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PRINTER'S NO. 2267
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE RESOLUTION
No.
430
Session of
2017
INTRODUCED BY PHILLIPS-HILL, SNYDER, BIZZARRO, DAVIS, DRISCOLL,
A. HARRIS, IRVIN, RAPP, RYAN, THOMAS, NEILSON, WATSON,
PICKETT, WARD, HILL-EVANS AND GROVE, AUGUST 15, 2017
REFERRED TO COMMITTEE ON CONSUMER AFFAIRS, AUGUST 15, 2017
A RESOLUTION
Directing the Legislative Budget and Finance Committee and the
Joint State Government Commission to jointly conduct an
audit and study on the compliance of nonrural
telecommunication carriers with the Public Utility Code and
high-speed broadband universal service deployment mandates
and to report their findings and recommendations to the House
of Representatives.
WHEREAS, The purpose of 66 Pa.C.S. Ch. 30 was to ensure that
all areas of this Commonwealth have a modern, state-of-the-art
broadband telecommunications network by the end of 2015, with
incumbent local exchange telecommunications companies (ILETCs)
receiving substantially greater pricing and earnings flexibility
than the traditional rate-of-return form of regulation under
which the prices and earnings had originally been set to fund
the deployment of high-speed broadband networks throughout this
Commonwealth; and
WHEREAS, The intended goal of 66 Pa.C.S. Ch. 30 was to
promote an accelerated roll-out of a mass market and universal
broadband network which would establish this Commonwealth as a
national leader in broadband deployment; and
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WHEREAS, Chapter 30 of 66 Pa.C.S., which added sections 3001
through 3009, was enacted and made effective immediately through
Act 67 of 1993; and
WHEREAS, In 1993, nonrural telecommunications carriers
operating in this Commonwealth adopted an alternative form of
regulation and network modernization plans to replace existing
copper-based network infrastructure with a hybrid of fiber optic
and coaxial cables to deliver high-speed broadband at speeds of
at least 45 megabits per second (Mbps) in both directions
throughout 100% of their urban, suburban and rural service
territories by the end of 2015; and
WHEREAS, In their first two biennial updates, nonrural
telecommunications carriers reiterated their commitment to
deploy high-speed broadband at speeds of 45 Mbps or greater to
customer locations within five business days even though the
statutory minimum for universal broadband availability was 1.544
Mbps; and
WHEREAS, In June 2000, nonrural telecommunications carriers
filed their third biennial update with the Public Utility
Commission (PUC) requesting approval of substantial revisions to
their network modernization plans that would retain their
existing distribution system of obsolete copper wire pairs to
deploy high-speed broadband at 1.544 Mbps through digital
subscriber line (DSL) services instead of replacing the network
with a hybrid of fiber optic and coaxial cables to deliver high-
speed broadband at speeds of at least 45 Mbps in both
directions, while obtaining financial benefits as a result of 66
Pa.C.S. Ch. 30; and
WHEREAS, In March 2002, the PUC rejected the nonrural
telecommunications carriers' third biennial update and concluded
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that nonrural telecommunications carriers unilaterally changed
the broadband commitment without properly notifying the PUC,
stating that:
(1) half of the nonrural telecommunications carriers'
customers having the capability and willingness to pay for
DSL service could not subscribe to the service as a result of
distance limitations from the nonrural telecommunications
carriers' central offices;
(2) even fewer residential customers had DSL service
available to them at speeds of 1.544 Mbps or more; and
(3) the 1.544 Mbps bandwidth proposed by nonrural
telecommunications carriers for those customers was far below
the 45 Mbps bandwidth approved in their 1995 network
modernization plans and their first two PUC-approved biennial
reports in 1996 and 1998;
and
WHEREAS, In September 2002, nonrura1 telecommunications
carriers filed a petition to amend their network modernization
plans to:
(1) deploy fiber or comparable technology to remote
terminals to make higher bandwidth services available for
purchase by more customers;
(2) make available, upon customer request, broadband
services of at least 1.544 Mbps within five days of a
customer's request; and
(3) make at least 45 Mbps service available within
commercially reasonable times and established DSL deployment
benchmarks at various speeds and types of DSL to reach 45% of
rural lines by 2006;
and
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WHEREAS, In July 2003, the PUC officially permitted nonrural
telecommunications carriers to break the commitment to the
Commonwealth to deploy a 45 Mbps high-speed hybrid fiber optic
and coaxial cable broadband network and replaced that commitment
with a mandate to deploy broadband at a speed of 1.544 Mbps with
the following benchmarks regarding each urban, suburban or rural
exchange:
(1) 50% by 2004;
(2) 60% by 2006;
(3) 70% by 2008;
(4) 80% by 2010;
(5) 90% by 2012; and
(6) 100% by 2015;
and
WHEREAS, In July 2003, the PUC order also directed nonrural
telecommunications carriers to upgrade all central offices and
existing remote terminals and construct new terminals to provide
broadband service at 1.544 Mbps within five days of a customer
request; and
WHEREAS, Immediately following the sunset of 66 Pa.C.S. Ch.
