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December 19, 2005
Room 302, Capitol Building
Cheyenne, Wyoming
Senator Cut Meier, Co-Chairman
Representative Pete Illoway, Co-Chairman
Senator John Hanes
Senator Jayne Mockler
Senator Charlie Scott
Representative Bruce Barnard
Representative Ross Diercks
Representative Keith Gingery
Representative Erin Mercer
Representative Marty Martin
Representative Del McOmie
Senator Wayne Johnson
Representative David Miller
Representative Monte Olsen
Lynda Cook, Staff Attorney
Please refer to
Appendix 1 to review the Committee Sign-in Sheet
for a list of other individuals who attended the meeting.
Co-Chairman Pete Illoway called the meeting to order at 9:00 am. The following sections summarize the Committee proceedings by topic.
The committee approved the minutes of the October, 2005 meeting.
Although the committee did not notice the issue of liquor licenses on the agenda, Chairman Illoway asked Mike Moser to present a bill creating bar and grill liquor licenses. (Appendix 3). Chairman Illoway stated that if the committee is inclined they should contact him and the committee could do a post card ballot on whether to support such a bill.
Mike Moser testified that the bill is a compromise bill with Wyoming Liquor Association and Wyoming Association of Municipalities. They would like to see a bill like this rather than arguing over the two bills the committee already approved. The bill creates a new type of liquor license called a bar and grill liquor license that would be limited by a population formula.
Steve Ellenbecker, Special Telecommunication Liaison for Governor Freudenthal, testified regarding the history of the movement to update the telecommunications law. Circumstances in telecommunications are rapidly changing. He encouraged the committee to avoid tightening regulation and only consider changes that recognize the increasing competition in the market. Local voice service is still important but it is becoming increasingly difficult to distinguish between the many technologies available to consumers. Federal legislation will invoke regulation only when there are facts supporting unfair trade activities.
The current bill would allow downward price flexibility with a cap on prices. This allows incumbents to react to market fluctuations immediately. He suggests eliminating TSLRIC entirely. If there is a question about access rates, the complainant can go to the PSC to look at unfair trade practices. The hope of having TSLRIC ten years ago was to see price reductions in the market and we have not seen that.
Mr. Ellenbecker's recommendations: 1) Eliminate TSLRIC 2) Allow only downward flexibility in prices, strictly narrow or eliminate the ability to request price increases 3) Be comprehensive in the statutory changes, and 4) Eliminate antiquated language. In response to questioning, Mr. Ellenbecker stated that the governor does not want to see any increase in prices to consumers.
Senator Scott asked what about this bill makes it critical enough to introduce during a budget session. Mr. Ellenbecker testified that you lose the momentum and work that has gone into the consensus. Chairman Meier pointed out that downward pricing flexibility is necessary now. Rep. McOmie asked about the impact of the federal legislation on what they are trying to do. Mr. Ellenbecker pointed out that the federal legislation is only an introduced bill. But, if it becomes law the state legislation would be more compatible with federal legislation than the current law.
Jody Levin testified on behalf of the working group. (Appendix 4). The working group consisted of OCA, PSC, AARP, incumbents,
competitors, Farm Bureau and wireless.
The first working group amendment would be to not limit USF to one
line.
The working group wants to leave the current USF language intact and it can be
worked on in a future legislative session.
The working group recommends deleting the additional definition of
consumer choice.
With respect to section 202, the working group agreed in large part to eliminate the definition of consumer choice, move back to current law with changes addressed in the documents. The relevant market would be defined by the petition. The changes would allow the local phone companies to compare as competition comparable bundled services rather than essential phone line service only.
Section 402 was and still is very contentious. The subcommittee adopted language that companies with switched access rates above 2 cents per minute would still be limited by TSLRIC. Different members of the working propose eliminating TSLRIC entirely.
With respect to section 404 there was discussion as to what qualifies as predatory practices. It is not defined in statute.
Section 510, USF: the working group would like to have an interim study so that the committee and working group could put further work into amending this section. Until then they recommend leaving the language alone.
Bruce Asay testified regarding section 402. Following Mr. Ellenbecker's suggestion he would like to see the entire section repealed. He stated that he while he doesn't agree with everything in the bill, especially 402, he still thinks the bill should go forward, it is that important. He discussed the definition of reasonably comparable and predatory practices. He represents several companies with access rates above 2 cents. This bill takes off the onerous requirements from the big companies like Qwest but not the smaller companies. Taking out 402 would still allow companies complaining about access rates to file a complaint with the PSC.
