reap the benefits of broadband access. In order to develop a strategy for encouraging the cost-effective deployment of broadband technologies in the state, the legislature intends to identify factors preventing the widespread availability and use of broadband technologies.

This bill will guarantee adequate service quality by telecommunications and cable companies in rural, high-cost and low income areas. Often social access is just as important as physical access. In other words, even as broadband is deployed, the costs are so high that most citizens cannot afford to use the technology. Such a cost prohibitive deployment must be addressed.

As other states have found, due to the complexity and expense of establishing universal broadband access, the creation of a new public authority is necessary. This public authority, the Broadband Deployment Authority, will manage, regulate, and assist with funding of the wide array of infrastructure enhancement projects necessary for universal broadband access. This is not a new concept as other states have already moved ahead with the creation of similar public authorities. Virginia created the Innovative Technology Authority with an operational arm known as the Center for Innovative Technology. The Authority has powers to promote various technology projects and is authorized to disburse funds to broadband enhancement projects throughout the state.

The Innovative Technology Authority/Center for Innovative Technology is considered nation-wide model for broadband deployment authorities. Connect Kentucky was based off these institutions and has made impressive strides in its effort to establish 100%. Broadband availability throughout their home state by the end of 2007. Maine has created thConnectNE authority tasked with establishing universal broadband access in that state, with power to designate and redesignate base-level broadband access speeds, designate un- and under-served areas, distribute funds, and level assessments on telecommunications providers to support those funds. By creating this authority and the requisite broadband infrastructure the economic future of New York will be greatly enhanced.

However, in order to deploy broadband to the places in greater need, the State needs a comprehensive system of mapping. Therefore, the Empire State Development Corporation and the Public Service Commission, in conjunction with the Geographic Information Services Clearinghouse of the Office of Cyber Security and Critical Infrastructure Coordination will be appropriated $250,000 to complete a survey of broadband availability in New York State. The survey shall collect and interpret statistically reliable geographic, demographic, and telecommunications technology information to identify any broadband deployment disparities in the state. The survey shall also produce a statistically reliable profile of the following: Households and businesses in the state with no available broadband options; Households and businesses in the state with access to broadband options, but who choose not to purchase an option; and purposes for which broadband is used by households and businesses in the state.

The survey will be conducted at the census tract level or such smaller administrative units as is reasonable. After the initial survey is complete, the Empire State Development Corporation, Public Service Commission, and the Geographic Information Services Clearinghouse will provide updates every six months to track the expansion and progress of broadband access across the State.

II. COMPETITION OF CABLE TELEVISION SERVICES

The State has a responsibility to promote adequate, affordable and efficient cable services to its residents and encourage the optimum development of community-service potentials of the Cable television medium. Technology is ever-changing and it is imperative that the State of New York allows for many sources of technological competition to provide the goal of adequate and affordable cable services to residents. This Act is a step in providing a balanced approach to providing consumers cable choice and allowing for areas of the State to have access to developing broadband technologies. Currently, other states have enacted laws to provide choice for cable service including: California, Indiana, New Jersey, Michigan, Kansas, North Carolina, South Carolina, Texas and Virginia.

Other states have also moved statewide franchise bills through the legislative process including Pennsylvania, Connecticut, Georgia, Missouri, New Hampshire and Tennessee, among others. Contrary to various reports, this bill protects all municipal power, save the power to approve the franchise, and sets the fees, public access and other social protections at a ceiling so that municipalities, community groups and other interested parties have the most progressive and comprehensive franchise possible. In the end this section is to protect the consumer and strengthen the economy, while preserving locality's power to regulate franchises. The GAO, FCC and other studies show that only statewide franchises cause rate reductions of 20-25%. In addition, Towns, cities and villages will receive a 40% increase in payments from cable companies.

A. ADDITIONAL CONSUMER AND LOCAL GOVERNMENT: PROTECTIONS

While other states have enacted laws to provide choice, this bill would require other important protections to protect local input, community input, citizen access to television channels, the free flow of ideas and information on broadband networks and other consumer protections. This is the most progressive statewide cable franchise in the country that will protect consumers, bring choice, protects the power of municipalities and require social responsibility on behalf of cable providers.

1. It-maintains and exceeds financial commitments to local governments. The Act has a progressive franchise fee schedule that includes a St franchise fee, free cable and Internet service to municipal buildings and agencies and a separate fund to maintain and build duality PEG channels. Finally, tax loopholes and other financial gimmicks used by the cable companies to reduce municipal payments are outlawed.

