May 24, 2005
Summary: HB789 bill passes in the Senate, 31-0. No amendment was proposed to ban city-supported networks.
Senator Fraser introduces the bill. Senator Fraser compares the deregulation of telecom and electricity. In the electric market, a larger portion of customers have switched. That deregulation forced a split between the lines and the service. In the telephone market, the industry did not split between lines and service.
Newer technology is emerging now -- VOIP, cellphones. That is providing a good move toward competition. But when is an industry truly competitive?
The house version of the bill wants to have a free-for-all -- open the market now. The senate approach is to determine if there is competition, particularly in less competitive rural areas.
Also, there is not competition for basic local service. Cell and cable don't provide basic local service -- the "grandma" service. Those rates could go up by 3 or 4 times.
The Senate version
* freezes basic local service prices til 2007
* conduct an PUC interim study of the universal service fund
* assumes a competitive market in large cities, and deregulates on 1/1/06
* provides a market test for suburban areas -- if there 3 competitors to the incumbent, then there is a competitive market, and the market is deregulated in unless the PUC disagrees
* in rural areas (under 30,000 lines), the PUC has discretion to determine if a market is competitive
* reduces intrastate line access charges to parity to interstate calls, reducing the cost of intrastate long distance
* has protection against discriminatory or predatory pricing, even if the market in the area is deregulated
Senator Lucio asks a question about removing a cap on basic local rates til December 2007. The PUC study will cover this.
Amendment 1 - Fraser: Broadband over Powerline is allowed -- including the content from SB1748 need to fact check the bill number,will be interesting to see what happens to this in conference committee.
Amendment 2 - Fraser: Clarifies that electric services can read meters electronically.
Amendment 3 - Estes: Prevents network providers from prohibiting services (but does not ban optional filtering services). Excellent -- this combats telco moves to block Skype and other 3rd party internet telephone services.
Amendment 4 - Barrientos: provides a service to read newspapers for the blind, paid for by Universal Service Funds, at a total cost of $150,000. This was carried by Rep. Naistat in the house, and passed in the house.
Amendment 5 - Lucio: authorizes PUC study on the mechanism for discounts for schools and hospitals.
Senator Van de Putte asks whether the bill affects the obligation of cable operators to carry certain programming does she mean community access?. Senator Fraser says that that issue, and franchise fees, are not addressed in this bill. He also makes a jab at the cable/telco ads -- says that he got no constituent calls because people could not figure out what the ads said.
Senator Van de Putte also asks about 911 service (not covered in this bill).
Senator Jackson asks about the universal service fund. Senator Fraser says that the PUC study will look into where funds are going, and the adequacy of basic local service. Some areas that originally got USF funds -- like Carrolton and Flower Mound -- are no longer rural.
Senator Jackson asks about the total of the Universal Service Funds. Senator Fraser says that is $600,000,000. The cost is about 10% of basic local service that goes for the Universal Service Fund.