Senate Bill S5731

2009-2010 Legislative Session

Directs the public service commission to conduct an in-depth public interest analysis of proposed mergers by telephone corporations

download bill text pdf

Archive: Last Bill Status - In Senate Committee Energy And Telecommunications Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Mar 26, 2010	print number 5731b
Mar 26, 2010	amend and recommit to energy and telecommunications
Jan 06, 2010	referred to energy and telecommunications
Dec 11, 2009	print number 5731a
Dec 11, 2009	amend and recommit to energy and telecommunications
Jun 01, 2009	referred to energy and telecommunications

Bill Amendments

Original

B (Active)

co-Sponsors

2009-S5731 - Details

Current Committee:: Senate Energy And Telecommunications
Law Section:: Public Service Law
Laws Affected:: Amd §§99 & 100, Pub Serv L

2009-S5731 - Summary

Directs the public service commission to conduct an in-depth public interest analysis of proposed mergers by telephone corporations and other telecommunications services providers over which said commission has jurisdiction.

2009-S5731 - Sponsor Memo

                                 BILL NUMBER:  S5731

 TITLE OF BILL :

An act to amend the public service law, in relation to directing the
public service commission to conduct an in-depth public interest
analysis of proposed mergers by telephone corporations and other
telecommunications services providers over which said commission has
jurisdiction


 PURPOSE OR GENERAL IDEA OF BILL :

This bill would require the public service commission to conduct a
closer scrutiny of proposed telecommunications industry mergers and/or
transfers of control, and to enumerate the public interest factors
analyzed during such scrutiny. The bill declares that except where the
public interest requires a contrary result, a portion of the benefits
of such mergers should be returned to the state's rate payers directly
or by reinvestment in in-state infrastructure.

 SUMMARY OF SPECIFIC PROVISIONS :

This law would amend section 99 and section 100 of the public service
law.

 JUSTIFICATION :

The public interest requires that the Public Service Commission's
(Commission) analysis of mergers and conclusions drawn there from
arise from objective and verifiable empirical evidence, rather than
from unsupported statements of policy or conclusory observations.
Further, the public interest requires that the Commission's analysis
be enumerated for public scrutiny in a transparent manner.

As other states such as New Jersey and California have previously
legislated, it is additionally in the public interest to require a
portion of the benefits of telecommunications mergers to be returned
to the state's ratepayer's as refunds, reinvestment in the
infrastructure providing E-911 services or other services, or to
finance repairs, maintenance or new construction that might otherwise
be unfunded. As noted in the Assembly Committee on Corporations,
Authorities and Commission's Interim Report on Telephone Service
Quality, and in numerous service quality proceedings at the
Commission, additional investment in telecommunications company
physical plant is vital to better service, and public safety.

Consequently, this legislation requires the Public Service Commission
to conduct its analysis upon an enumerated list of public interest
factors, which increases the participation of the public and other
stakeholder groups in such proceedings and enhances the transparency
and accountability of the merger analysis process.

 PRIOR LEGISLATIVE HISTORY :

S.7263 (2007) - Energy and Telecommunications
A.10043 (2007) - Passed Assembly
S.6686 (2006) - Energy and Telecommunications
A.9809 (2006) - Rules

 FISCAL IMPACT :

None.

 EFFECTIVE DATE :
This act shall take effect on the 120th day after it shall have become
law, and any rule or regulation necessary for the timely
implementation of this act on its effective date shall be promulgated
within 90 days of such date.

2009-S5731 - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  5731

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 1, 2009
                               ___________

Introduced by Sen. AUBERTINE -- read twice and ordered printed, and when
  printed  to  be  committed to the Committee on Energy and Telecommuni-
  cations

AN ACT to amend the public service law, in  relation  to  directing  the
  public service commission to conduct an in-depth public interest anal-
  ysis  of proposed mergers by telephone corporations and other telecom-
  munications services providers over which said commission  has  juris-
  diction

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Legislative findings and purpose.   The  legislature  finds
the  public interest to require closer scrutiny of proposed telecommuni-
cations industry transfers of control, and declares that,  except  where
the  public  interest requires a contrary result, a portion of the bene-
fits of such mergers should be returned to the state's ratepayers.
  S 2. Subdivision 2 of section 99 of the public service law, as amended
by chapter 383 of the laws of 1996, is amended to read as follows:
  2. (A) No franchise nor any right to or under any franchise to own  or
operate  a  telegraph  line  or telephone line shall be assigned, trans-
ferred, or leased, nor shall any contract or  agreement  hereafter  made
with  reference  to or affecting any such franchise or right be valid or
of any force or effect whatsoever[,] unless  the  assignment,  transfer,
lease,  contract,  or  agreement shall have been approved by the commis-
sion.
  (B) No telephone corporation shall transfer  or  lease  its  works  or
system or any part of such works or system to any other person or corpo-
ration  or  contract for the operation of its works or system[,] without
the written consent of the commission.  [Notwithstanding the  foregoing,
any  such  transfer  or  lease  between  affiliated corporations with an
original cost of (a) less than one hundred thousand dollars proposed  by
a  telephone  corporation  having annual gross revenues in excess of two