2. It maintains municipal oversight to tailor the provider's commitment to the community's needs. The Statewide franchise will allow municipalities the various powers to retain all their historic powers including:

*The power of municipalities to exercise its power over public rights of way;

*Receive, mediate and resolve cable service quality complaints from a franchise holder's customers within the municipality;

*Require a franchise holder who is providing cable service within the municipality to register with the municipality, maintain a point of contact, and provide notice of any franchise authorization transfer to the municipality within fourteen business days after the completion of the transfer; and

*Establish guidelines regarding the use of public, educational, and governmental access channels within the municipality.

3. It protects and allows for progressive public access. In many parts of the State, PEG channels are woefully inadequate in providing access and programming opportunities to citizens. This bill would create a strong system of PEG channels for it provides the necessary funding and channel space. The Act will require that the current regulations governing PEG channels be followed including additional PEG channels and services not contained in the current regulations. For example every statewide franchise will have to allot analog channels of six megahertz bandwidth. In addition, the Act would create a separate fund specifically for PEG channels to maintain a reliable service and community network. This is the most progressive language in the State or country.

4. It requires a continued commitment to the community. The Act will require cable operators to provide free cable and high speed Internet service to hospitals, schools, firehouses and other important community/municipal organizations. In addition, the Act includes anti-redlining provisions. If the PSC finds that a cable operator is redlining, the Commission may terminate the franchise as well as impose fines and penalties on the cable operator.

B. REQUIRING COMPANIES TO PROVIDE COMPETITIVE SERVICES AND STOPPING THE "CHERRY PICKING" PROBLEM

Contrary to various reports, this Act would mandate that cable operators fulfill their obligation to provide choice by requiring certain build out dates as well as impose fines to any company that is found to discriminate against a class or race of people by not providing service to communities. Specifically, any evidence of redlining by a company results in significant penalties. This bill will require that the franchisee provide service to a majority of New Yorkers to ensure that competition is offered, throughout the State. This bill would require that any statewide franchise provide; service to over half the State's consumers (including in the upstate, western, central and downstate portion of the State) within three years of receiving a statewide franchise, and service to over 85% of New Yorkers within five years. This is among the most progressive deployment requirements in the country.

C. WHY THE NEED FOR THE STATEWIDE FRANCHISE?

It has been argued that there is no need for a statewide franchise because any company can file for a local franchise now and further, that it is unfair to companies that have had to file for local franchises to now compete with a statewide model. However, the technology and market has changed considerably since the first cable franchises. It took years for cable companies to offer cable service and broadband service to the entire State, so a local franchise-by-local franchise approach will not deploy and create the competitive market that consumers deserve. Moreover, a review of franchises throughout New York has shown that many municipalities get shortchanged. This bill sets protects municipalities by statutorily requiring the financial and community incentives that are needed in franchises. Finally, and most importantly, in the end the consumer wins because of lower cable rates.

D. THE STATEWIDE FRANCHISE PROVIDES CHOICE, CREATES JOBS AND SPURS THE ECONOMY

The Cable Choice Act provides residents all the consumer protections and statutory requirements for adequate, efficient and affordable service while providing choice of service providers. This carefully constructed legislation will promote and facilitate the deployment of advanced technologies and new reliable and affordable services to all classes and communities and protect New York's ability to compete in the national and international marketplace for industry and jobs.

III. PROTECTING THE NEUTRALITY OF THE INTERNET

The proposal includes net neutrality language - whereby networks would not be able to favor one particular network destination or class of applications over others--to ensure that the free flow of ideas of the Internet. Although the Federal Government has eliminated net neutrality rules, the State has every right and obligation to build this important consumer protection in as a condition of a new model of cable and broadband deployment.

Net Neutrality is not in itself a new idea. Its roots date back to the 1860's with Common Carrier legislation for telegraphs. Those laws made it unlawful for anyone owning or operating a telegraph line to refuse to receive dispatch from any other company or person owning or operating any telegraph line in the state, or refuse or willfully neglect to transmit the same in good faith, without partiality. The offense would result in the forfeiture of all right and franchises associated with telegraph transmission in the state.

In 2005 the Federal Communications Commission incorrectly decided that common carrier status need not apply to telecommunication providers. There is no logical reason to overturn statutes that have worked for over 140 years. Our legislation will update an existing statute in order to ensure consumer protection and public safety by providing equal telecommunications access for all New Yorkers.

