Carriers See Tex., Mich., Ill. as 2005 Legislative Hot Spots

Carriers also noted that in most states, 2005 marks the start of a new legislative session with no bills carried over from 2004. There were partisan and factional power shifts in many states after the 2004 elections, carriers said, which means restructuring of chamber and committee leaderships. And in Wash., the governor’s race remained too close to call after 2 ballot counts produced less than 50 votes spread between the candidates. A 3rd recount is under way.

Spokesmen for SBC and Verizon noted that the state telecom acts in Tex., Mich. and Ill. will sunset at the end of 2005, so those legislatures must take action. While there are no draft bills for replacement statutes yet, the Bell representatives said their companies will be paying close attention to their interests as new state telecom acts are written, because anything could be in play.

Charles Ward, Qwest public policy vp, said his company will be pushing for deregulation legislation in Ida. and N.M. He said deregulation in many of Qwest’s other states has moved to the regulators’ court thanks to previous law changes. Ward said other issues Qwest will watch include telecom tax reform, measures to encourage broadband development through tax breaks and other incentives, municipal telecom entry, and telemarketing restrictions.

Qwest is backing a draft Ida. deregulation bill that would end rate of return regulation for residential and business basic exchange to customers under 5 lines. The bill would put basic exchange in the same deregulated category as all other retail telecom services, allowing Qwest and other carriers to charge market prices. A similar bill was narrowly defeated in 2004 but Qwest said it’s made 2 major concessions this year.

Qwest would agree to give the Ida. PUC authority to review and modify its local rate changes for the first 3 years, and would agree to limit rural rate increases to the same percentage levels as in urban areas. Qwest said these concessions should ease lawmakers’ fears that deregulation would lead to sharply higher local rates. Ward said there’s no draft deregulation bill for N.M. yet, but Qwest would be involved in legislative workshop sessions planned early next year to draft a bill. He said Qwest believes these states should leave retail rate and service issues to the market.

Verizon said it expects a relatively quiet legislative year in the mid-Atlantic and New England. The spokesman said Verizon already operates under alternative retail regulation in all but one of its home states, N.H. He said there’s not much room for state legislative action on the wholesale side because so much of wholesale policy is federally driven. Other carriers are still developing their agendas for the 2005 sessions. “We're still evaluating our plans and strategies for 2005, and don’t have anything specific to share at this time,” said an AT&T spokesman.

A flood of prefiled bills is expected to hit legislative hoppers starting next week. But there are a few early birds. A prefiled Ind. broadband development bill (HB-50) would create a tax incentive for broadband network investment. It would allow broadband service providers an annual state tax credit equal to 3% of their total qualified investment to maintain, upgrade or construct broadband facilities. The bill was assigned to the Senate Tax & Fiscal Policy Committee.

A prefiled 2005 bill for the Cal. legislative session would require a longer period for parties to PUC cases to review any PUC members’ alternatives to proposed decisions on cases. Currently, the PUC can put an alternative decision on the agenda for a final vote 10 days after serving the alternative to the parties. This bill (SB-15) would extend that interval to 20 days, in order to allow parties more time for review and comment. It hasn’t been assigned to a committee yet.

A prefiled Ala. wireless bill (HB-4) would repeal the current state ban on possession of cellphones or pagers by students in public schools. Instead, this bill would leave it up to each local school board to decide whether students can carry wireless telecom devices and what restrictions to apply. It’s scheduled for a Feb. 1 hearing before the House Education Committee.

Carphone safety may be an issue again in the 2005 sessions. A prefiled bill in the Tex. legislature (SB- 120) would prohibit drivers under age 18 from using any wireless phone while driving, except for calling 911 in emergencies. The ban would apply to hands-free models as well as handheld phones.

In addition to state legislation, municipalities may also be heard from next year. For instance, Portland, Ore., plans to consider an ordinance next year that would impose the city’s utility tax on wireless services and VoIP. Currently, the tax applies only to landline telephone services. A draft ordinance for 2005 would reduce the tax rate to 5% of gross revenue, from 7%, but then apply the 5% tax to wireless and VoIP. This move would increase tax collections about $7 million annually. The tax change was to have been considered last week but was dropped from the agenda and won’t return this year. It will be taken up next year by a reorganized city council and a new mayor. Meanwhile, the city of Springfield, Ore., adopted an ordinance that imposes the city’s 5% utility tax on wireless and cable modem services, despite adamant industry opposition.