1 1 2 COMMONWEALTH OF PENNSYLVANIA 3 HOUSE OF REPRESENTATIVES HOUSE CONSUMER AFFAIRS COMMITTEE 4 5 6 RYAN OFFICE BUILDING ROOM 205 7 HARRISBURG, PENNSYLVANIA 8 9 WEDNESDAY, FEBRUARY 11, 2009 10 9:15 A.M. 11 IN RE: INFORMATIONAL MEETING 12 TELECOMMUNICATIONS, CABLE AND WIRELESS 13 INDUSTRY 14 15 BEFORE: 16 HONORABLE JOSEPH PRESTON, JR., CHAIRMAN 17 HONORABLE ROBERT W. GODSHALL HONORABLE WILLIAM F. ADOLPH, JR. 18 HONORABLE BRYAN BARBIN HONORABLE SHERYL DELOZIER 19 HONORABLE EUGENE DePASQUALE HONORABLE FRANK FARRY 20 HONORABLE WILL GABIG HONORABLE MARC GERGELY 21 22 ______________________________________________ 23 24 25 2 1 (CONT'D) 2 HONORABLE SETH GROVE 3 HONORABLE ROB W. KAUFFMAN HONORABLE WILLIAM C. KORTZ, II 4 HONORABLE BOB MENSCH HONORABLE NICK KOTIK 5 HONORABLE ROBERT MATZIE HONORABLE JOSEPH A. PETRARCA 6 HONORABLE TINA PICKETT HONORABLE HARRY READSHAW 7 HONORABLE DAVE REED HONORABLE CHRIS SAINATO 8 9 10 ALSO PRESENT: 11 GAIL DAVIS, MAJORITY EXECUTIVE DIRECTOR 12 JAKE SMELTZ, MINORITY EXECUTIVE DIRECTOR DAVID V. VITALE, ESQUIRE 13 TIM SCOTT, RESEARCH ANALYST BETH ROSENTEL, RESEARCH ANALYST 14 MARCI SANTORO, COMMITTEE LEGISLATIVE ASSISTANT 15 16 BRENDA S. HAMILTON, RPR REPORTER - NOTARY PUBLIC 17 18 19 20 21 22 23 24 25 3 1 INDEX 2 NAME PAGE 3 IRWIN "SONNY" POPOWSKY 3 CONSUMER ADVOCATE, PA OFFICE OF 4 CONSUMER ADVOCATE 5 TELECOMMUNICATIONS PANEL 6 STEVEN J. SAMARA, VICE PRESIDENT 22 7 PENNSYLVANIA TELEPHONE ASSOCIATION 8 FRANK P. BUZYDLOWSKI, DIRECTOR 36 STATE GOVERNMENT RELATIONS, VERIZON 9 COMMUNICATIONS 10 CABLE PANEL 11 BRIAN BARNO, VICE PRESIDENT 65 12 GOVERNMENT AFFAIRS, BROADBAND CABLE ASSOCIATION PA (BCAP) 13 JIM D'INNOCENZO, VICE PRESIDENT 71 14 LEGISLATIVE AFFAIRS, COMCAST 15 GALE GIVEN, PRESIDENT 76 VERIZON PENNSYLVANIA 16 17 WIRELESS PANEL 18 GARY HOREWITZ, MANAGER GOVERNMENT 96 AFFAIRS, SPRINT-NEXTEL 19 DAVID KERR, VICE PRESIDENT EXTERNAL 103 20 AFFAIRS, AT&T PENNSYLVANIA 21 DANIEL MULLIN, EXECUTIVE DIRECTOR 109 STATE PUBLIC POLICY, VERIZON 22 WIRELESS 23 24 25 4 1 P R O C E E D I N G S 2 - - - 3 CHAIRMAN PRESTON: The hour and time 4 of 9:15 having come and gone by, I'd like to 5 be able to call the meeting of the Consumer 6 Affairs Committee to order. 7 If we could, without an objection, 8 I'd like if the members introduce themselves 9 and their respective counties who they 10 represent. That will also stand for the 11 partial roll call for those members who are 12 here. 13 If I could start to my right and to 14 the audience's left. 15 REPRESENTATIVE KORTZ: Good morning. 16 Bill Kortz, Allegheny County, 38th District. 17 REPRESENTATIVE SAINATO: I'm 18 Representative Chris Sainato. I represent the 19 9th Legislative District, which is Lawrence 20 County and a small section of Beaver County. 21 REPRESENTATIVE READSHAW: Good 22 morning. I'm Harry Readshaw, Allegheny 23 County, 36th Legislative District. 24 REPRESENTATIVE GABIG: Good morning. 25 My name is Will Gabig. I'm from Cumberland 5 1 County. 2 REPRESENTATIVE BARBIN: Good 3 morning. I'm Bryan Barbin, the 71st 4 District. I represent Johnstown and Cambria 5 County. 6 REPRESENTATIVE FARRY: Frank Farry. 7 Represent the 142nd District in Bucks County. 8 REPRESENTATIVE PICKETT: Tina 9 Pickett, Bradford, Sullivan and Susquehanna 10 Counties. 11 REPRESENTATIVE REED: Dave Reed, 12 Indiana County. 13 REPRESENTATIVE KOTIK: Nick Kotik, 14 45th Legislative District, Allegheny County. 15 REPRESENTATIVE MENSCH: Bob Mensch, 16 Montgomery County. 17 REPRESENTATIVE GODSHALL: Bob 18 Godshall, Montgomery County. 19 CHAIRMAN PRESTON: And if we can have 20 the respective staff. 21 EXECUTIVE DIRECTOR DAVIS: Gail 22 Davis, Executive Director for the Committee 23 for the Democratic Caucus. 24 EXECUTIVE DIRECTOR SMELTZ: Jake 25 Smeltz, Committee Director for the Republican 6 1 Caucus. 2 MR. VITALE: Dave Vitale, legal 3 counsel for the Committee. 4 MR. SCOTT: Tim Scott, research 5 analyst for the Democratic Caucus. 6 MS. SANTORO: Marci Santoro, 7 Secretary for the Democratic Caucus. 8 REPRESENTATIVE ADOLPH: Bill Adolph, 9 also from Delaware County, is over here at the 10 table. 11 REPRESENTATIVE DELOZIER: Sheryl 12 Delozier, Cumberland County. 13 CHAIRMAN PRESTON: This is the 14 continuation of the series of informational 15 committee hearings that we've had for 16 discussions so that we'll get the respective 17 industries and tomorrow with the public 18 utility commissioners as far as where we've 19 been, where we're going, and some of the 20 issues that are pertinent to them. 21 And also I think for the benefit of 22 the members who were on the committee last 23 year, last term, and also for the new 24 members. 