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Consumer Affairs 8-24-15.Trn 1 1 2 COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES 3 CONSUMER AFFAIRS COMMITTEE 4 MAIN CAPITOL BUILDING 5 ROOM 140 HARRISBURG, PENNSYLVANIA 6 7 PUBLIC HEARING HOUSE BILL 1417 8 9 10 MONDAY, AUGUST 24, 2015 1:00 P.M. 11 12 13 BEFORE: 14 HONORABLE ROBERT GODSHALL, MAJORITY CHAIRMAN HONORABLE GENE DIGIROLAMO 15 HONORABLE ELI EVANKOVICH HONORABLE THOMAS H. KILLION 16 HONORABLE TINA PICKETT HONORABLE THOMAS QUIGLEY 17 HONORABLE MARCY TOEPEL HONORABLE ROBERT MATZIE, 18 ACTING MINORITY CHAIRMAN HONORABLE RYAN BIZZARRO 19 HONORABLE TINA DAVIS HONORABLE MARTY FLYNN 20 HONORABLE MARK A. LONGIETTI HONORABLE BRANDON NEUMAN 21 HONORABLE PETER SCHWEYER HONORABLE PAM SNYDER 22 23 24 25 2 1 ALSO PRESENT: 2 HONORABLE SANDRA MAJOR 3 AMANDA RUMSEY, COUNSEL, EXECUTIVE DIRECTOR (R) STEPHEN BALDWIN, RESEARCH ANALYST (R) 4 JANE HUGENDUBLER, LEGISLATIVE ADMINISTRATIVE ASSISTANT (R) 5 ELIZABETH ROSENTEL, EXECUTIVE DIRECTOR (D) JAMIE MACON, LEGISLATIVE ASSISTANT (D) 6 JERRY LIVINGSTON, RESEARCH ANALYST (D) BRETT BIGGICA, RESEARCH ANALYST (D) 7 8 9 10 11 12 13 14 BRENDA J. PARDUN, RPR 15 REPORTER - NOTARY PUBLIC 16 17 18 19 20 21 22 23 24 25 3 1 INDEX 2 NAME PAGE 3 OPENING COMMENTS AND INTRODUCTIONS 5 4 STEVEN TOURJE, PRESIDENT AND CEO 9 NORTHEASTERN TELEPHONE COMPANY 5 TOM BAILEY, DIRECTOR 17 6 STATE REGULATORY AND LEGISLATIVE AFFAIRS CENTURYLINK 7 GARY ZINGARETTI, SENIOR VICE PRESIDENT 20 8 ICORE CONSULTING, LLC 9 GLADYS M. BROWN, CHAIRMAN 32 PA PUBLIC UTILITY COMMISSION 10 FRANK BUZYDLOWSKI, DIRECTOR 41 11 STATE GOVERNMENT RELATIONS, VERIZON 12 CARL ERHART, VICE PRESIDENT 51 STATE GOVERNMENT AFFAIRS, VERIZON 13 DAVID KERR, REGIONAL VICE PRESIDENT 58 14 EXTERNAL AFFAIRS, AT&T 15 RAY LANDIS, ADVOCACY MANAGER 67 AARP PENNSYLVANIA 16 GERARD KEEGAN, SENIOR DIRECTOR 73 17 STATE LEGISLATIVE AFFAIRS CTIA, THE WIRELESS ASSOCIATION 18 JAMES M. D ’INNOCENZO, VICE PRESIDENT 86 19 STATE GOVERNMENT, LEGISLATIVE, AND REGULATORY AFFAIRS, PA/OH, COMCAST 20 BETH CHOROSER, EXECUTIVE DIRECTOR 90 21 REGULATORY AFFAIRS, LEGAL REGULATORY DEPARTMENT, COMCAST 22 TANYA MCCLOSKEY 102 23 ACTING CONSUMER ADVOCATE PA OFFICE OF CONSUMER ADVOCATE 24 CLOSING REMARKS 112 25 4 1 SUBMITTED WRITTEN TESTIMONY 2 WINDSTREAM 3 FRONTIER COMMUNICATIONS 4 CONSOLIDATED COMMUNICATIONS 5 T-MOBILE 6 BROADBAND CABLE ASSOCIATION OF PENNSYLVANIA 7 PENNSYLVANIA COALITION AGAINST DOMESTIC 8 VIOLENCE 9 (See submitted written testimony 10 and handouts online.) 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 5 1 P R O C E E D I N G S 2 MAJORITY CHAIRMAN GODSHALL: Good 3 afternoon. The hour of 1 o ’clock having 4 arrived, I’d like to call the meeting to 5 order. This is a hearing on House Bill 1417. 6 The hearing is being recorded. 7 And I’d like to get started by 8 having the members introduce themselves very 9 quickly. Formal roll call is not necessary. 10 We will start over here on the far side. 11 REPRESENTATIVE NEUMAN: 12 Representative Brandon Neuman, from Washington 13 County. 14 REPRESENTATIVE BIZZARRO: 15 Representative Ryan Bizzarro, 3rd District, 16 Erie County. 17 REPRESENTATIVE FLYNN: 18 Representative Marty Flynn, 113th District, 19 Lackawanna County. 