30 on December 31, 2003, the PUC issued a statement of policy to
clarify the duties and obligations of ILETCs regarding final PUC
orders issued under former 66 Pa.C.S. Ch. 30 and reinforced that
previously approved plans would remain in effect and were fully
enforceable in all aspects upon all ILETCs; and
WHEREAS, Act 183 of 2004 repealed 66 Pa.C.S. §§ 3001-3009 and
added §§ 3010-3019 to provide additional economic and regulatory
incentives to ILETCs to further facilitate the deployment of a
Statewide broadband network by:
(1) encouraging earlier completion of existing network
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modernization plans;
(2) reducing the inflation offset under the companies'
price cap form of rate regulation;
(3) eliminating outdated PUC filing and reporting
regulations; and
(4) establishing several funds and programs to further
facilitate broadband deployment beyond the deployment
commitments contained in the companies' network modernization
plans, including:
(i) a bona fide retail request (BFRR) program;
(ii) a business attraction or retention program;
(iii) the Broadband Outreach and Aggregation Fund;
and
(iv) the Education Technology Fund;
and
WHEREAS, In February 2005, this Commonwealth's nonrural
telecommunications carriers filed revised network modernization
plans with the PUC to comply with Act 183 of 2004; and
WHEREAS, The plans were approved by order entered in May 2005
to:
(1) require the nonrural telecommunications carriers to
retain their commitment of broadband availability to l00% of
the total retail access lines by December 31, 2015, under the
same benchmarks as outlined in the third supplement to their
network modernization plans approved by the PUC in August
2004; and
(2) allow nonrural telecommunications carriers to reduce
the inflation offset of the price stability mechanism from
2.93% to 0.5% to generate additional funding dedicated to the
deployment of high-speed broadband service at 1.544 Mbps
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through urban, suburban and rural areas of their service
territories;
and
WHEREAS, In December 2011, this Commonwealth's nonrural
telecommunications carriers filed plans to announce their
intentions to use other technologies, including fixed wireless,
to meet the statutorily mandated broadband deployment
benchmarks, stating their commitment to inform the PUC about
deploying technologies to make broadband available to customers;
and
WHEREAS, The filing was approved by Secretarial Letter dated
August 2012; and
WHEREAS, On September 7, 2012, David K. Ebersole and the
Office of Consumer Advocate filed a joint petition seeking a
declaratory order and asserting that this Commonwealth's largest
nonrural telecommunications carrier did not meet its:
(1) legal obligation to the Greensburg community service
area (CSA) 1125 BFRR for accelerated deployment of advanced
services; and
(2) legal broadband deployment obligation because it
directed the BFRR applicants to apply to the nonrural
telecommunications carrier's wireless affiliate for wireless
4G LTE broadband services, which caused the Greensburg CSA
customers to believe, for approximately two years, that they
would be receiving wireless DSL service to meet their request
filed in July 2010;
and
WHEREAS, In February 2013, the PUC approved a final order and
concluded that the PUC cannot specifically require nonrural
telecommunications carriers to deploy DSL service to meet the
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BFRR of the Greensburg CSA l125 customers or to set a specific
price for the retail broadband access service offered those
customers as part of the request; and
WHEREAS, The PUC approved this Commonwealth's largest
nonrural telecommunications carriers' joint venture with its
wireless affiliate to provide retail broadband access service to
rural BFRR customers; and
WHEREAS, The largest nonrural telecommunications carriers'
joint venture agreements with its wireless affiliate change a
potential alternative provider of broadband service into the
carriers' designated provider, which may constitute illegal
cross-subsidization under 66 Pa.C.S. § 3016(f)(1) and the
corresponding PUC regulations under 52 Pa. Code § 63.143(4)(i);
and
WHEREAS, The largest nonrural telecommunications carriers'
customers who receive wireless broadband services to satisfy a
BFRR are required to address any service or billing disputes
with the wireless affiliate, further raising cross-subsidization
concerns because the carriers' wireless affiliate is an
unregulated provider of wireless competitive services and may or
may not receive dedicated funding only for the benefit of the
carriers' customers where broadband must be deployed, and the
funding may or may not be used by the wireless affiliate to
offer competitive wireless services to the general public; and
WHEREAS, The pricing for the wireless 4G LTE that is provided
through the Commonwealth's largest nonrural telecommunications
carriers' joint venture is affected by certain data usage caps
and tiers, various equipment charges, service reliability issues
and contract periods that may exceed the one-year contractual
term that is statutorily specified for the routine engagement of
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retail broadband access service under the BFRR process and could