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11989-02-9

S. 5731                             2

hundred million dollars, (b)  less  than  twenty-five  thousand  dollars
proposed by a telephone corporation having annual gross revenues of less
than  two  hundred million but more than ten million dollars or (c) less
than  ten  thousand  dollars  proposed by a telephone corporation having
annual gross revenues of less than ten million  dollars  and  any  other
transfer  or  lease  between  non-affiliates regardless of cost shall be
effective without the commission's written consent  within  ninety  days
after such corporation notifies the commission that it plans to complete
such  transfer  or  lease  and  submits a description of the transfer or
lease, unless the commission, or its designee,  determines  within  such
ninety  days  that  the public interest requires the commission's review
and written consent.]
  (C) (1) NO CONSENT SHALL BE GIVEN BY THE COMMISSION TO THE ASSIGNMENT,
TRANSFER, OR LEASE OF ANY RIGHT OR FRANCHISE TO OPERATE A TELEGRAPH LINE
OR TELEPHONE LINE UNLESS IT SHALL HAVE BEEN SHOWN THAT SUCH  ASSIGNMENT,
TRANSFER, OR LEASE IS IN THE PUBLIC INTEREST.
  (2)  NO  CONSENT  SHALL  BE GIVEN BY THE COMMISSION TO THE ASSIGNMENT,
TRANSFER, OR LEASE OF ANY RIGHT OR FRANCHISE TO OPERATE ANY  PART  OF  A
TELEPHONE CORPORATION'S WORKS OR SYSTEM, OR TO A CONTRACT FOR THE OPERA-
TION  OF  SUCH ENTITY'S WORKS OR SYSTEM, UNLESS IT SHALL HAVE BEEN SHOWN
THAT SUCH ASSIGNMENT, TRANSFER, OR LEASE OR CONTRACT IS  IN  THE  PUBLIC
INTEREST.
  (D)  BEFORE AUTHORIZING THE MERGER, ACQUISITION, ASSIGNMENT, LEASE, OR
TRANSFER OF CONTROL OF ANY TELEPHONE  CORPORATION  ORGANIZED  AND  DOING
BUSINESS  IN  THIS  STATE, WHERE ANY OF THE ENTITIES THAT ARE PARTIES TO
THE PROPOSED TRANSACTION HAS GROSS ANNUAL NEW  YORK  REVENUES  EXCEEDING
TWO HUNDRED MILLION DOLLARS, THE COMMISSION SHALL FIND THAT THE PROPOSAL
DOES ALL OF THE FOLLOWING:
  (1) PROVIDES SHORT-TERM AND LONG-TERM ECONOMIC BENEFITS TO RATEPAYERS.
  (2)  EQUITABLY ALLOCATES, WHERE THE COMMISSION HAS RATEMAKING AUTHORI-
TY, THE TOTAL SHORT-TERM AND LONG-TERM FORECASTED ECONOMIC BENEFITS,  AS
DETERMINED  BY  THE  COMMISSION, OF THE PROPOSED MERGER, ACQUISITION, OR
CONTROL BETWEEN SHAREHOLDERS AND RATEPAYERS.  RATEPAYERS  SHALL  RECEIVE
NOT  LESS  THAN  FORTY  PERCENT OF SUCH BENEFITS PROVIDED, HOWEVER, THAT
REINVESTMENT OF SUCH BENEFITS  IN  A  TELEPHONE  CORPORATION'S  IN-STATE
INFRASTRUCTURE MAY BE DEEMED TO SATISFY SUCH REQUIREMENT.
  (3)  MAINTAINS  OR  IMPROVES  THE FINANCIAL CONDITION OF THE RESULTING
TELEPHONE CORPORATIONS DOING BUSINESS IN THE STATE AND DOES  NOT  UNREA-
SONABLY  ALLOCATE A TELEPHONE CORPORATION'S DEBT TO A DIVESTITURE ENTITY
CREATED FROM AN EXISTING TELEPHONE CORPORATION. FOR THE PURPOSE OF  THIS
SECTION,  A  DIVESTITURE  ENTITY  IS  A  BUSINESS  ENTITY CREATED BY THE
ASSIGNMENT, EXCHANGE, SALE, OR OTHER TRANSFER  OF  SOME  OR  ALL  OF  AN
EXISTING  TELEPHONE CORPORATION'S LINES, SYSTEM, OR WORKS TO A NEW TELE-
PHONE CORPORATION.
  (4) MAINTAINS OR IMPROVES THE QUALITY OF SERVICE TO  TELEPHONE  CORPO-
RATION RATEPAYERS IN THE STATE.
  (5)  MAINTAINS  OR IMPROVES THE QUALITY OF MANAGEMENT OF THE RESULTING
TELEPHONE CORPORATION DOING BUSINESS IN THE STATE.
  (6) IS FAIR AND REASONABLE TO AFFECTED TELEPHONE  CORPORATION  EMPLOY-
EES, INCLUDING BOTH UNION AND NONUNION EMPLOYEES.
  (7)  IS  FAIR AND REASONABLE TO THE MAJORITY OF ALL AFFECTED TELEPHONE
CORPORATIONS.
  (8) IS BENEFICIAL ON AN OVERALL BASIS TO STATE AND LOCAL ECONOMIES AND
TO THE COMMUNITIES IN THE AREA SERVED BY THE RESULTING ENTITY  AND  DOES
NOT  ALLOCATE  SUBSTANTIALLY UNFUNDED PENSION OR HEALTH CARE OBLIGATIONS
OR OTHER EMPLOYEE BENEFITS TO A RESULTING TELEPHONE CORPORATION.

S. 5731                             3

  (9) PRESERVES THE JURISDICTION OF THE COMMISSION AND THE  CAPACITY  OF
THE  COMMISSION  TO EFFECTIVELY REGULATE AND AUDIT TELEPHONE CORPORATION
OPERATIONS IN THE STATE.
  (10)  PROVIDES  MITIGATION  MEASURES  TO  PREVENT  SIGNIFICANT ADVERSE
CONSEQUENCES WHICH MAY RESULT.
  (11) DOES NOT ADVERSELY AFFECT COMPETITION. IN  MAKING  THIS  FINDING,
THE  COMMISSION  SHALL  REQUEST  AN  ADVISORY  OPINION FROM THE ATTORNEY
GENERAL REGARDING WHETHER OR NOT COMPETITION WILL BE ADVERSELY  AFFECTED
AND  WHAT MITIGATORY MEASURES COULD BE ADOPTED TO AVOID ANY SUCH ADVERSE
EFFECT.
  (E) WHEN REVIEWING A  MERGER,  ACQUISITION,  OR  TRANSFER  OF  CONTROL
PROPOSAL,  THE  COMMISSION  SHALL  CONSIDER  REASONABLE  ALTERNATIVES OR
MODIFICATIONS TO THE PROPOSAL RECOMMENDED BY OTHER PARTIES, INCLUDING NO
MERGER, ACQUISITION, OR CONTROL, TO DETERMINE WHETHER OR NOT  COMPARABLE
SHORT-TERM  AND LONG-TERM ECONOMIC SAVINGS CAN BE ACHIEVED THROUGH OTHER
MEANS WHILE AVOIDING THE POSSIBLE ADVERSE CONSEQUENCES OF THE PROPOSAL.
  (F) THE PERSON OR CORPORATION SEEKING  ACQUISITION  OR  CONTROL  OF  A
TELEPHONE  CORPORATION  ORGANIZED AND DOING BUSINESS IN THIS STATE SHALL
HAVE BEFORE THE COMMISSION THE BURDEN OF PROVING BY A  PREPONDERANCE  OF
THE  EVIDENCE THAT THE REQUIREMENTS OF PARAGRAPH (D) OF THIS SUBDIVISION
ARE MET.
  (G) IN DETERMINING WHETHER OR NOT AN ACQUIRING  TELEPHONE  CORPORATION
HAS  GROSS  ANNUAL  REVENUES EXCEEDING THE AMOUNT SPECIFIED IN PARAGRAPH
(D) OF THIS SUBDIVISION, THE REVENUES OF  THAT  TELEPHONE  CORPORATION'S
AFFILIATES  SHALL  NOT  BE  CONSIDERED,  UNLESS  THE  AFFILIATE IS TO BE
UTILIZED FOR THE PURPOSE  OF  EFFECTING  SUCH  MERGER,  ACQUISITION,  OR
CONTROL.
  (H)  SUBPARAGRAPHS  ONE  AND  TWO OF PARAGRAPH (D) OF THIS SUBDIVISION
SHALL NOT APPLY TO THE FORMATION OF A HOLDING COMPANY.
  (I) SUBPARAGRAPHS ONE AND TWO OF PARAGRAPH  (D)  OF  THIS  SUBDIVISION
SHALL  NOT APPLY TO ACQUISITIONS OR CHANGES IN CONTROL THAT ARE MANDATED
BY EITHER THE COMMISSION OR THE LEGISLATURE.
  S 3. Section 100 of the public service law, as amended by chapter  446
of the laws of 1998, is amended to read as follows:
  S 100. Transfer and ownership of stock. 1. No telegraph corporation or
telephone  corporation,  domestic  or  foreign, shall hereafter purchase
[or], acquire, take, or hold any part of the capital stock of any  tele-
graph  corporation  or telephone corporation organized or existing under
the laws of this state unless authorized so to do by the commission.
  2. Save where stock shall be transferred or held for  the  purpose  of
collateral  security,  no  stock corporation, domestic or foreign, other
than a telegraph corporation or telephone  corporation,  shall,  without
the  consent  of  the  commission, purchase [or], acquire, take, or hold
more than ten [per centum] PERCENT of the voting capital stock issued by
any telegraph corporation or telephone corporation organized or existing
under or by virtue of the  laws  of  this  state.  Any  corporation  now
lawfully holding a majority of the voting capital stock of any telegraph
corporation  or  telephone  corporation  may, without the consent of the
commission, acquire and hold the remainder of the voting  capital  stock
of such telegraph corporation or telephone corporation[,] or any portion
thereof.
  3. (A)  No consent shall be given by the commission to the acquisition
of  any  stock in accordance with this section unless it shall have been
shown that such acquisition is  in  the  public  interest  [;  provided,
however, that any], WHICH THE COMMISSION SHALL DETERMINE BY FINDING THAT

