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Kentucky Resources Council, PO Box 1070, Frankfort, KY 40602 Phone [502] 875-2428

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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

KRC Director Testifies On Bill Completing Deregulation of AT&T and Windstream Phone Services  Posted: March 4, 2017



STATEMENT BEFORE THE HOUSE SMALL BUSINESS AND INFORMATION TECHNOLOGY COMMITTEE MARCH 1, 2017

Mme. Chair, members of the Committee, my name is Tom FitzGerald and I am Director of the Kentucky Resources Council, a nonprofit organization providing legal and technical assistance without charge to low-income individuals, community groups, and local governments on a range of environmental, utility, and energy policy issues.

Those of you who were here in 2015 will recall that the Council has historically opposed the deregulation efforts of AT&T in 2015, and for several years prior to that.

The concerns that I voiced during those years addressed several issues: the relative lack of functionality and reliability of Internet Protocol-enabled and wireless services, particularly with respect to the ability of those services to reliably carry third-party services such as medical monitoring and alarm services when contrasted with the Publicly-Switched Telephone Network, the inability of wireless 911 to assure accurate identification of the caller’s location, and the loss of a right to stand-alone basic service. The issue was never one of landlines being removed – it was one of whether the service carried by those lines and those replacement wireless services would be reliable and functional.

In response to concerns voiced by myself and others, a carve-out provision was added that protected the right to receive basic stand-alone local exchange service for existing customers in smaller exchanges. This bill eliminates that carve-out, and completes the effective deregulation of AT&T as a public utility under Kentucky law with respect to retail services.

Since we began debate over the transition from the PSTN to IP-enabled communications, the FCC has issued several rules and declaratory rulings intended to protect the public and to assure that the core telecommunication values that have governed our policies – public safety, universal access to affordable, reliable phone service, competition and consumer protection – are preserved through this transition. Among them are:

• FCC Order 15-9, adopted on January 29, 2015, which mandates that wireless providers must incorporate enhancements in wireless 911 technology to improve location accuracy.

• FCC Declaratory Ruling 14-185A1, and several rulemakings in 2015 and 2016, clarify the rules for transitioning from the PSTN to IP-enabled digital communications, including a clarification that degradation in functionality of services, such as the replacement of PSTN services with other services that are not compatible with third-party services such as medical and alarm monitoring, require prior FCC approval under Section 214.

If my caution in assuring that those core values were and are protected during this technological transition, and my advocating that the most vulnerable of our brothers and sisters in the Commonwealth continue to have access to reliable, affordable, functional telecommunication services during this transition, makes me a “naysayer,” as AT&T suggested in a recent op-ed, then that is a badge I will proudly wear.

I believe that the General Assembly acted wisely in slow-tracking the deregulation of basic local services until now - until the FCC had back-stopped the transition by creating the rules needed to assure those protections at the federal level.

I appreciate the manner in which Sen. Hornback has approached this process, and his understanding of my concerns. With the passage of this bill, the questions of affordability, reliability, public safety, and closing the digital divide, shift entirely to the federal stage. I have my trepidations that the dissenting opinions of now-Chairman Pai of the FCC may now become FCC policy and may erode some of those protections that have been put in place.

If that occurs, or if the removal of the carve-out for those exchanges with less-than 15,000 households results in a degradation of services or increase in costs in rural exchanges within the AT&T or Windstream territories due to the lack of effective competition in those smaller exchanges, or due to AT&T or Windstream focusing on profit centers rather than on improving rural access to reliable wireless service, the Council will be back before you seeking reinstatement of those protections at the state level.

Thank you Madame Chair and Members of the Committee.

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