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Pennsylvania House of Representatives
04/24/2024 10:49 AM
Pennsylvania House of Representatives
https://www.legis.state.pa.us/cfdocs/Legis/CSM/showMemoPublic.cfm?chamber=H&SPick=20130&cosponId=13048
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House of Representatives
Session of 2013 - 2014 Regular Session

MEMORANDUM

Posted: June 24, 2013 12:16 PM
From: Representative Warren Kampf
To: All House members
Subject: Telecommunications Market Competition Legislation
 
MEMORANDUM

DATE: June 24, 2013

TO: All House Members

FROM: Representative Warren Kampf
157th Legislative District

RE: Telecommunications Market Competition Legislation

In the near future, I will be introducing legislation to create a more competitive telecommunications market in Pennsylvania and to provide consumers access to innovative products and services at competitive prices. This legislation is supported by the Pennsylvania Telephone Association and all of the incumbent local exchange carriers in Pennsylvania.

The telecommunications industry in the Commonwealth and throughout the United States has changed dramatically over the past decade. With the development of cell phones, smart phones, tablet computers and Voice over Internet Protocol (VoIP), consumers now have many options and methods to communicate with each other. Voice, internet and television services can be accessed through subscriptions to a traditional telephone utility, a cable company or a wireless service provider. However, only traditional telephone utilities are subject to state regulation by the Public Utility Commission (PUC) which dictates how, when, where and to whom service must be provided.

This regulatory framework worked well when traditional telephone utilities were the only providers of telecommunications services. However, this model is less successful in an environment where the cable and wireless industries are also providing voice service. Over the past decade, the telecommunications industry has evolved into a business environment where regulated carriers are now at a competitive disadvantage with the unregulated wireless and VoIP providers. In Pennsylvania, traditional telecommunications carriers serve half the lines they did a decade ago (from 8 million in June 2000 to 4 million in June 2011) while the lines served by their unregulated competitors (such as cell phones and cable telephony) have grown to 14 million.

My legislation seeks to encourage innovation and provide parity among providers. The legislation will strengthen the competitiveness of the Pennsylvania telecommunications marketplace, while attracting the capital investment needed to develop new products and technologies to keep consumers across the Commonwealth connected in the high tech world we live in today.

The General Assembly recognized the need for this parity when it declared in Act 183 of 2004, “regulatory obligations imposed upon the incumbent local exchange telecommunications companies should be reduced to levels more consistent with those imposed upon competing alternative service providers.” I believe that it is now time to take another step toward reducing the regulatory obligations placed on traditional telecommunications carriers because:
  • Encouraging regulated telecommunications carriers to explore and invest in innovative ways to provide service will bring consumers more reliable and less costly service options, including in rural areas.

  • Regulation is a barrier to competition. Take the wireless industry – this industry is not subject to either rate or quality of service regulation and yet consumers have numerous carriers and service options to choose from and can easily switch from one carrier to another for lower rates and better service.

  • Regulation stifles technological development and advancement. Again, using the wireless industry as an example, there is a constant stream of new and innovative products coming into the market to meet consumer demand for faster, better, more efficient service.
My legislation will amend Chapter 30 of Title 66 (Public Utilities Code) to modernize regulation of telephone companies by the PUC and permit the development of free market competition between these companies and cable companies, VoIP carriers and wireless carriers. Robust competition will benefit consumers and encourage more investment and innovation in Pennsylvania. Specifically, my bill:
  • Permits immediate designation of non-rural exchanges (those with a population of 300 persons or greater, per square mile, based on 2010 United States census data) as competitive.

  • Permits designation of rural exchanges (those with a population of less than 300 persons per square mile) as competitive if two or more alternative service providers operate in the exchange, but retains PUC oversight of protected services in those rural exchanges that do not yet have that competitive environment.

  • Ensures that consumers in all rural markets will have access to voice services.

  • Eliminates unneeded reporting requirements.

  • Retains telecommunication carrier broadband deployment obligations pursuant to 66 PA C.S. §3014.

  • In all competitive areas, requires that incumbent carriers continue to provide basic voice service to all consumers that subscribe to the service as of the effective date and until the customer requests that the service be discontinued or January 1, 2018, whichever is earlier.


  • Retains PUC oversight of quality of service standards related to protected services including the safety, reliability, privacy, termination and restoration of these services, but eliminates that oversight for competitive services and exchanges.

  • Retains PUC oversight of sales, mergers or acquisitions of telecommunications carriers except reorganizations or other transactions between parents, subsidiaries or affiliates and streamlines the PUC’s review of transactions within its jurisdiction.

  • Allows carriers the flexibility to deploy the technologies best able to meet customer needs.

  • Retains the obligation to provide Lifeline service, and permits the service to be provided over any technology.

  • Requires the PUC to complete an investigation into the current structure of the PA Universal Fund (USF) and implement any necessary changes by 2019; makes contributions and disbursements from USF public; caps the size and recipients of USF at 2012 levels.
  • Does not alter incumbent local exchange carriers’ obligations regarding all the general business standards, consumer protection laws, state and federal anti-trust laws and regulations that apply exclusively to the communications markets (slamming, cramming, privacy, etc.)

  • Retains PUC authority over resolution of intercarrier compensation complaints.

Introduced as HB1608