Prospect of New Hampshire VoIP Regulation Worries Industry

The New Hampshire Public Utilities Commission wants to revamp its phone rules, much to the dismay of some the state’s bigger companies. The PUC has examined different methods since January of 2012, and on Tuesday received several new comments on its latest proposal to refine the regulations, delivered in the wake of a deregulatory telecom law that went into effect last August. The PUC introduced an initial proposal in April (http://1.usa.gov/1a4QHnr), and the PUC and stakeholders hope to nail down a potential final version this month. But industry has objected to how the PUC’s proposal treats VoIP companies and interprets Senate Bill 48, the state’s recent telecom law. Multiple industry representatives voiced concern, both in recent comments and at a May commission hearing on the rules.

"The proposed rules substantially overstep these new limits [of SB-48] and must be revised,” Verizon told the PUC Tuesday. It said “most of the proposed rules would regulate or have the effect of regulating VoIP and IP-services in contravention of both the plain language of SB 48 and the Legislature’s intent in adopting the bill,” a case made in May at the hearing by the New England Cable & Telecommunications Association on behalf of Verizon and FairPoint. Verizon laid out specific examples of how the PUC’s proposed rules would regulate VoIP and IP services: “For example, proposed Rule 411.04, Assessments, would impose a fee on anyone who provides VoIP or IP-enabled services in New Hampshire, a classic regulation of market entry. Proposed Rule 411.05 would require such providers to file wholesale tariffs, in contravention of the statutory bans on regulation of market entry and regulation of rates, terms and conditions of service. And proposed Rules 411.06 (publication of information on website) and 412.06 (publication of telephone numbers in directories) would violate the prohibition on regulation of the terms and conditions of service.”

"The process is ongoing and FairPoint intends to work cooperatively with other interested parties to develop fair administrative rules which reflect the modern, competitive landscape, and do not reflect rules applicable to a monopolistic telecommunications market,” a FairPoint spokesman told us of the proceeding. The telco said it’s an “active participant” in the proceeding.

"We believe that the draft rules should be withdrawn,” said Susan Geiger, attorney for the New England Cable & Telecommunications Association, at the May hearing, according to its transcript (http://1.usa.gov/18y4Nzy). “Or, in the alternative, we believe that good cause exists for the Commission to either modify its procedural schedule” to add more time to work out the details. Staff and industry have “strong disagreements over the interpretation of Senate Bill 48 that is reflected in the wording and the structure of the draft rules” but may be able to work them out in time, she said. Verizon said the rules should be revised and on Tuesday submitted its own redlined version of the proposal. It said the PUC oversteps its bounds with the new category of company created by SB-48 -- ELECs, excepted local exchange carriers.

PUC staff submitted a revised version of the proposal June 5 (http://1.usa.gov/1bw8Ecz). That version adjusts the language of the proposal to better match SB-48 and makes many other minor changes, staff said. The redlined version included justifications for their proposed changes. PUC staff declined comment, referring us to recent comments.

Keep wholesale regulation in place, which should not be affected by the recent legal changes of SB-48, the CLEC Association of Northern New England (CANNE) said Tuesday (http://1.usa.gov/11fkx1R). “The requirements regarding ILEC wholesale tariffs contain some ambiguities and inconsistencies that should be resolved to avoid problems later,” CANNE said. “In addition, the ILEC wholesale tariffing requirements in the initial proposal are less extensive than the requirements in the current rules and less extensive than what is in FairPoint’s current wholesale tariffs. CANNE does not believe such a relaxation justified or appropriate.” The CLECs also encouraged the PUC to maintain certain levels of oversight, in particular “to ensure that networks interconnect seamlessly and that communications networks and facilities are built, maintained, and operated to a floor of standards regarding interoperability and safety.”

Verizon warned the PUC away from such interconnection roles. The PUC “has no authority under section 251 or section 252 to impose its own interconnection obligations or otherwise police the operations of telecommunications carriers absent a complaint regarding an interconnection agreement,” the telco said this week. Verizon has faced off against CLECs in other states on this issue, such as in an ongoing proceeding in Massachusetts (CD Feb 4 p7).

The CLECs also criticized certain other provisions the PUC is looking at. In bold, CANNE declared that, “There should be no ability on the part of a customer to escape contractual obligations when there only is a change in ownership, even if the carrier’s name changes.” But the PUC “largely got it right in trying to balance the interests of consumers, competition, and competitors,” CANNE added. “In particular, the Commission attempted to maintain a level playing field among carriers serving similar customers with similar services, regardless of technology, in terms of the regulatory obligations to which they are subject and the assessments they are required to pay."

The PUC should also make sure ILECs retain an obligation to provide basic service regardless of technology changes in the marketplace, said The Way Home (http://1.usa.gov/11H2cOj), a non-profit focused on low-income households and affordable housing. It filed comments through New Hampshire Legal Assistance. The Way Home specifically pointed to VoIP and Internet Protocol-enabled services as technologies that shouldn’t relieve companies of this basic service obligation and said the PUC should have a mechanism for consumers to complain if ILECs don’t offer basic service. The Legislature wanted these mechanisms, it added, if only these: “Most everything was deregulated except for basic service.” The Way Home also asked the PUC to make sure that FairPoint or any succeeding company maintains the “soft disconnect” process, by which the telco retains a dial tone for 90 days after a disconnection to allow that household to dial 911. The PUC should also include information about public interest payphones, which the regulators maintain authority over, the nonprofit said.

The PUC will hold a technical session next Tuesday “to allow interested parties to discuss the specific wording changes suggested by the parties and Staff,” PUC Executive Director Debra Howland said in a June 3 memo (http://1.usa.gov/13BZdqB). “The Commission also decided that if substantial changes are made to the initial proposal as a result of the Commission’s consideration of comments, then the Commission staff will circulate a draft final proposal.”