S. 5731                             4

THE  PROPOSAL  DOES ALL OF THE FOLLOWING, TO THE EXTENT DETERMINED TO BE
APPLICABLE:
  (I) PROVIDES SHORT-TERM AND LONG-TERM ECONOMIC BENEFITS TO RATEPAYERS.
  (II)  EQUITABLY  ALLOCATES,  WHERE APPLICABLE AND WHERE THE COMMISSION
HAS RATEMAKING AUTHORITY, THE TOTAL SHORT-TERM AND LONG-TERM  FORECASTED
ECONOMIC  BENEFITS,  AS  DETERMINED  BY  THE COMMISSION, OF THE PROPOSED
ACQUISITION, PURCHASE, SALE, TRANSFER, OR RETENTION BETWEEN SHAREHOLDERS
AND RATEPAYERS. RATEPAYERS SHALL RECEIVE NOT LESS THAN FORTY PERCENT  OF
THOSE BENEFITS, PROVIDED, HOWEVER, THAT REINVESTMENT OF SUCH BENEFITS IN
A  TELEPHONE  CORPORATION'S  IN-STATE  INFRASTRUCTURE  MAY  BE DEEMED TO
SATISFY SUCH REQUIREMENT.
  (III) MAINTAINS OR IMPROVES THE FINANCIAL CONDITION OF  THE  RESULTING
TELEPHONE  CORPORATIONS  DOING BUSINESS IN THE STATE AND DOES NOT UNREA-
SONABLY ALLOCATE A TELEPHONE CORPORATION'S DEBT TO A DIVESTITURE  ENTITY
CREATED  FROM AN EXISTING TELEPHONE CORPORATION. FOR THE PURPOSE OF THIS
SECTION, A DIVESTITURE ENTITY  IS  A  BUSINESS  ENTITY  CREATED  BY  THE
ASSIGNMENT,  EXCHANGE,  SALE,  OR  OTHER  TRANSFER  OF SOME OR ALL OF AN
EXISTING TELEPHONE CORPORATION'S LINES, SYSTEM, OR WORKS TO A NEW  TELE-
PHONE CORPORATION.
  (IV)  MAINTAINS OR IMPROVES THE QUALITY OF SERVICE TO TELEPHONE CORPO-
RATION RATEPAYERS IN THE STATE.
  (V) MAINTAINS OR IMPROVES THE QUALITY OF MANAGEMENT OF  THE  RESULTING
TELEPHONE CORPORATION DOING BUSINESS IN THE STATE.
  (VI)  IS FAIR AND REASONABLE TO AFFECTED TELEPHONE CORPORATION EMPLOY-
EES, INCLUDING BOTH UNION AND NONUNION EMPLOYEES.
  (VII) IS FAIR AND REASONABLE TO THE MAJORITY OF ALL AFFECTED TELEPHONE
CORPORATIONS.
  (VIII) IS BENEFICIAL, ON AN OVERALL BASIS, TO STATE AND  LOCAL  ECONO-
MIES,  AND TO THE COMMUNITIES IN THE AREA SERVED BY THE RESULTING ENTITY
AND DOES NOT ALLOCATE SUBSTANTIALLY  UNFUNDED  PENSION  OR  HEALTH  CARE
OBLIGATIONS  OR  OTHER EMPLOYEE BENEFITS TO A RESULTING TELEPHONE CORPO-
RATION.
  (IX) PRESERVES THE JURISDICTION OF THE COMMISSION AND THE CAPACITY  OF
THE  COMMISSION  TO EFFECTIVELY REGULATE AND AUDIT TELEPHONE CORPORATION
OPERATIONS IN THE STATE.
  (X) PROVIDES MITIGATION MEASURES TO PREVENT SIGNIFICANT ADVERSE CONSE-
QUENCES WHICH MAY RESULT FROM SUCH ACQUISITION.
  (XI) DOES NOT ADVERSELY AFFECT COMPETITION. IN  MAKING  THIS  FINDING,
THE  COMMISSION  SHALL  REQUEST  AN  ADVISORY  OPINION FROM THE ATTORNEY
GENERAL REGARDING WHETHER OR NOT COMPETITION WILL BE ADVERSELY  AFFECTED
AND  WHAT MITIGATORY MEASURES COULD BE ADOPTED TO AVOID ANY SUCH ADVERSE
EFFECT.
  (B) ANY such consent, HOWEVER, shall be deemed to be  granted  by  the
commission  ninety days after such corporation applies to the commission
for its consent, unless the commission, or its designee, determines  and
informs  the applicant in writing within such ninety day period that the
public  interest  requires  the  commission's  review  and  its  written
consent.   Nothing [herein] IN THIS SECTION contained shall be construed
to prevent the holding of any stock heretofore lawfully acquired, nor to
prevent, upon the surrender or exchange of  such  stock  pursuant  to  a
reorganization  plan, the purchase, acquisition, taking, or holding of a
proportionate amount of stock of any new corporation organized  to  take
over,  at  foreclosure  or  other  sale, the property of any corporation
whose stock has been thus surrendered or exchanged[;], but  the  propor-
tion  of the voting capital stock of the new corporation held by a stock
corporation and acquired by it by any  such  surrender  or  exchange  of

S. 5731                             5

stock shall not without the consent of the commission exceed the propor-
tion  of  the voting capital stock held by it in the former corporation.
Every contract, assignment, transfer, or agreement for transfer  of  any
stock  by  or  through  any  person or corporation to any corporation in
violation of any provision of this chapter  shall  be  void  and  of  no
effect,  and no such transfer or assignment shall be made upon the books
of any such telegraph corporation or telephone corporation[,]  or  shall
be recognized as effective for any purpose.
  S 4. This act shall take effect on the one hundred twentieth day after
it  shall  have  become a law; provided that any and all rules and regu-
lations and any other measures necessary to implement any  provision  of
this act on its effective date may be promulgated and taken, respective-
ly, on or before the effective date of such provision.

co-Sponsors

2009-S5731A - Details

Current Committee:: Senate Energy And Telecommunications
Law Section:: Public Service Law
Laws Affected:: Amd §§99 & 100, Pub Serv L

2009-S5731A - Summary

2009-S5731A - Sponsor Memo

                                 BILL NUMBER:  S5731A

 TITLE OF BILL :

An act to amend the public service law, in relation to directing the
public service commission to conduct an in-depth public interest
analysis of proposed mergers by telephone corporations and other
telecommunications services providers over which said commission has
jurisdiction


 PURPOSE OR GENERAL IDEA OF BILL :

This bill would require the public service commission to conduct a
closer scrutiny of proposed telecommunications industry mergers and/or
transfers of control, and to enumerate the public interest factors
analyzed during such scrutiny. The bill declares that except where the
public interest requires a contrary result, a portion of the benefits
of such mergers should be returned to the state's rate payers directly
or by reinvestment in in-state infrastructure.

 SUMMARY OF SPECIFIC PROVISIONS :

This law would amend section 99 and section 100 of the public service
law.

 JUSTIFICATION :

The public interest requires that the Public Service Commission's
(Commission) analysis of mergers and conclusions drawn there from
arise from objective and verifiable empirical evidence, rather than
from unsupported statements of policy or conclusory observations.
Further, the public interest requires that the Commission's analysis
be enumerated for public scrutiny in a transparent manner.

As other states such as New Jersey and California have previously
legislated, it is additionally in the public interest to require a
portion of the benefits of telecommunications mergers to be returned
to the state's ratepayer's as refunds, reinvestment in the
infrastructure providing E-911 services or other services, or to
finance repairs, maintenance or new construction that might otherwise
be unfunded. As noted in the Assembly Committee on Corporations,
Authorities and Commission's Interim Report on Telephone Service
Quality, and in numerous service quality proceedings at the
Commission, additional investment in telecommunications company
physical plant is vital to better service, and public safety.

Consequently, this legislation requires the Public Service Commission
to conduct its analysis upon an enumerated list of public interest
factors, which increases the participation of the public and other
stakeholder groups in such proceedings and enhances the transparency
and accountability of the merger analysis process.

