LANSING – Though there are still differences between the House and the Senate on the rewrite of the Michigan Telecommunications Act, Rep. Mike Nofs (R-Battle Creek) said he expected few changes in the basic structure of the bill he has put before his committee.
Nofs told Gongwer News Service that his combination of workgroups and private meetings with the interest groups put not only all of the issues on the table, but in most cases their best offers for resolution of those issues.
“The major issues are pretty well presented, it’s just how to accomplish them,” Mr. Nofs said of the bill (HB 5237). “I think we’ve tapped all those schemes to let people talk openly and give us the best ideas.”
For instance, he said the House bill provides 100 calls as the basic plan because that was the number phone companies told him they could accept. “The phone companies said we probably could eat the small increase. I heard that from three different phone companies,” Nofs said.
SBC was not one of those companies, arguing that the increased number of calls over the size of its network would be more than it could handle without a rate increase. The company is pushing to cut the 200-call plan in the Senate version, a plan Mr. Nofs said he had originally supported, to 75 calls.
“I’m going to try to stick to 100,” he said.
But in many areas SBC will be having its way. In discussing the wavering of prior iterations of the act between incumbents and competitors, Nofs admitted that his version of the rewrite does tend to favor the incumbents, a shift from the current act that favored competitors.
Some of that shift, he said, is by necessity. “In March they took away the UNE-P platform, which is what the 2000 act was based on,” he said. “A lot of small phone companies are gong to dry up because the federal government took away UNE-P.”
The unbundled network element platform was a discounted way for competitors to resell parts or all of the services offered by the incumbent providers. But federal courts ruled that the Federal Communications Commission, not the state utilities commissions, had the sole authority to decide if UNE-P should be available in each exchange.
Rather than conduct its own investigations into the markets in each exchange, the FCC ruled that UNE-P would no longer be available beginning in 2006.
But Nofs said some of the shift in the act is by design. “They’re going to have to make an investment in Michigan. If you do that, that’s who we’re trying to protect,” he said of the competitor companies. “The medium-sized companies and the big phone companies will be pretty well happy with the bill. The smaller ones, they were hoping we’d be able to protect them and we’re not going to be able to.”
In part, those basing their business on leasing service from other providers are being left out because imposing the regulation they ask could be untenable, Nofs said. Under the current act, UNE-P rates and retail rates are set by the Public Service Commission. The House bill anticipates only a range of rates set for the basic residential service, with all other service costs set by market forces.
“Some of (the competitors) want the wholesale rate below the retail rate,” he said. “The retail rates we’re doing would fluctuate. Wholesale rates would fluctuate. How does the MPSC monitor that?”
The companies that are investing in physical infrastructure in the state are boosting the state economy. “Obviously if you have investments you have jobs and Michigan needs that real bad,” he said.
The 2000 act also did not anticipate the growth in methods of carrying a telephone competition, Nofs said. From his cell phone, the only phone service at his home, he said competition over the next four years, when the proposed new act would expire, will come from new technology, not from finding cheaper ways to provide service duplicating that of the incumbent local phone companies.
“I read and learned and listened a lot,” Nofs said. “The issue is not as much about telephone wire service. It’s the different platforms that will give more customers choice. If you have two or three different platforms, that’s where the competition’s going to come in the future.”
The basic residential service needs to continue to be regulated as part of the consumer protections in the act, Nofs said. And, though it will be discussed, he was not convinced those same protections still needed to be proffered even to small business.
He said there had been discussions of allowing the basic rate plan to businesses with fewer than five lines, but he said the service providers had indicated there is competition for even those businesses with two lines.
“If you regulate it, then that’s the price and do you stifle development,” he said. “I didn’t want to keep their rates artificially high.”
Among the issues Nofs expects to be hashed out in committee are the limits on municipal and school telephone services. The bill limits the ability of local governments to offer local telephone service and prohibits educational institutions from reselling their excess network capacity.
Schools and cities have already reacted angrily to the provisions, with the Michigan Municipal League issuing a press release to complain of the provisions the day the bill was introduced.
But Nofs said he was willing to discuss the issues, though he did not commit to any changes.
He was particularly working, however, to accommodate concerns raised by the committee’s Democratic caucus. While he had a vision for the new act, he said he also did not want to alienate those on the other side of the aisle over any issues. “Nineteen different individuals giving input is better than 11,” he said.
Though he is about a month behind his Senate counterpart, Nofs said the schedule he has laid out for reporting a bill will still have a new telecommunications act on the governor’s desk before the current act expires. He plans to report the bill on October 19, with it moving to the Senate the following week. And he said the Senate bill should be to the House for review by that time.
The goal also is to report a bill that will need little work once it gets to the floor, he said, contrasting his efforts with the expectation that there will be a number of amendments offered on the Senate floor.
Though he has not yet met with Sen. Bruce Patterson (R-Canton), chair of the Senate Technology and Energy Committee, Mr. Nofs said he does not expect difficulties in working out any differences between the two chambers. “In the end the House and Senate will sit down and discuss a final version,” he said. “If goes to conference committee, I don’t see that there going to be that significant differences.”
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