20 REPRESENTATIVE SCHWEYER: 21 Representative Peter Schweyer, 22nd District, 22 Lehigh County. 23 REPRESENTATIVE SNYDER: 24 Representative Pam Snyder, 50th District, 25 Greene County. 6 1 REPRESENTATIVE LONGIETTI: 2 Representative Mark Longietti, 7th District, 3 from Mercer County. 4 REPRESENTATIVE PICKETT: 5 Representative Tina Pickett, Bradford, 6 Sullivan, and Susquehanna County. 7 REPRESENTATIVE QUIGLEY: 8 Representative Tom Quigley, 146th District, in 9 Montgomery County. 10 REPRESENTATIVE EVANKOVICH: Eli 11 Evankovich, representing the best parts of 12 Westmoreland and Allegheny counties. 13 REPRESENTATIVE TOEPEL: Marcy 14 Toepel, 147th District, Montgomery County. 15 REPRESENTATIVE DIGIROLAMO: Gene 16 DiGirolamo, 18th, Bucks County. 17 REPRESENTATIVE KILLION: Tom 18 Killion, Delaware County, 168th District. 19 REPRESENTATIVE DAVIS: Afternoon. 20 Tina Davis, Bucks County. 21 REPRESENTATIVE MAJOR: State 22 Representative Sandy Major, Susquehanna and 23 Wayne County, and one of the prime sponsors of 24 the legislation. Thank you. 25 MAJORITY CHAIRMAN GODSHALL: Bob 7 1 Godshall, Montgomery County. 2 REPRESENTATIVE MATZIE: Rob 3 Matzie, Beaver and Allegheny County. 4 MAJORITY CHAIRMAN GODSHALL: Want 5 to thank you for your attendance. We have a 6 real good attendance with the legislators here 7 today. 8 House Bill 1417 requires the PUC 9 to undertake a full investigation of the 10 Pennsylvania Universal Service Fund and 11 maintains the fund in its current form until 12 January 1st, 2022. 13 The Pennsylvania Universal Service 14 Fund provides support to rural incumbent 15 telecommunications carriers with the intent of 16 keeping basic telephone service affordable to 17 consumers in high-cost-of-service areas. 18 We have a very full agenda today, 19 and I ask the presenters to keep their 20 comments within the fifteen-minute time limit 21 provided. We will be holding up signs, 22 verifying when you have five minutes and one 23 minute time remaining when time will be up. 24 I also ask the members to be aware 25 of the full agenda and our time constraints 8 1 when asking questions. If you have questions 2 that we don’t get to today, please contact my 3 staff and they will be happy to contact the 4 presenters with additional questions and 5 provide responses to the committee. 6 I’d like to -- my co-chairman 7 today is Representative Matzie. I’d like to 8 offer him time at this point. 9 ACTING MINORITY CHAIRMAN MATZIE: 10 Considering your time restraints, I’ll keep my 11 comments very brief. 12 Thank you, Mr. Chairman, for the 13 opportunity. Look forward to a learning 14 experience here today with this full agenda. 15 But, real quickly, just want to 16 publicly welcome back our executive director, 17 Beth Rosentel, who was out on maternity leave, 18 after giving birth to a beautiful, little baby 19 girl. So, we’re happy she’s back in the fold 20 with us over here on the Consumer Affairs 21 Committee. 22 So, welcome back, Beth. 23 MAJORITY CHAIRMAN GODSHALL: At 24 this time, I’d like to -- there’s going to be 25 a small change, a minor change in the agenda. 9 1 BCAP is unable to testify today, but its 2 comments will be entered into the record. 