 PRIOR LEGISLATIVE HISTORY :

S.7263 (2007) - Energy and Telecommunications
A.10043 (2007) - Passed Assembly
S.6686 (2006) - Energy and Telecommunications
A.9809 (2006) - Rules

 FISCAL IMPACT :

None.

 EFFECTIVE DATE :
This act shall take effect on the 120th day after it shall have become
law, and any rule or regulation necessary for the timely
implementation of this act on its effective date shall be promulgated
within 90 days of such date.

2009-S5731A - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5731--A

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 1, 2009
                               ___________

Introduced  by  Sens. AUBERTINE, FOLEY, MONSERRATE, PARKER -- read twice
  and ordered printed, and when printed to be committed to the Committee
  on  Energy  and  Telecommunications  --  committee  discharged,   bill
  amended,  ordered reprinted as amended and recommitted to said commit-
  tee

AN ACT to amend the public service law, in  relation  to  directing  the
  public service commission to conduct an in-depth public interest anal-
  ysis  of proposed mergers by telephone corporations and other telecom-
  munications services providers over which said commission  has  juris-
  diction

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Legislative findings and purpose.   The  legislature  finds
the  public interest to require closer scrutiny of proposed telecommuni-
cations industry transfers of control, and declares that,  except  where
the  public  interest requires a contrary result, a portion of the bene-
fits of such mergers should be returned to the state's ratepayers.
  S 2. Subdivision 2 of section 99 of the public service law, as amended
by chapter 383 of the laws of 1996, is amended to read as follows:
  2. (A) No franchise nor any right to or under any franchise to own  or
operate  a  telegraph  line  or telephone line shall be assigned, trans-
ferred, or leased, nor shall any contract or  agreement  hereafter  made
with  reference  to or affecting any such franchise or right be valid or
of any force or effect whatsoever[,] unless  the  assignment,  transfer,
lease,  contract,  or  agreement shall have been approved by the commis-
sion.
  (B) No telephone corporation shall transfer  or  lease  its  works  or
system or any part of such works or system to any other person or corpo-
ration  or  contract for the operation of its works or system[,] without
the written consent of the commission.  [Notwithstanding the  foregoing,
any  such  transfer  or  lease  between  affiliated corporations with an

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11989-03-9

S. 5731--A                          2

original cost of (a) less than one hundred thousand dollars proposed  by
a  telephone  corporation  having annual gross revenues in excess of two
hundred million dollars, (b)  less  than  twenty-five  thousand  dollars
proposed by a telephone corporation having annual gross revenues of less
than  two  hundred million but more than ten million dollars or (c) less
than ten thousand dollars proposed by  a  telephone  corporation  having
annual  gross  revenues  of  less than ten million dollars and any other
transfer or lease between non-affiliates regardless  of  cost  shall  be
effective  without  the  commission's written consent within ninety days
after such corporation notifies the commission that it plans to complete
such transfer or lease and submits a  description  of  the  transfer  or
lease,  unless  the  commission, or its designee, determines within such
ninety days that the public interest requires  the  commission's  review
and written consent.]
  (C) (1) NO CONSENT SHALL BE GIVEN BY THE COMMISSION TO THE ASSIGNMENT,
TRANSFER, OR LEASE OF ANY RIGHT OR FRANCHISE TO OPERATE A TELEGRAPH LINE
OR  TELEPHONE LINE UNLESS IT SHALL HAVE BEEN SHOWN THAT SUCH ASSIGNMENT,
TRANSFER, OR LEASE IS IN THE PUBLIC INTEREST.
  (2) NO CONSENT SHALL BE GIVEN BY THE  COMMISSION  TO  THE  ASSIGNMENT,
TRANSFER,  OR  LEASE  OF ANY RIGHT OR FRANCHISE TO OPERATE ANY PART OF A
TELEPHONE CORPORATION'S WORKS OR SYSTEM, OR TO A CONTRACT FOR THE OPERA-
TION OF SUCH ENTITY'S WORKS OR SYSTEM, UNLESS IT SHALL HAVE  BEEN  SHOWN
THAT  SUCH  ASSIGNMENT,  TRANSFER, OR LEASE OR CONTRACT IS IN THE PUBLIC
INTEREST.
  (D) BEFORE AUTHORIZING THE MERGER, ACQUISITION, ASSIGNMENT, LEASE,  OR
TRANSFER  OF  CONTROL  OF  ANY TELEPHONE CORPORATION ORGANIZED AND DOING
BUSINESS IN THIS STATE, THE COMMISSION SHALL FIND THAT THE PROPOSAL DOES
ALL OF THE FOLLOWING:
  (1) PROVIDES SHORT-TERM AND LONG-TERM ECONOMIC BENEFITS TO RATEPAYERS.
  (2) EQUITABLY ALLOCATES, WHERE THE COMMISSION HAS RATEMAKING  AUTHORI-
TY,  THE TOTAL SHORT-TERM AND LONG-TERM FORECASTED ECONOMIC BENEFITS, AS
DETERMINED BY THE COMMISSION, OF THE PROPOSED  MERGER,  ACQUISITION,  OR
CONTROL  BETWEEN  SHAREHOLDERS  AND RATEPAYERS. RATEPAYERS SHALL RECEIVE
NOT LESS THAN FORTY PERCENT OF SUCH  BENEFITS;  PROVIDED,  HOWEVER  THAT
REINVESTMENT  OF  SUCH  BENEFITS  IN  A TELEPHONE CORPORATION'S IN-STATE
INFRASTRUCTURE MAY BE DEEMED TO SATISFY SUCH REQUIREMENT.
  (3) MAINTAINS OR IMPROVES THE FINANCIAL  CONDITION  OF  THE  RESULTING
TELEPHONE  CORPORATIONS  DOING BUSINESS IN THE STATE AND DOES NOT UNREA-
SONABLY ALLOCATE A TELEPHONE CORPORATION'S DEBT TO A DIVESTITURE  ENTITY
CREATED  FROM AN EXISTING TELEPHONE CORPORATION. FOR THE PURPOSE OF THIS
SECTION, A DIVESTITURE ENTITY  IS  A  BUSINESS  ENTITY  CREATED  BY  THE
ASSIGNMENT,  EXCHANGE,  SALE,  OR  OTHER  TRANSFER  OF SOME OR ALL OF AN
EXISTING TELEPHONE CORPORATION'S LINES, SYSTEM, OR WORKS TO A NEW  TELE-
PHONE CORPORATION.
  (4)  MAINTAINS  OR IMPROVES THE QUALITY OF SERVICE TO TELEPHONE CORPO-
RATION RATEPAYERS IN THE STATE.
  (5) MAINTAINS OR IMPROVES THE QUALITY OF MANAGEMENT OF  THE  RESULTING
TELEPHONE CORPORATION DOING BUSINESS IN THE STATE.
  (6)  IS  FAIR AND REASONABLE TO AFFECTED TELEPHONE CORPORATION EMPLOY-
EES, INCLUDING BOTH UNION AND NONUNION EMPLOYEES.
  (7) IS FAIR AND REASONABLE TO THE MAJORITY OF ALL  AFFECTED  TELEPHONE
CORPORATIONS.
  (8) IS BENEFICIAL ON AN OVERALL BASIS TO STATE AND LOCAL ECONOMIES AND
TO  THE  COMMUNITIES IN THE AREA SERVED BY THE RESULTING ENTITY AND DOES
NOT ALLOCATE SUBSTANTIALLY UNFUNDED PENSION OR HEALTH  CARE  OBLIGATIONS
OR OTHER EMPLOYEE BENEFITS TO A RESULTING TELEPHONE CORPORATION.