25 50 percent of our committee is 7 1 different than last term. I think this is 2 important that we be able to do this now so 3 that when we -- when we get into the -- 4 further into the session, the members will -- 5 in themselves will be able to have a better 6 understanding of what the -- some of the 7 things that are going on in the past, what's 8 happening -- what's happening in the future as 9 we catch up with future trends. 10 That being said, I'll also recognize 11 the minority chairman. Mr. Godshall, any 12 comments? 13 REPRESENTATIVE GODSHALL: Just very 14 briefly, there's a -- as the chairman said, a 15 series of meetings for information purposes 16 which I think will prove invaluable to the 17 committee. 18 I appreciate your attendance and I 19 appreciate everybody's participation that came 20 here today. 21 CHAIRMAN PRESTON: Our first person 22 to present is Sonny Popowsky who is the 23 consumer advocate, Pennsylvania Office of 24 Consumer Advocate, under the Attorney 25 General's Office. 8 1 We've asked Mr. Popowsky, I guess, to 2 attend most of the meetings because he is the 3 person who represents the consumer and the -- 4 and the people. 5 He has been here for quite a while. 6 I guess you might say an expert in his own 7 way, and we're looking forward to hearing your 8 testimony, Sonny, as we go and then we'll be 9 able to hear some different panelists from the 10 industry's concerns. 11 MR. POPOWSKY: Thank you, Chairman 12 Preston, Chairman Godshall, members of the 13 committee. 14 I hope you're not yet tired of 15 hearing from me. I guess this is the third 16 time in about a week, but it is a great, great 17 pleasure always to work with the members of 18 this committee and I really look forward to 19 working with you, especially the new members, 20 because I know you have your work cut out for 21 you. 22 As in prior hearings on this subject, 23 that is, telecommunications, cable and -- and 24 wireless, I will focus my comments on matters 25 involving our traditional land line telephone 9 1 companies, because, as many of you know, our 2 office has no direct jurisdiction with respect 3 to cable or wireless communications 4 companies. 5 Nevertheless, as you also know, the 6 lines between these different types of 7 communications technologies have become 8 increasingly blurred, and I couldn't help but 9 notice that you have Verizon, for example, on 10 all three industry panels, wireless, telephone 11 and cable. 12 I think the convergence among the 13 forms of communication was illustrated last 14 year in the debates before the General 15 Assembly on Senate Bill 1000, which was 16 designed to prohibit regulation by the 17 Pennsylvania PUC, or other state agency -- 18 agencies, over the technology known as Voice 19 Over Internet Protocol, or VoIP. 20 I initially opposed that legislation 21 as it came out of the Senate because I was 22 concerned that the way in which it was 23 originally drafted could ultimately lead to 24 the total deregulation of all telephone 25 service, including basic residential service, 10 1 if any part of that service utilized Internet 2 or any type of Internet protocol. 3 I was honored to work with the 4 members of this committee, Representative 5 Mensch and others, and -- and, in fact, the 6 bill was -- was amended by this committee to 7 address that specific concern and to make it 8 clear that nothing in the bill precluded the 9 PUC's continued regulation of basic protected 10 telephone service, regardless of the 11 technology used to provide that service. 12 And with that amendment, the bill 13 passed the House and Senate and was signed by 14 Governor Rendell. 15 Now, Senate Bill 1000 was also 16 amended or clarified to make it clear that 17 that bill did not modify the Pennsylvania's -- 18 Pennsylvania PUC's authority with respect to 19 what are called access charges. That is the 20 charges that are paid to our incumbent local 21 telephone exchange companies by other 22 telecommunication companies, such as long 23 distance providers, in order for those 24 companies to connect interexchange calls to 25 customers on their networks. 11 1 Now, that issue was of particular 2 importance to Pennsylvania's smaller rural 3 telephone companies who rely in large part on 4 access charges from other telecommunications 5 companies to support the cost of their 6 network. 7 And I'm sure you'll hear it from 8 Mr. Samara on that in the next panel. 9 Now, I personally share or my office 10 shares the concern of the rural telephone 11 companies on this issue.