IV. PROTECTING 911 EMERGENCY SERVICES

This legislation also protects and will require the further enhancement of 911 emergency services. The ability to call 911 during an emergency saves lives every day in New York State. Many New Yorkers who use VoIP (Internet phone service) as their primary phone assume that emergency 911 works the same for VoIP phones as traditional phones, but this is mostly not the case. Consumers must be made aware of any limitations of their 911 service before an emergency occurs. Disclosure of the limits of VoIP's 911 services will allow New Yorkers to avoid the tragedies that have occurred in other states when customers wrongly believed that VoIP would work the same as traditional phone service when placing a call to 911. For example, in Texas a child recently witnessed a violent crime in her home, but was unable to access 911 emergency services from the family's VoIP telephone. The Attorneys General of the States of Michigan and Texas have brought suit against the largest provider of VOTE, telephony to require it to fully disclose the limitations of such services to current and prospective customers.

Furthermore, New York's existing Enhanced 911 (E911) system greatly enhances public safety by automatically identifying the caller's phone number and location. Nearly all consumers with traditional wireline phone service and most consumers with wireless cellular phones currently have access to E911. However, outside of New York City, most VoIP subscribers do not enjoy the benefits of E911. With an increasing number of New Yorkers using VoIP phones, it is important that the State studies the technological challenges facing the extension of E911 to VoIP services and other issues that could degrade the effectiveness of New York's E911 networks in the future. E911 services are essential to the public safety of all New Yorkers.

E911 is distinguished from traditional 911 in that it provides the Emergency Operators the caller's phone number as well as their location. As such it is necessary for New York State to perform a comprehensive study to ascertain the current availability and reliability of its E911 services. As the telecommunications industry migrates from copper wire based infrastructure to fiber optic-based infrastructure, it is equally important that New York take steps to safeguard the current availability and reliability of E911 while looking secure and expand the service with new and emerging technologies. After such a study is performed, the public will be better informed of the policy issues surrounding E911 as well as possible legislative actions necessary to ensure its availability.

V. ANNUAL TELECOMMUNICATIONS RESOURCES REPORTS BY AUTHORITIES AND AGENCIES

Wide access to broadband services will serve the public interest and promote economic development within New York State. This section will have public authorities and agencies lease on a non-discriminatory and commercially reasonable basis any excess capacity or bandwidth under their control to public entities or certified telecommunications carriers. This excess capacity will then be used to provide broadband services to unserved, underserved, and distressed areas. This section will also have public authorities and agencies report on the telecommunications services they use that may be used in a telecommunications demand aggregation program administered by the State Broadband Deployment Council created in this legislation. Finally, this section will require each public authority and agency to post on its website documentation on the telecommunications infrastructure resources controlled by the authority and agency.

It is wasteful for public authorities and agencies to let excess capacity go unused when it can be leased to public entities or telecommunications carriers in order to increase broadband access to underserved areas.

VI. PROTECTING UNIVERSAL SERVICE AND THE LEGACY SYSTEM

While new telecommunications technologies emerge daily, many New Yorkers are forced to rely on the legacy system. New York's historic responsibility was and is to provide universal service at just and reasonable rates. The Federal government has defined universal service as being composed of the following parts: the high-cost support mechanism; the low-income support mechanism; the rural healthcare support mechanism; and the "E-Rate" which helps to provide telecommunications access to our schools and libraries. New York currently provides minimal assistance to elderly persons with help paying their phone bills as well as telecommunications relay services (TRS) to the hearing impaired. New York does not provide any E-Rate assistance beyond what it receives in federal moneys.

This situation is unacceptable. As part of a holistic approach to reforming the telecommunications industry, implementation of all four federal aspects of the universal service fund is necessary, as well as expanding that definition to include high-speed broadband access to unserved and underserved areas.

As demonstrated in the by Committee's various public hearing and investigations into Verizon's declining service quality, it is necessary for comprehensive reform of the telecommunications industry. Relying on market forces to regulate the industry (legacy or burgeoning networks) has so far proved inadequate. As the industry migrates from aging copper wire networks to new, high capacity fiber-optic cables it is imperative that the State have a free hand to regulate the industry. Through new regulations the State can ensure service quality that will provide instant access to emergency phone and internet services throughout the infrastructure transition and beyond.

Evaluating service quality should encompass a wide number of criteria: the length of time needed to repair out of service reports, wait times for customer service phone calls, the time needed for installations, missed repair appointments, and more. Along with former Assemblyman Paul Tonko's service quality proposal, this legislation takes several steps to ensure adequate service quality for New Yorkers. It requires the Public Service Commission to issue reports that evaluate the impact of the sale or transfer of the capital stock of telephone corporations on service quality in the relevant area along with looking at the impact on prices and network reliability. The bill also empowers a municipal government to mediate cable television service quality complaints within the municipality.