S. 5731--A                          3

  (9)  PRESERVES  THE JURISDICTION OF THE COMMISSION AND THE CAPACITY OF
THE COMMISSION TO EFFECTIVELY REGULATE AND AUDIT  TELEPHONE  CORPORATION
OPERATIONS IN THE STATE.
  (10)  PROVIDES  MITIGATION  MEASURES  TO  PREVENT  SIGNIFICANT ADVERSE
CONSEQUENCES WHICH MAY RESULT.
  (11) DOES NOT ADVERSELY AFFECT COMPETITION. IN  MAKING  THIS  FINDING,
THE  COMMISSION  SHALL  REQUEST  AN  ADVISORY  OPINION FROM THE ATTORNEY
GENERAL REGARDING WHETHER OR NOT COMPETITION WILL BE ADVERSELY  AFFECTED
AND  WHAT MITIGATORY MEASURES COULD BE ADOPTED TO AVOID ANY SUCH ADVERSE
EFFECT.
  (E) WHEN REVIEWING A  MERGER,  ACQUISITION,  OR  TRANSFER  OF  CONTROL
PROPOSAL,  THE  COMMISSION  SHALL  CONSIDER  REASONABLE  ALTERNATIVES OR
MODIFICATIONS TO THE PROPOSAL RECOMMENDED BY OTHER PARTIES, INCLUDING NO
MERGER, ACQUISITION, OR CONTROL, TO DETERMINE WHETHER OR NOT  COMPARABLE
SHORT-TERM  AND LONG-TERM ECONOMIC SAVINGS CAN BE ACHIEVED THROUGH OTHER
MEANS WHILE AVOIDING THE POSSIBLE ADVERSE CONSEQUENCES OF THE PROPOSAL.
  (F) THE PERSON OR CORPORATION SEEKING  ACQUISITION  OR  CONTROL  OF  A
TELEPHONE  CORPORATION  ORGANIZED AND DOING BUSINESS IN THIS STATE SHALL
HAVE BEFORE THE COMMISSION THE BURDEN OF PROVING BY A  PREPONDERANCE  OF
THE  EVIDENCE THAT THE REQUIREMENTS OF PARAGRAPH (D) OF THIS SUBDIVISION
ARE MET.
  (G) IN DETERMINING WHETHER OR NOT AN ACQUIRING  TELEPHONE  CORPORATION
HAS  GROSS  ANNUAL  REVENUES EXCEEDING THE AMOUNT SPECIFIED IN PARAGRAPH
(D) OF THIS SUBDIVISION, THE REVENUES OF  THAT  TELEPHONE  CORPORATION'S
AFFILIATES  SHALL  NOT  BE  CONSIDERED,  UNLESS  THE  AFFILIATE IS TO BE
UTILIZED FOR THE PURPOSE  OF  EFFECTING  SUCH  MERGER,  ACQUISITION,  OR
CONTROL.
  (H)  SUBPARAGRAPHS  ONE  AND  TWO OF PARAGRAPH (D) OF THIS SUBDIVISION
SHALL NOT APPLY TO THE FORMATION OF A HOLDING COMPANY.
  (I) SUBPARAGRAPHS ONE AND TWO OF PARAGRAPH  (D)  OF  THIS  SUBDIVISION
SHALL  NOT APPLY TO ACQUISITIONS OR CHANGES IN CONTROL THAT ARE MANDATED
BY EITHER THE COMMISSION OR THE LEGISLATURE.
  S 3. Section 100 of the public service law, as amended by chapter  226
of the laws of 2009, is amended to read as follows:
  S 100. Transfer and ownership of stock. 1. No telegraph corporation or
telephone  corporation,  domestic  or  foreign, shall hereafter purchase
[or], acquire, take, or hold any part of the capital stock of any  tele-
graph  corporation  or telephone corporation organized or existing under
the laws of this state unless authorized so to do by the commission.
  2. Save where stock shall be transferred or held for  the  purpose  of
collateral security, no stock corporation, domestic or foreign, company,
including, but not limited to, a limited liability company, association,
including  a  joint  stock association, partnership, including a limited
liability partnership, or person, other than a telegraph corporation  or
telephone  corporation,  shall,  without  the consent of the commission,
purchase [or], acquire, take, or hold more than ten [per centum] PERCENT
of the voting capital stock issued by any telegraph corporation or tele-
phone corporation organized or existing under or by virtue of  the  laws
of  this  state.  Any corporation now lawfully holding a majority of the
voting capital stock of any telegraph corporation  or  telephone  corpo-
ration  may, without the consent of the commission, acquire and hold the
remainder of the voting capital stock of such telegraph  corporation  or
telephone corporation[,] or any portion thereof.
  3.  (A) No consent shall be given by the commission to the acquisition
of any stock in accordance with this section unless it shall  have  been
shown that such acquisition is in the public interest[; provided, howev-

S. 5731--A                          4

er,  that any], WHICH THE COMMISSION SHALL DETERMINE BY FINDING THAT THE
PROPOSAL DOES ALL OF THE FOLLOWING,  TO  THE  EXTENT  DETERMINED  TO  BE
APPLICABLE:
  (I) PROVIDES SHORT-TERM AND LONG-TERM ECONOMIC BENEFITS TO RATEPAYERS.
  (II)  EQUITABLY  ALLOCATES,  WHERE APPLICABLE AND WHERE THE COMMISSION
HAS RATEMAKING AUTHORITY, THE TOTAL SHORT-TERM AND LONG-TERM  FORECASTED
ECONOMIC  BENEFITS,  AS  DETERMINED  BY  THE COMMISSION, OF THE PROPOSED
ACQUISITION, PURCHASE, SALE, TRANSFER, OR RETENTION BETWEEN SHAREHOLDERS
AND RATEPAYERS. RATEPAYERS SHALL RECEIVE NOT LESS THAN FORTY PERCENT  OF
THOSE BENEFITS.
  (III)  MAINTAINS  OR IMPROVES THE FINANCIAL CONDITION OF THE RESULTING
TELEPHONE CORPORATIONS DOING BUSINESS IN THE STATE AND DOES  NOT  UNREA-
SONABLY  ALLOCATE A TELEPHONE CORPORATION'S DEBT TO A DIVESTITURE ENTITY
CREATED FROM AN EXISTING TELEPHONE CORPORATION. FOR THE PURPOSE OF  THIS
SECTION,  A  DIVESTITURE  ENTITY  IS  A  BUSINESS  ENTITY CREATED BY THE
ASSIGNMENT, EXCHANGE, SALE, OR OTHER TRANSFER  OF  SOME  OR  ALL  OF  AN
EXISTING  TELEPHONE CORPORATION'S LINES, SYSTEM, OR WORKS TO A NEW TELE-
PHONE CORPORATION.
  (IV) MAINTAINS OR IMPROVES THE QUALITY OF SERVICE TO TELEPHONE  CORPO-
RATION RATEPAYERS IN THE STATE.
  (V)  MAINTAINS  OR IMPROVES THE QUALITY OF MANAGEMENT OF THE RESULTING
TELEPHONE CORPORATION DOING BUSINESS IN THE STATE.
  (VI) IS FAIR AND REASONABLE TO AFFECTED TELEPHONE CORPORATION  EMPLOY-
EES, INCLUDING BOTH UNION AND NONUNION EMPLOYEES.
  (VII) IS FAIR AND REASONABLE TO THE MAJORITY OF ALL AFFECTED TELEPHONE
CORPORATIONS.
  (VIII)  IS  BENEFICIAL, ON AN OVERALL BASIS, TO STATE AND LOCAL ECONO-
MIES, AND TO THE COMMUNITIES IN THE AREA SERVED BY THE RESULTING  ENTITY
AND  DOES  NOT  ALLOCATE  SUBSTANTIALLY  UNFUNDED PENSION OR HEALTH CARE
OBLIGATIONS OR OTHER EMPLOYEE BENEFITS TO A RESULTING  TELEPHONE  CORPO-
RATION.
  (IX)  PRESERVES THE JURISDICTION OF THE COMMISSION AND THE CAPACITY OF
THE COMMISSION TO EFFECTIVELY REGULATE AND AUDIT  TELEPHONE  CORPORATION
OPERATIONS IN THE STATE.
  (X) PROVIDES MITIGATION MEASURES TO PREVENT SIGNIFICANT ADVERSE CONSE-
QUENCES WHICH MAY RESULT FROM SUCH ACQUISITION.
  (XI)  DOES  NOT  ADVERSELY AFFECT COMPETITION. IN MAKING THIS FINDING,
THE COMMISSION SHALL REQUEST  AN  ADVISORY  OPINION  FROM  THE  ATTORNEY
GENERAL  REGARDING WHETHER OR NOT COMPETITION WILL BE ADVERSELY AFFECTED
AND WHAT MITIGATORY MEASURES COULD BE ADOPTED TO AVOID ANY SUCH  ADVERSE
EFFECT.
  (B)  ANY  such  consent  HOWEVER, shall be deemed to be granted by the
commission ninety days after such corporation applies to the  commission
for  its consent, unless the commission, or its designee, determines and
informs the applicant in writing within such ninety day period that  the
public  interest  requires  the  commission's  review  and  its  written
consent.  Nothing [herein] contained IN THIS SECTION shall be  construed
to prevent the holding of any stock heretofore lawfully acquired, nor to
prevent,  upon  the  surrender  or  exchange of such stock pursuant to a
reorganization plan, the purchase, acquisition, taking, or holding of  a
proportionate  amount  of stock of any new corporation organized to take
over, at foreclosure or other sale,  the  property  of  any  corporation
whose  stock  has been thus surrendered or exchanged[;], but the propor-
tion of the voting capital stock of the new corporation held by a  stock
corporation, company, association, partnership or person and acquired by
it  by  any  such  surrender  or exchange of stock shall not without the

