Controversial Michigan Deregulation Bill Nears Vote

AT&T, which is backing the measure, and SB-636 sponsor Sen. Mike Nofs, R-Battle Creek, said ILECs shouldn’t be forced to continue maintaining a withering technology. They said AT&T’s landline customers have dropped 71 percent since 2000. An AT&T spokesman said the bill would streamline a “duplicative” process that now requires approval from both federal and state bodies to drop the service. Nofs, who had no comment for this story, told the Detroit Free Press (http://on.freep.com/O52A6v) that “the real question” is how can companies be required to keep investing in “antiquated” technology. The bill is drawing fire from AARP and law enforcement organizations, which worry people in bad cellphone reception areas, particularly in rural parts of the state, would have trouble calling for help in an emergency. They worry that IP phones would go out in a power outage. CLECs like Sprint and Clear Rate Communications also worry that ILECs, once no longer providing traditional copper-wire service, would argue they are under no obligation to provide IP interconnection to other companies. That would cripple Clear Rate, said CEO Thane Namy. “The idea is to eliminate CLECs and other competitors,” Namy said of the bill. “It’s un-American. People expect to walk into the grocery store and be able to pick from different kinds of ketchups.”

During December’s Senate debate, AARP ran radio ads in most of the state, including in Nofs’ district. The ad said: “For the thousands of Michigan seniors who depend on their reliable home phone for medical needs, security, and in case of emergency -- landline service isn’t just a phone line; it’s also a lifeline.” It said seniors “can’t risk wireless service that isn’t as good as the landline phone they have now. The bill would phase out landline service across the state within three years -- including in rural areas. Senate bill 636 puts all Michiganders at risk.” Campaign finance reports analyzed by FollowtheMoney.org (http://bit.ly/1gePET3) found that AT&T has been one of Nofs’ main contributors. The company gave Nofs $7,000 in his 2010 re-election campaign, making the company Nof’s 16th-biggest contributor in the election. The Telecommunications Association of Michigan, which supports the bill, also gave Nofs $7,400, said FollowtheMoney.org, a project of the National Institute on Money in State Politics.

Under the bill, ending landline service would still require FCC approval, but the Michigan Public Service Commission would see its role lessened. If a customer filed a complaint after the discontinuation of service, the PSC would investigate whether the area still has comparable voice service, including VoIP and wireless, with reliable access to emergency service. If not, the PSC could declare an emergency in the area, saying it’s not served by at least one voice service provider offering comparable voice service with reliable access to 911 and other emergency services. The PSC could then ask other providers to voluntarily provide the service, including through VoIP or wireless, but it couldn’t force the current provider to do so. Should there be no willing provider, the provider that ended the service would be required to step back in. If VoIP, wireless or another technology were able to provide the service, the provider would not have to continue traditional landline service.

The bill would make Michigan the latest state to deregulate during the IP transition. The PSC is neutral on the legislation, said an agency spokeswoman. It has fewer concerns than originally about the bill because state regulators would still have a role if a company seeks to end traditional landline service, she said. Advocacy groups like AARP argue against weakening the state’s authority. “Why replace the MPSC, which knows Michigan and its telecommunications industry well, with a federal agency that is not as familiar with state issues?” asked an AARP spokesman. Requiring a citizen to deal with the bureaucracy and expense of filing a complaint with the state commission is unrealistic, he said. Fears of the bill’s potential impact on interconnections are premature, said AT&T’s spokesman. The FCC hasn’t ruled whether interconnection agreements are required for IP under sections 251 and 252 of the Telecom Act, as they were with the old copper phone lines, he said.

Of concern to companies like Clear Rate is AT&T’s stance in recent interconnection cases in Michigan and in Indiana that it’s not required to provide IP interconnections with Sprint. AT&T said in its brief in the Michigan case (CD Feb 14 p6) that “the interconnection requirement in section 251(c)(2) of the Telecommunications Act of 1996 does not apply to IP-to-IP interconnection” (http://bit.ly/1dIvnay). The Michigan PSC ruled AT&T must connect with Sprint. AT&T’s spokesman didn’t say whether it plans to appeal. Sprint, in an Oct. 28 letter to Nofs, echoed concerns of Clear Rate’s Namy. “The elimination of Service Discontinuance procedures will allow an ILEC to discontinue providing basic local telephone service at its choosing without input from affected customers or deliberation by the Michigan Public Service Commission,” the company wrote. “The proposed Service Discontinuance language allows the ILECs to argue they no longer are required to connect their networks with competitors to exchange voice calls at fair prices and terms.” Concerns on reliability of VoIP or wireless service in making emergency calls are “not accurate,” said the AT&T spokesman. He said law enforcement agencies are transitioning to IP-based 911 services.

The Michigan Communications Directors Association, which represents law enforcement dispatch operations, opposes the bill, said past president Jim Valentine. “We have concerns whether the technology will reliably allow us to locate someone in a time of emergency. Basically, in a rural area, what towers a carrier hits is the difference between pinpointing where people are or whether we're a quarter of a mile away” from the person, said Valentine. AT&T’s spokesman disputed that the bill is premature, given the FCC is requesting trials to test the effects of the IP transition on things like public safety. By acting now, Michigan will be better prepared for the transition, said the spokesman. “We ought to be looking at ways to position our state at the front of the line,” he said. “The procedure in Michigan holds it back.”