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Legislative Memo

BILL:

S.3752-B (Wright)

Support

SUBJECT:

Public Pay Telephone

 

DATE:

May 14, 2004

 

SUMMARY: This bill would amend the Public Service Law to require certain local exchange
telephone companies to offer unbundled network element pricing to public pay telephone
providers. The Business Council of New York State, Inc. is opposed to this legislation.

This bill would require these local exchange companies to reduce payphone rates for payphone
service providers (PSPs) to prices applicable to unbundled network elements (UNE). UNE rates,
which competing local telephone companies currently enjoy for certain services and which are far
below the local exchange companies' costs, are significantly lower than the payphone rates set
forth in these lcoal exchange companies' approved tariffs.

ATTEMPTED END RUN: The effort by PSPs to obtain artificially low rates through legislation is an
attempt by the Independent Payphone Association of New York (IPANY) to make an end run
around several court decisions which have upheld Verizon's tariffed rates in response to their
appeals. Additionally, the Public Service Commission approved Verizon's permanent rates in 2000
and held that they properly complied with federal law. IPANY moved for reconsideration, and the
PSC issued a decision in 2001 denying that request and noting again that Verizon's rates were in
compliance with federal law. Undeterred, IPANY appealed both orders to the New York Supreme
Court, which agreed with the PSC's position.

CONCLUSION: This effort by IPANY is a thinly veiled attempt to get payphone lines and services
provisioned by certain local exchange companies at deeply discounted prices. Local exchange
companies should not be forced to provide these services to PSPs because PSPs are retailers, not
wholesalers, and as such are not entitled to UNE pricing. Adoption of this measure would
constitute an unfair subsidy of PSPs by local exchange companies and their customers. For these
and other reasons, The Business Council of New York State requests this bill not be approved.