StateImpact
4:08 pm
Wed April 18, 2012

NH House Mulls Deregulating Phone Service

Fairpoint’s struggles since taking over Verizon’s northern New England land line network in 2007 have been well-documented in the media with varying levels of snark.  A running theme the company’s cited over the years has been competition-stifling state regulations.  Now, SB 48, a bill Fairpoint believes will help remedy the situation, is making its way through the House.  Nashua Telegraph reporter David Brooks writes:

“New Hampshire appears well on its way toward deregulating the price of retail telephone service and loosening most other aspects of a century of government oversight, although details about Internet-based voice communication remain to be worked out…

The bill will be discussed in a working session by the Science, Technology and Energy Committee, partly in response to some concerns from the Public Utilities Commission. But it appears headed to the floor of the House soon, where it has bipartisan support. It has already passed the state Senate.”

There are two key facets of the regulatory landscape the bill would remove.  The least complicated deals specifically with telecoms.  If the bill passes, Brooks writes Fairpoint could “switch residential pricing and services” without clearing it with the Public Utilities Commission.  So basically, Fairpoint won’t have to deal with the PUC much at all.*

But these days, competition against phone companies comes from more than just other telecoms.  Cable’s got some serious skin in the game, thanks to Voice over Internet Protocol, or VoIP.  If you bundle your phone, internet, and cable service with Comcast, for example, the company’s using your internet connection (by way of the cable box) to let you talk over the phone.  With the rapid diversification of cable companies’ business models, figuring out if, and how, exactly, states can regulate them can be tricky business.

Last year, the PUC decided to err on the side of regulation.  Brooks points to the commission’s ruling that “in some markets, Comcast’s voice service met the definition of public utility in state law,” thanks to its phone service offerings.  That meant the PUC could, to some extent, regulate the cable giant.

That ruling got phone service providers and legislators thinking.

And that leads to the second big issue tackled by SB 48:

“The bill also says the state has no regulatory authority over services that use Internet Protocol rather than switched telephone networks. This is an important issue because most newer services, including phone calls over cable modems and Net-based voice services like Vonage and Skype, are what is usually called IP-enabled service or VOIP (voice over IP).

Some fear that completely freeing IP from regulation could kill the long-established safety net of universal, basic phone service from some places, such as remote rural areas, if traditional telephone ‘twisted pair’ copper lines no longer become viable.

That concern led Maine, in a deregulation bill that became law last week, to establish a provision mandating that a Provider of Last Resort always be available, whether it be FairPoint, a smaller phone company, a cable firm or mobile network or even an Internet-only company.”

Brooks’ article is well worth the read, especially since it gets into the specific reasons why Fairpoint and some businesses support the bill, while others in the industry don’t.

Copyright 2012 StateImpact New Hampshire. To see more, visit http://stateimpact.npr.org/new-hampshire/.