Senator Scott asked for clarification on what would control upward pricing momentum. Section 203 provides a cap on noncompetitive services after a hearing in front of PSC. There is no limitation on competitive services except that they are limited by what the market will bear. Senator Scott asked whether there were standards that the PSC would consider in those price increase requests. There are none articulated in the bill. Also, what is in the bill to restrain local companies from raising access charges. Mr. Asay says that the competitive market controls those charges. Also, access rates are subject to federal regulation. Jim Wooding, Union Telephone Company, reminded the committee that the PSC still, under the bill, has the authority to handle complaints about access charges and they can order a company that is not charging a reasonable rate to lower those rates. Additionally, there is concern that keeping the TSLRIC requirement on these companies creates a disincentive for them to improve infrastructure. Edie Ortega addressed the practical aspects of allowing the market to set access rates. The inter-carrier compensation rate legislation that is going through the federal Congress will do even more to control these rates.
Bryce Freeman, OCA, addressed the question of the practical impact of 402. Federal law requires companies to charge all their customers the same access fees so they have to set that fee to cover all the different fees they are being charged throughout the state.
The question was again raised, what factors can the PSC take into consideration when considering whether a rate is too high. Section 405 allows the commission to set aside unreasonable or unreasonably discriminatory prices. There is a whole body of law that describes what is required.
The committee recessed for lunch and resumed at 1pm
Brett Glass addressed the committee. He owns a wireless broadband ISP provider. He expressed concern that the working group does not address the technology of today. (Appendix 5). He states he is an interested party because he provides the last mile, via satellite to customers. They are market participants because they have to buy wholesale services to provide the internet to homes.
Bill Marsh, AARP testified that they have been generally pleased with the process of the working group. Their main concern is with 202 and 203. They can accept the changes proposed in the working group draft, but would like more specificity such as "lesser or equal price". Merely defining competition as more than one provider is not good enough. Competition must be effective and comparable in price and quality. They want to see price caps on essential services, but they should be allowed to go down. With respect to 203, there is no required detail in the report.
Bryce Freeman and Denise Parish, OCA, testified regarding the bill. They don't agree with everything but they want to see change and therefore support the working group draft. With respect to 402, they agree that it isn't right to treat one segment of the industry different from the rest. But, they absolutely need to leave the complaint authority in the bill.
Chris Robish, Contact Communications, testified that they still have some differences of opinion with the working group draft. Definitions are needed that protect independent carriers from dominant carrier abuses. The bill needs specific and concise direction to the PSC. They propose a definitional change that would leave in the definition of "affiliated telecom companies". They think it is important to ensure that a sister company of the dominant company cannot be used to establish competition. They also don't support using the term voice in the definition of essential telecom services. Their proposal for 202 is very different from the working group. They believe the "relevant market" is inadequate. Alex Davison, counsel for Contact, addressed Senator's Mockler's question regarding whether the wireless companies are willing to be treated the same as their competitors in all aspects.
Liz Zerga, representing Altel, testified that the bill is not something her client endorses nor opposes. Downward pricing flexibility is very important but the bill eliminates TSLRIC without replacing it.
Steve Furtney testified on behalf of the PSC. They proposed the following amendments. Section 202 (a)(ii) they want to see "or" changed to "and". In 407 they want to see a change that eliminates the commission's requirement to report on prices when they don't get those prices filed with them anymore. He provided suggested language. In 402(b), they don't see why the language is necessary. In 502, the working group wants to strike the term "telecommunications" and they are concerned that doing so would allow a private company to put in a service and charge the universal service fund.
Mike Ceballos testified on behalf of Qwest. There is a standard for wholesale services. For every price they set, they have to file through the commission under the federal law. That price is set as TLRIC.
Walter Eggers and Jerry Lambert, representing Bresnan testified that the committee should be focused on sustainable competition. They don't see why this bill needs to go forward this session especially given that the USF portion is being put off until later.
Chairman Illoway moved the bill 06 217.W2. Representative Mcomie seconded.
Jody Levin described the amendments proposed by the working group. (Appendix 6).
The committee started working 06 LSO 0217.W2 (Appendix 7). The committee worked amendments to the bill and the final bill is attached as Appendix 8.
The bill passed 10 to 1 (Senator Scott opposed).
LSO Staff explained the problem with the previous version of this bill. (Appendix 9). The committee voted 10 to 1 to strike "construction," from Page 4-line 4. (Chairman Meier opposed).
There being no further business, Co-Chairman Meier adjourned the meeting at 5:30 pm.
Respectfully submitted,
Curt Meier, Co-Chairman