Thus, in order to accomplish the goals of universal service, it is imperative that a system of support mechanisms remain in place and is expanded to burgeoning technologies for high-cost areas. The legislation expands universal service to promote the goal of ensuring that telecommunications consumers in New York have generally and readily available and reasonably priced access to broadband telecommunication services and other advanced communications services in a fair and non discriminatory procedure.

Additional measures are needed to ensure that the State fulfills its responsibility of providing universal service. First, the Public Service Commission must approve of any sale, lease, or other form of acquisition of said infrastructure, before that transaction can be finalized. Approval of any transaction is contingent on the Public Service Commission's findings that the transaction will be in the public interest and meet standards described in statute.

Second, the State must take a hard look at any sale of part of the legacy system. Recently Verizon has sold off portions of their networks in New Hampshire, Connecticut and Vermont. As recently as 2005, reports surfaced that Verizon and Frontier were looking to selling off portions of their networks in Upstate New York. Reports have also indicated that the companies that were interested in purchasing the lines are private equity firms and speculators interested in generating quick profits, rather than traditional telephone companies interested in operating the business over the long term in the upstate region. Such a sale would clearly have a dramatic impact on telephone service in upstate areas and would have a pronounced effect on the policy of universal service. It is therefore vital that the Department of Public Service, the Legislature, and the Governor understand the full range of issues and questions arising from the sale of a large sector of telephone networks on service quality and public safety among other issues.

Third, before consent is given to any merger, the Public Service Commission must agree that such merger is within the public's interest. The public interest requires that the Public Service Commission's analysis of mergers and conclusions drawn there arise from objective and verifiable empirical evidence, rather than from unsupported statements of policy or conclusory observations. It is additionally in the public interest to require a portion of the benefits of telecommunications mergers to be returned to the state's ratepayers as refunds, reinvestment in the infrastructure, providing E-911 services or to finance repairs, maintenance or new construction that might otherwise be unfunded. Finally, requiring the Public Service Commission to conduct its analysis upon an enumerated list of public interest factors increases the participation of the public and other stakeholder groups in such proceedings, which enhances the transparency and accountability of the merger analysis process.

VII. ANTI-DISCRIMINATION IN ACCESS TO TELECOMMUNICATIONS SERVICES

Pursuant to section 226 of the public service law, cable television companies are authorized to install their facilities upon private premises under reasonable conditions. This statutory authorization, however, does not apply to any other types of telecommunications service providers. This bill would permit all types of telecommunications service providers to install their facilities upon private premises, under reasonable conditions, in recognition of the current range of telecommunications service choices available to consumers and the potential for expansion of such services. The bill would thereby allow equal access by telecommunications service providers to install their facilities in private premises so that consumers will in turn have full access to, a variety of telecommunications services.

VIII. WIRELESS TELECOMMUNICATIONS

Wireless technology has developed rapidly across the globe. For many people across the State wireless telephone service is now their primary mode of communication. Many other customers, especially older ones, use cell phones primarily for safety in the event of emergencies during travel. Assemblyman O'Donnell sponsors legislation that will give consumers protections such as disclosure of terms, conditions of services and charges, E-911 service, and Coverage maps and areas. Alongside Assemblyman O'Donnell's legislation there should also be a study into wireless telecommunications service providers to ensure consumer protection, health and public safety. With the expansion of wireless telephone service it is in the public's best interest for the Public Service Commission to go forth with a study and report their findings to the Legislature in 180 days after this bill shall become law.

Taken together this legislation will provide the resources for modernizing the State's telecommunications network, provide choice for consumers, and protect the legacy system.

Prior legislative history

2015-2016: S.2685A - Amend and Recommit to Corporations, Authorities and Commissions 2013-2014: S.3175 - Referred to Corporations, Authorities and Commissions 2011-2012 A. 4379A/S.6045 referred to committee on corporations, authorities, and commissions; 2009/2010 A.1875 referred to corporations, authorities and commissions; A.3980 (2007-2008). However, note: Reference to wireless telephone and consumer protections A.2030 of 2007 (O'Donnell); telecommunications service and consumer protections standards A.3704/3705 of 2007 (Tonko). Includes elements of A.6524 of 2006 (Brodsky); A.9807 of 2006(Brodsky); A.9808 of 2006 (Brodsky); A.9809 of 2006 (Brodsky); A.1423 of 2007 (Brodsky); A.7932 of 2006 (Brodsky).

Fiscal implications

Not known.

Effective date

This act shall take effect immediately.