be considered cost prohibitive to rural customers that lack
access to alternative broadband service providers and who have
paid increased telephone fees for decades to nonrural
telecommunications carriers for the deployment of broadband
services; and
WHEREAS, The promise by nonrural telecommunications carriers
to bring fiber Internet or comparable technology to their entire
urban, suburban and rural service territories has instead
resulted in an estimated 2,000,000 Pennsylvania homes having
slower DSL service, unreliable wireless service or no service at
all; and
WHEREAS, The deployment and adoption of broadband technology
in rural communities is a central policy challenge facing this
Commonwealth; and
WHEREAS, Broadband service is an engine of economic growth
that offers rural communities the hope of economic development,
the promise of economic revitalization, the energy of an
educated productive citizenry and the benefit of a positive
quality of life; and
WHEREAS, Access to broadband and advanced telecommunication
technology is essential for full participation in economic and
social life for every Pennsylvanian; and
WHEREAS, Consumers in this Commonwealth continue to stress
the need for faster digital connections so that local businesses
can sell products globally, school children can receive a
quality education and farmers can operate high tech equipment,
especially in rural areas; and
WHEREAS, The Federal Communications Commission's Connect
America Fund offers funding to this Commonwealth's largest
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nonrural telecommunications carrier to build new broadband
network infrastructure or upgrade networks in areas where it
might not be as profitable, yet hundreds of millions of dollars
in Connect America Funds have been declined by the
Commonwealth's nonrural telecommunications carriers; therefore
be it
RESOLVED, That the House of Representatives direct the
Legislative Budget and Finance Committee and the Joint State
Government Commission to jointly conduct an audit and study on
the compliance of nonrural telecommunication carriers with the
Public Utility Code and high-speed broadband universal service
deployment mandates; and be it further
RESOLVED, That the Legislative Budget and Finance Committee
and Joint State Government Commission:
(1) determine whether nonrural telecommunications
carriers have fulfilled their commitments to deploy high-
speed broadband to 100% of their urban, suburban and rural
services territories by 2015;
(2) analyze efforts regarding compliance and
administration of BFRR programs under 66 Pa.C.S. § 3014(c),
including the number of BFRR requests filed, answered and
resolved, the type of broadband services deployed and the
time it took to answer, resolve and deploy broadband services
resulting from BFRR programs, to determine whether violations
of the Public Utility Code exist;
(3) analyze whether the nonrural telecommunications
carriers' joint ventures with their own wireless affiliates
constitute joint ventures under McRoberts v. Phelps, 138 A.2d
439 (Pa. 1958);
(4) determine whether potential violations of 66 Pa.C.S.
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§ 3014(b)(3)(ii)(B), (c) or (k) or 3016(c) or (f) would
trigger substantial customer refunds under 66 Pa.C.S. §
30l5(a)(2) and 66 Pa.C.S. Ch. 33; and
(5) determine the nonrural telecommunications carriers'
revenue increases and tax write-offs resulting from the
enactment of 66 Pa.C.S. Ch. 30 through December 2015,
compared to the amount expended by nonrural
telecommunications carriers to deploy their high-speed
broadband network to l00% of their customer base located in
their service territories by an amount per household;
and be it further
RESOLVED, That the Legislative Budget and Finance Committee
and the Joint State Government Commission issue a report of
their findings and recommendations, which shall include, but not
be limited to:
(1) a price and service quality comparison between a
nonrural telecommunications carriers' DSL broadband service
offering and the 4G LTE wireless broadband service offering
to determine whether rural consumers are being unfairly
discriminated against by the PUC's approval of the nonrural
telecommunications carriers' joint venture with the carrier's
wireless affiliate;
(2) recommendations regarding whether the PUC should
retain jurisdiction over quality of service standards that
address the safety, adequacy, reliability and privacy of all
telecommunications and broadband services offered by nonrural
telecommunications carriers operating under network
modernization plans, including the ordering, installation,
suspension, termination and restoration of any
telecommunications or broadband service provided by a
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nonrural telecommunications carrier previously determined to
be competitive until a universal broadband commitment is
achieved as envisioned under 66 Pa.C.S. Ch. 30; and
(3) recommendations regarding remedial legislation,
including, but not limited to, the imposition of sanctions,
fines, penalties or other appropriate actions;
and be it further
RESOLVED, That the report be issued to the Consumer Affairs
Committee of the House of Representatives and the chairperson of
the PUC no later that one year after adoption of this
resolution.
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