S. 5731--A                          5

consent of the commission exceed the proportion of  the  voting  capital
stock held by it in the former corporation.
  4.  Every contract, assignment, transfer, or agreement for transfer of
any stock by or through any person or corporation  to  any  corporation,
company,  association,  partnership  or  person,  in  violation  of  any
provision of this chapter shall be void and of no effect,  and  no  such
transfer  or  assignment  shall be made upon the books of any such tele-
graph corporation or telephone corporation[,] or shall be recognized  as
effective for any purpose.
  S 4. This act shall take effect on the one hundred twentieth day after
it  shall  have become a law. Effective immediately, all rules and regu-
lations and any other measures necessary to implement any  provision  of
this act on its effective date may be promulgated and taken, respective-
ly, on or before the effective date of such provision.

co-Sponsors

2009-S5731B (ACTIVE) - Details

Current Committee:: Senate Energy And Telecommunications
Law Section:: Public Service Law
Laws Affected:: Amd §§99 & 100, Pub Serv L

2009-S5731B (ACTIVE) - Summary

2009-S5731B (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S5731B

 TITLE OF BILL :
An act to amend the public service law, in relation to directing the
public service commission to conduct an in-depth public interest
analysis of proposed mergers by telephone corporations and other
telecommunications services providers over which said commission has
jurisdiction


 PURPOSE OR GENERAL IDEA OF BILL :
This bill would require the public service commission to conduct a
closer scrutiny of proposed telecommunications industry mergers and/or
transfers of control, and to enumerate the public interest factors
analyzed during such scrutiny. The bill declares that except where the
public interest requires a contrary result, a portion of the benefits
of such mergers should be returned to the state's rate payers directly
or by reinvestment in in-state infrastructure.

 SUMMARY OF SPECIFIC PROVISIONS :
This law would amend section 99 and section 100 of the public service
law.

 JUSTIFICATION :
The public interest requires that the Public Service Commission's
(Commission) analysis of mergers and conclusions drawn there from

arise from objective and verifiable empirical evidence, rather than
from unsupported statements of policy or conclusory observations.
Further, the public interest requires that the Commission's analysis
be enumerated for public scrutiny in a transparent manner.

As other states such as New Jersey and California have previously
legislated, it is additionally in the public interest to require a
portion of the benefits of telecommunications mergers to be returned
to the state's ratepayer's as refunds, reinvestment in the
infrastructure providing E-911 services or other services, or to
finance repairs, maintenance or new construction that might otherwise
be unfunded. As noted in the Assembly Committee on Corporations,
Authorities and Commission's Interim Report on Telephone Service
Quality, and in numerous service quality proceedings at the
Commission, additional investment in telecommunications company
physical plant is vital to better service, and public safety.

Consequently, this legislation requires the Public Service Commission
to conduct its analysis upon an enumerated list of public interest
factors, which increases the participation of the public and other
stakeholder groups in such proceedings and enhances the transparency
and accountability of the merger analysis process.

 PRIOR LEGISLATIVE HISTORY :
S.7263 (2007)  - Energy and Telecommunications
A.10043 (2007) - Passed Assembly
S.6686 (2006)  - Energy and Telecommunications
A.9809 (2006)  - Rules

 FISCAL IMPACT :
None.

 EFFECTIVE DATE :
This act shall take effect on the 120th day after it shall have become
law, and any rule or regulation necessary for the timely
implementation of this act on its effective date shall be promulgated
within 90 days of such date.

2009-S5731B (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 5731--B

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                              June 1, 2009
                               ___________

Introduced  by  Sens.  AUBERTINE,  FOLEY, HANNON, PARKER, SAVINO -- read
  twice and ordered printed, and when printed to  be  committed  to  the
  Committee  on  Energy  and Telecommunications -- committee discharged,
  bill amended, ordered reprinted as amended  and  recommitted  to  said
  committee  --  recommitted to the Committee on Energy and Telecommuni-
  cations in  accordance  with  Senate  Rule  6,  sec.  8  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

AN  ACT  to  amend  the public service law, in relation to directing the
  public service commission to conduct an in-depth public interest anal-
  ysis of proposed mergers by telephone corporations and other  telecom-
  munications  services  providers over which said commission has juris-
  diction

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  Legislative  findings and purpose.  The legislature finds
the public interest to require closer scrutiny of proposed  telecommuni-
cations  industry  transfers of control, and declares that, except where
the public interest requires a contrary result, a portion of  the  bene-
fits of such mergers should be returned to the state's ratepayers.
  S 2. Subdivision 2 of section 99 of the public service law, as amended
by chapter 383 of the laws of 1996, is amended to read as follows:
  2.  (A) No franchise nor any right to or under any franchise to own or
operate a telegraph line or telephone line  shall  be  assigned,  trans-
ferred,  or  leased,  nor shall any contract or agreement hereafter made
with reference to or affecting any such franchise or right be  valid  or
of  any  force  or effect whatsoever[,] unless the assignment, transfer,
lease, contract, or agreement shall have been approved  by  the  commis-
sion.
  (B)  No  telephone  corporation  shall  transfer or lease its works or
system or any part of such works or system to any other person or corpo-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11989-05-0

