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Zack Hutchins
Director of Communications

October 14, 2005

Council: Antiquated telecommunications regulations should be reconsidered

Relieving traditional communication providers from burdensome regulations will benefit New York’s economy and New York residents, The Business Council has told the state’s Public Service Commission (PSC.)

In testimony presented October 11 to the PSC, the Council’s director of energy and telecommunications issues, Anne Van Buren, said non-traditional communications companies, such as wireless providers, are quickly moving into the market.

Traditional landline communications companies compete with not only wireless providers for customers, but also with cable television companies and high-speed internet services.

Traditional telephone carriers are losing customers at a 'staggering rate,' Van Buren said. “During the second quarter of 2005, for example, Verizon access line losses averaged in excess of 80,000 customers per month. A significant portion of these losses represent basic service primary line residential customers switching to voice-over-internet providers (VoIP), cable telephone, and wireless service.”

“Given this competitive and diverse marketplace, the Business Council believes that consumers should be the drivers of prices and services,” Van Buren said. “Market forces can be far more effective than regulation in ensuring that consumers receive quality services at competitive prices.”

Customers are switching to lower-cost competitors, which are not subject to the same service quality regulations imposed on the traditional carriers, Van Buren said. With customers able to choose from so many options, carriers have strong incentives to provide high quality service whether or not the state requires them to do so. Poor service will result in the loss of customers. With competition replacing a former near-monopoly situation, the market itself is demanding the kind of high-quality service which the state once sought through regulation.

“Communications companies should not be asked to shoulder antiquated, burdensome regulatory oversight. Indeed, most existing regulatory roadblocks should be lifted,” Van Buren said. ”Currently, many market participants are free to flexibly price their services. The time has come to allow the traditional carriers the ability to do so as well. And, if such regulatory encumbrances as service reporting requirements are removed, New Yorkers will benefit from greater investment in new technologies and services.”

All providers, regardless of the type of technology they use, should have the same, technology-neutral opportunities to serve consumers, while being subject to those minimal regulatory obligations necessary to protect consumer health and safety, Van Buren said.

“Continuing this uneven playing field will result in the inability of regulated carriers to succeed in a competitive marketplace,” Van Buren said. “Regulated carriers will have their hands tied by anachronistic regulations, while new, unregulated providers will thrive in the marketplace.”

The time has come for relaxing consumer regulations associated with traditional carriers, Van Buren said. By adjusting to the new competitive environment, the Commission can assure that the public will continue to receive the best, most reliable telecommunications services available, while growing the economy of New York.