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Legislative Memo

BILL:

A.8842 (Rules/Brodsky) / S.5690 (Wright)

  Support

SUBJECT:

Free/Reduced Non-basic Telephone Services

 

DATE:

June 2, 2006

 

This legislation would allow telephone companies to offer free or reduced non-basic services to certain customers for a limited time period. The bill would create a level playing field between the traditional landline telecommunications companies and Competitive Local Exchange Carriers (CLECs).

The telecommunications marketplace has experienced an explosion of competition with the advent of new technologies. Consumers have a wide array of choices, including cable, wireless, satellite and wireline. Public Service Law must evolve to allow all marketplace participants to respond to the market in a timely and efficient manner without the burden of regulatory delays.

Traditional landline companies are regulated in all aspects of their operations by the Public Service Commission. Under current statute, telephone corporations are limited from offering services in a manner similar to their competitors. However, new market participants, such as some of the technologies mentioned above, are not regulated. As a result, these companies are free to offer their customers a wide variety of products and service options, including pricing, without having to seek regulatory approval. If someone calls their local cable company seeking to terminate service, the cable company is able to offer discounted service and other options in order to retain that customer. Traditional landline companies do not have such options. Allowing the regulated companies to do the same can only benefit customers. This bill would provide parity by allowing the incumbent utilities to provide pricing incentives customers demand in a competitive marketplace.

For the foregoing reasons, The Business Council strongly supports the abovementioned legislation and urges its adoption.