3 Comcast’s presentation will be moved into the 4 agenda time slot reserved for BCAP, and the 5 remainder of the agenda is unchanged. 6 At this time, we have the first 7 presenter, the Rural Local Exchange Company 8 panel, Tom Bailey, from CenturyLink; Steven 9 Tourje, from Northeastern Telephone Company; 10 and Gary Zingaretti, ICORE Consulting, LLC. 11 And they have been granted a little bit of 12 extra time because they have three -- there’s 13 three companies, and they have requested 14 individual time slots. We combined that into 15 one, so we’re going to be allowing you the 16 extra time over the fifteen minutes but about 17 five minutes extra. So, that will be up to 18 you. 19 Gentlemen, it’s up to you, 20 whenever you’re ready. Please identify 21 yourself when you start. 22 MR. TOURJE: Good afternoon, 23 Chairman Godshall and members of the House 24 Consumer Affairs Committee. 25 My name is Steven Tourje, and I am 10 1 president and chief executive officer of the 2 Northeastern Pennsylvania Telephone Company, a 3 small, rural, local exchange carrier 4 headquartered in Forest City, Pennsylvania. 5 Our company was founded in 1900 and currently 6 offers landline phone, television, Internet, 7 and wireless services to residential and 8 business customers in a 520-square-mile 9 service territory, covering parts of 10 Susquehanna, Wayne, and Lackawanna counties. 11 We currently serve 8,620 landline phone 12 customers. 13 House Bill 1417 is not about rural 14 telephone companies. It’s all about rural 15 telephone customers. NEP and the other 16 Pennsylvania Telephone Association member 17 companies are good at serving rural customers. 18 We've been doing it for more than a century. 19 But times are changing, and we've had to 20 change with them in order to ensure that our 21 customers will continue to receive affordable 22 landline service. 23 Just like my colleagues in the 24 PTA, we are the carriers of last resort, which 25 means that anyone, anywhere in our service 11 1 territory who requests landline service from 2 us is delivered service. We are the only 3 segment of the telecommunications industry 4 which is bound by that contract, and House 5 Bill 1417 statutorily binds us to that 6 commitment going forward. 7 While some carriers enjoy an 8 unregulated or lesser-regulated environment 9 and are free to serve customers where it makes 10 economic sense, NEP and the rest of the RLECs 11 serve rural, high-cost, uneconomic areas in 12 the commonwealth. And those areas are 13 becoming more uneconomic and higher cost even 14 as we speak. 15 With all of the changes occurring 16 at the federal level with regard to access 17 charge reform and re-tasking the federal 18 Universal Service Fund away from traditional 19 landline service, the carrier-of-last-resort 20 commitment contained in Representative Major’s 21 and Representative Hanna’s bill is only 22 possible if the Pennsylvania Universal Service 23 Fund is maintained in its current form. If 24 the PA USF decreases or is eliminated 25 altogether, Pennsylvania’s RLECs face the 12 1 unevitable proposition of having to move basic 2 rates closer to costs or making other cost- 3 saving changes which we fear will negatively 4 impact rural customers.
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