S. 5731--B                          2

ration or contract for the operation of its works or  system[,]  without
the  written consent of the commission.  [Notwithstanding the foregoing,
any such transfer or  lease  between  affiliated  corporations  with  an
original  cost of (a) less than one hundred thousand dollars proposed by
a telephone corporation having annual gross revenues in  excess  of  two
hundred  million  dollars,  (b)  less  than twenty-five thousand dollars
proposed by a telephone corporation having annual gross revenues of less
than two hundred million but more than ten million dollars or  (c)  less
than  ten  thousand  dollars  proposed by a telephone corporation having
annual gross revenues of less than ten million  dollars  and  any  other
transfer  or  lease  between  non-affiliates regardless of cost shall be
effective without the commission's written consent  within  ninety  days
after such corporation notifies the commission that it plans to complete
such  transfer  or  lease  and  submits a description of the transfer or
lease, unless the commission, or its designee,  determines  within  such
ninety  days  that  the public interest requires the commission's review
and written consent.]
  (C) (1) NO CONSENT SHALL BE GIVEN BY THE COMMISSION TO THE ASSIGNMENT,
TRANSFER, OR LEASE OF ANY RIGHT OR FRANCHISE TO OPERATE A TELEGRAPH LINE
OR TELEPHONE LINE UNLESS IT SHALL HAVE BEEN SHOWN THAT SUCH  ASSIGNMENT,
TRANSFER, OR LEASE IS IN THE PUBLIC INTEREST.
  (2)  NO  CONSENT  SHALL  BE GIVEN BY THE COMMISSION TO THE ASSIGNMENT,
TRANSFER, OR LEASE OF ANY RIGHT OR FRANCHISE TO OPERATE ANY  PART  OF  A
TELEPHONE CORPORATION'S WORKS OR SYSTEM, OR TO A CONTRACT FOR THE OPERA-
TION  OF  SUCH ENTITY'S WORKS OR SYSTEM, UNLESS IT SHALL HAVE BEEN SHOWN
THAT SUCH ASSIGNMENT, TRANSFER, OR LEASE OR CONTRACT IS  IN  THE  PUBLIC
INTEREST.
  (D)  BEFORE AUTHORIZING THE MERGER, ACQUISITION, ASSIGNMENT, LEASE, OR
TRANSFER OF CONTROL OF ANY TELEPHONE  CORPORATION  ORGANIZED  AND  DOING
BUSINESS IN THIS STATE, THE COMMISSION SHALL FIND THAT THE PROPOSAL DOES
ALL OF THE FOLLOWING:
  (1) PROVIDES SHORT-TERM AND LONG-TERM ECONOMIC BENEFITS TO RATEPAYERS.
  (2)  EQUITABLY ALLOCATES, WHERE THE COMMISSION HAS RATEMAKING AUTHORI-
TY, THE TOTAL SHORT-TERM AND LONG-TERM FORECASTED ECONOMIC BENEFITS,  AS
DETERMINED  BY  THE  COMMISSION, OF THE PROPOSED MERGER, ACQUISITION, OR
CONTROL BETWEEN SHAREHOLDERS AND RATEPAYERS.  RATEPAYERS  SHALL  RECEIVE
NOT  LESS  THAN  FORTY  PERCENT OF SUCH BENEFITS; PROVIDED, HOWEVER THAT
REINVESTMENT OF SUCH BENEFITS  IN  A  TELEPHONE  CORPORATION'S  IN-STATE
INFRASTRUCTURE MAY BE DEEMED TO FULFILL SUCH REQUIREMENT.
  (3)  MAINTAINS  OR  IMPROVES  THE FINANCIAL CONDITION OF THE RESULTING
TELEPHONE CORPORATIONS DOING BUSINESS IN THE STATE AND DOES  NOT  UNREA-
SONABLY  ALLOCATE A TELEPHONE CORPORATION'S DEBT TO A DIVESTITURE ENTITY
CREATED FROM AN EXISTING TELEPHONE CORPORATION. FOR THE PURPOSE OF  THIS
SECTION,  A  DIVESTITURE  ENTITY  IS  A  BUSINESS  ENTITY CREATED BY THE
ASSIGNMENT, EXCHANGE, SALE, OR OTHER TRANSFER  OF  SOME  OR  ALL  OF  AN
EXISTING  TELEPHONE CORPORATION'S LINES, SYSTEM, OR WORKS TO A NEW TELE-
PHONE CORPORATION.
  (4) MAINTAINS OR IMPROVES THE QUALITY OF SERVICE TO  TELEPHONE  CORPO-
RATION RATEPAYERS IN THE STATE.
  (5)  MAINTAINS  OR IMPROVES THE QUALITY OF MANAGEMENT OF THE RESULTING
TELEPHONE CORPORATION DOING BUSINESS IN THE STATE.
  (6) IS FAIR AND REASONABLE TO AFFECTED TELEPHONE  CORPORATION  EMPLOY-
EES, INCLUDING BOTH UNION AND NONUNION EMPLOYEES.
  (7)  IS  FAIR AND REASONABLE TO THE MAJORITY OF ALL AFFECTED TELEPHONE
CORPORATIONS.

S. 5731--B                          3

  (8) IS BENEFICIAL ON AN OVERALL BASIS TO STATE AND LOCAL ECONOMIES AND
TO THE COMMUNITIES IN THE AREA SERVED BY THE RESULTING ENTITY  AND  DOES
NOT  ALLOCATE  SUBSTANTIALLY UNFUNDED PENSION OR HEALTH CARE OBLIGATIONS
OR OTHER EMPLOYEE BENEFITS TO A RESULTING TELEPHONE CORPORATION.
  (9)  PRESERVES  THE JURISDICTION OF THE COMMISSION AND THE CAPACITY OF
THE COMMISSION TO EFFECTIVELY REGULATE AND AUDIT  TELEPHONE  CORPORATION
OPERATIONS IN THE STATE.
  (10)  PROVIDES  MITIGATION  MEASURES  TO  PREVENT  SIGNIFICANT ADVERSE
CONSEQUENCES WHICH MAY RESULT.
  (11) DOES NOT ADVERSELY AFFECT COMPETITION. IN  MAKING  THIS  FINDING,
THE  COMMISSION  SHALL  REQUEST  AN  ADVISORY  OPINION FROM THE ATTORNEY
GENERAL REGARDING WHETHER OR NOT COMPETITION WILL BE ADVERSELY  AFFECTED
AND  WHAT MITIGATORY MEASURES COULD BE ADOPTED TO AVOID ANY SUCH ADVERSE
EFFECT.
  (E) WHEN REVIEWING A  MERGER,  ACQUISITION,  OR  TRANSFER  OF  CONTROL
PROPOSAL,  THE  COMMISSION  SHALL  CONSIDER  REASONABLE  ALTERNATIVES OR
MODIFICATIONS TO THE PROPOSAL RECOMMENDED BY OTHER PARTIES, INCLUDING NO
MERGER, ACQUISITION, OR CONTROL, TO DETERMINE WHETHER OR NOT  COMPARABLE
SHORT-TERM  AND LONG-TERM ECONOMIC SAVINGS CAN BE ACHIEVED THROUGH OTHER
MEANS WHILE AVOIDING THE POSSIBLE ADVERSE CONSEQUENCES OF THE PROPOSAL.
  (F) THE PERSON OR CORPORATION SEEKING  ACQUISITION  OR  CONTROL  OF  A
TELEPHONE  CORPORATION  ORGANIZED AND DOING BUSINESS IN THIS STATE SHALL
HAVE BEFORE THE COMMISSION THE BURDEN OF PROVING BY A  PREPONDERANCE  OF
THE  EVIDENCE THAT THE REQUIREMENTS OF PARAGRAPH (D) OF THIS SUBDIVISION
ARE MET.
  (G) IN DETERMINING WHETHER OR NOT AN ACQUIRING  TELEPHONE  CORPORATION
HAS  GROSS  ANNUAL  REVENUES EXCEEDING THE AMOUNT SPECIFIED IN PARAGRAPH
(D) OF THIS SUBDIVISION, THE REVENUES OF  THAT  TELEPHONE  CORPORATION'S
AFFILIATES  SHALL  NOT  BE  CONSIDERED,  UNLESS  THE  AFFILIATE IS TO BE
UTILIZED FOR THE PURPOSE  OF  EFFECTING  SUCH  MERGER,  ACQUISITION,  OR
CONTROL.
  (H)  SUBPARAGRAPHS  ONE  AND  TWO OF PARAGRAPH (D) OF THIS SUBDIVISION
SHALL NOT APPLY TO THE FORMATION OF A HOLDING COMPANY.
  (I) SUBPARAGRAPHS ONE AND TWO OF PARAGRAPH  (D)  OF  THIS  SUBDIVISION
SHALL  NOT APPLY TO ACQUISITIONS OR CHANGES IN CONTROL THAT ARE MANDATED
BY EITHER THE COMMISSION OR THE LEGISLATURE.
  S 3. Section 100 of the public service law, as amended by chapter  226
of the laws of 2009, is amended to read as follows:
  S 100. Transfer and ownership of stock. 1. No telegraph corporation or
telephone  corporation,  domestic  or  foreign, shall hereafter purchase
[or], acquire, take, or hold any part of the capital stock of any  tele-
graph  corporation  or telephone corporation organized or existing under
the laws of this state unless authorized so to do by the commission.
  2. Save where stock shall be transferred or held for  the  purpose  of
collateral security, no stock corporation, domestic or foreign, company,
including, but not limited to, a limited liability company, association,
including  a  joint  stock association, partnership, including a limited
liability partnership, or person, other than a telegraph corporation  or
telephone  corporation,  shall,  without  the consent of the commission,
purchase [or], acquire, take, or hold more than ten [per centum] PERCENT
of the voting capital stock issued by any telegraph corporation or tele-
phone corporation organized or existing under or by virtue of  the  laws
of  this  state.  Any corporation now lawfully holding a majority of the
voting capital stock of any telegraph corporation  or  telephone  corpo-
ration  may, without the consent of the commission, acquire and hold the

