Date: 03/25/2014
Final
Sponsor/Stakeholder Telecom Bill Presentation
HOUSE COMMITTEE ON BUSINESS, LABOR, ECONOMIC, & WORKFORCE DEVELOPMENT
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11:01 AM -- Sponsor Presentation and Panel Discussion of Telecommunications Bill Package
Representative Williams, chair, called the meeting to order. A quorum was present. Representative Williams provided a brief overview of the telecommunications reform bills on the day's calendar and explained that the bills were a package designed to modernize the state's telecommunications law and increase broadband coverage throughout the state. Representative Williams stated that the morning would include two panel presentations to provide an overview of the bill package. She said the first panel presentation would focus on the three bills related to telecommunications modernization: House Bill 14-1330, Updating Telecommunications Technology Language; House Bill 14-1329, Deregulate Internet Protocol (IP) Emerging Tech Telecom; and House Bill 14-1331, Regulate Basic Local Exchange Services. Representative Murray provided a history of past legislative attempts to modernize the state's telecommunications laws.
The following panelists offered brief presentations on those bills that sought to provide telecommunications modernization:
11:08 AM -- Jim Campbell, representing CenturyLink, discussed the telecommunications modernization bills. Mr. Campbell stated that these telecommunications bills are designed to recognize that the marketplace has changed. He stated that the bills would encourage investment while offering consumer protection through free market enterprise. He discussed the bills multiple "clawback" provisions that would allow the Colorado Public Utilities Commission (PUC) to regulate providers and set costs if certain criteria was not being met in the free market.
11:12 AM -- Kristie Ince, representing TW Telecom, provided an overview of her organization. Ms. Ince stated that the legislation is a balance that protects consumer and competition. She discussed the history of TW Telecom, which started when the markets were opened to competition in the 1990s. She stated that her company continues to be dwarfed by legacy telecommunications industries. Ms. Ince stated her company's appreciation that these bills maintain the PUC's authority over wholesale matters and carrier-to-carrier disputes; she said while modernization is needed, so are regulatory backstops. She also stated that where there is effective competition, there should no longer be subsidy.
11:16 AM -- Milt Doumit, representing Verizon, discussed legislation in other states related to VoIP. Mr. Doumit stated that 28 states have passed legislation that deregulates Voice over Internet Protocol (VoIP) in the past three years. He discussed the purpose of the HB 14-1329, which he said exempts VoIP from regulation, codifies current law, and provides certainty to providers. He discussed data use rates of customers and said the bill does not touch the PUC's authority over 9-1-1.
11:21 AM
The panel began to respond to questions from the committee.
Representative Rosenthal asked the panel why deregulation was needed if the market was already competitive. Representative Kraft-Tharp asked a question about the potential for rate increases with no PUC regulation, and cited the example of California. Representative Rosenthal asked follow-up questions about the cost of basic service and the regulation outlined in HB 14-1331. Representative Exum asked for the panel to expand on consumer protection provisions in the three bills. Representative Rosenthal asked the panel to discuss the protections of landline service as outlined in the bills.
11:31 AM
Representative Szabo asked when the telecommunications terminology in statute was last updated. Representative Szabo asked about the reasons for updating definitions. Representative Rosenthal asked if deregulation has caused consumer prices to go down in any states.
11:35 AM
Representative Murray and Representative Coram opened the second panel discussion by providing an overview of the two bills related to broadband deployment: House Bill 14-1328, Connect Colorado Broadband Act; and House Bill 14-1327, Measures Expand Deployment Communications Network. The following panelists offered brief presentations on those bills that sought to improve broadband deployment.
11:39 AM -- Jeff Weist, representing the Colorado Cable Telecommunications Association, discussed his organization. Mr. Weist stated that the intent of HB 14-1327 is to find a way for the private sector to work with local governments to accelerate broadband for underserved areas of Colorado and to increase broadband speeds in these areas. The bill includes sales tax exemptions and cost-sharing initiatives. He discussed HB 14-1328, and its provisions that safeguard subsidies.
11:41 AM -- Greg Romberg, representing Sprint, discussed two provisions in HB 14-1327. Mr. Romberg discussed the provisions related to siting towers more expediently, on a 90-day to 120-day schedule. He described the siting provision as a way that government can make it easier for private investment, and stated that this regulatory certainty will expedite broadband deployment. He provided an overview of the broadband sales and use tax exemptions in HB 14-1327. He stated his opinion that Colorado assesses tax on telecommunications products at a very high rate, similar to a value-added, or "sin", tax, while most every other industry in state is subject to manufacturers' exemption. He stated that the competition with other states that do not have this tax burden makes it harder for telecommunications industries to get broadband resources into our state.
11:44 AM -- Pete Kirchhof, representing the Colorado Telecommunications Association, discussed his organization's membership, stating that his members served 30 percent of the geography of the state. Mr. Kirchhof discussed the stakeholder process of the bill. He stated that while HB 14-1327 is not perfect, it is a good first step. He said that the state needed to be creative about funding mechanisms for broadband, and discussed the limited federal moneys available for broadband. He stated that HB 14-1327 was a three-part bill that deals with: 1) funding, 2) the process of funds distribution, and 3) grant-making. He discussed the high cost fund and explained that the bill would take money no longer needed to provide rural Colorado with basic service and repurpose those funds for broadband deployment.
11:47 AM -- Jason Hopfer, representing Viaero Wireless, discussed the stakeholder process involved in the crafting of the two bills. He said the key principles were creating a framework that did not increase surcharges and directing deployment to unserved areas. He said the bills set a baseline expectation, providing a floor rather than a ceiling. He said the bills were directed to consumers, created appropriate oversight authority, technology neutral, and aimed to help rural Colorado.
11:48 AM
The panel began to respond to questions from the committee.
Representative Szabo asked the panel about the original intent of the High Cost Fund. Representative Ryden asked if the fund would provide enough incentive to serve rural areas. Representative Hamner asked about the timeline to get broadband deployed to all rural areas. Representative Kraft-Tharp asked about the state's broadband mapping project. Representative Rosenthal asked what type of equipment is covered by the bills.
11:58 AM
Representative Williams made closing remarks on the morning meeting and panel discussion.
12:00 PM
The meeting recessed.