S. 5731--B                          4

remainder of the voting capital stock of such telegraph  corporation  or
telephone corporation[,] or any portion thereof.
  3.  (A) No consent shall be given by the commission to the acquisition
of any stock in accordance with this section unless it shall  have  been
shown that such acquisition is in the public interest[; provided, howev-
er,  that any], WHICH THE COMMISSION SHALL DETERMINE BY FINDING THAT THE
PROPOSAL DOES ALL OF THE FOLLOWING,  TO  THE  EXTENT  DETERMINED  TO  BE
APPLICABLE:
  (I) PROVIDES SHORT-TERM AND LONG-TERM ECONOMIC BENEFITS TO RATEPAYERS.
  (II)  EQUITABLY  ALLOCATES,  WHERE APPLICABLE AND WHERE THE COMMISSION
HAS RATEMAKING AUTHORITY, THE TOTAL SHORT-TERM AND LONG-TERM  FORECASTED
ECONOMIC  BENEFITS,  AS  DETERMINED  BY  THE COMMISSION, OF THE PROPOSED
ACQUISITION, PURCHASE, SALE, TRANSFER, OR RETENTION BETWEEN SHAREHOLDERS
AND RATEPAYERS. RATEPAYERS SHALL RECEIVE NOT LESS THAN FORTY PERCENT  OF
THOSE BENEFITS.
  (III)  MAINTAINS  OR IMPROVES THE FINANCIAL CONDITION OF THE RESULTING
TELEPHONE CORPORATIONS DOING BUSINESS IN THE STATE AND DOES  NOT  UNREA-
SONABLY  ALLOCATE A TELEPHONE CORPORATION'S DEBT TO A DIVESTITURE ENTITY
CREATED FROM AN EXISTING TELEPHONE CORPORATION. FOR THE PURPOSE OF  THIS
SECTION,  A  DIVESTITURE  ENTITY  IS  A  BUSINESS  ENTITY CREATED BY THE
ASSIGNMENT, EXCHANGE, SALE, OR OTHER TRANSFER  OF  SOME  OR  ALL  OF  AN
EXISTING  TELEPHONE CORPORATION'S LINES, SYSTEM, OR WORKS TO A NEW TELE-
PHONE CORPORATION.
  (IV) MAINTAINS OR IMPROVES THE QUALITY OF SERVICE TO TELEPHONE  CORPO-
RATION RATEPAYERS IN THE STATE.
  (V)  MAINTAINS  OR IMPROVES THE QUALITY OF MANAGEMENT OF THE RESULTING
TELEPHONE CORPORATION DOING BUSINESS IN THE STATE.
  (VI) IS FAIR AND REASONABLE TO AFFECTED TELEPHONE CORPORATION  EMPLOY-
EES, INCLUDING BOTH UNION AND NONUNION EMPLOYEES.
  (VII) IS FAIR AND REASONABLE TO THE MAJORITY OF ALL AFFECTED TELEPHONE
CORPORATIONS.
  (VIII)  IS  BENEFICIAL, ON AN OVERALL BASIS, TO STATE AND LOCAL ECONO-
MIES, AND TO THE COMMUNITIES IN THE AREA SERVED BY THE RESULTING  ENTITY
AND  DOES  NOT  ALLOCATE  SUBSTANTIALLY  UNFUNDED PENSION OR HEALTH CARE
OBLIGATIONS OR OTHER EMPLOYEE BENEFITS TO A RESULTING  TELEPHONE  CORPO-
RATION.
  (IX)  PRESERVES THE JURISDICTION OF THE COMMISSION AND THE CAPACITY OF
THE COMMISSION TO EFFECTIVELY REGULATE AND AUDIT  TELEPHONE  CORPORATION
OPERATIONS IN THE STATE.
  (X) PROVIDES MITIGATION MEASURES TO PREVENT SIGNIFICANT ADVERSE CONSE-
QUENCES WHICH MAY RESULT FROM SUCH ACQUISITION.
  (XI)  DOES  NOT  ADVERSELY AFFECT COMPETITION. IN MAKING THIS FINDING,
THE COMMISSION SHALL REQUEST  AN  ADVISORY  OPINION  FROM  THE  ATTORNEY
GENERAL  REGARDING WHETHER OR NOT COMPETITION WILL BE ADVERSELY AFFECTED
AND WHAT MITIGATORY MEASURES COULD BE ADOPTED TO AVOID ANY SUCH  ADVERSE
EFFECT.
  (B)  ANY  such  consent  HOWEVER, shall be deemed to be granted by the
commission ninety days after such corporation applies to the  commission
for  its consent, unless the commission, or its designee, determines and
informs the applicant in writing within such ninety day period that  the
public  interest  requires  the  commission's  review  and  its  written
consent.  Nothing [herein] contained IN THIS SECTION shall be  construed
to prevent the holding of any stock heretofore lawfully acquired, nor to
prevent,  upon  the  surrender  or  exchange of such stock pursuant to a
reorganization plan, the purchase, acquisition, taking, or holding of  a
proportionate  amount  of stock of any new corporation organized to take

S. 5731--B                          5

over, at foreclosure or other sale,  the  property  of  any  corporation
whose  stock  has been thus surrendered or exchanged[;], but the propor-
tion of the voting capital stock of the new corporation held by a  stock
corporation, company, association, partnership or person and acquired by
it  by  any  such  surrender  or exchange of stock shall not without the
consent of the commission exceed the proportion of  the  voting  capital
stock held by it in the former corporation.
  4.  Every contract, assignment, transfer, or agreement for transfer of
any stock by or through any person or corporation  to  any  corporation,
company,  association,  partnership  or  person,  in  violation  of  any
provision of this chapter shall be void and of no effect,  and  no  such
transfer  or  assignment  shall be made upon the books of any such tele-
graph corporation or telephone corporation[,] or shall be recognized  as
effective for any purpose.
  S 4. This act shall take effect on the one hundred twentieth day after
it  shall  have become a law. Effective immediately, all rules and regu-
lations and any other measures necessary to implement any  provision  of
this act on its effective date may be promulgated and taken, respective-
ly, on or before the effective date of such provision.

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Sponsored By

Archive: Last Bill Status - In Senate Committee Energy And Telecommunications Committee

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2009-S5731 - Details

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