Senate Bill S7263C

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

                                  7263

                            I N  S E N A T E

                             March 26, 2010
                               ___________

Introduced  by  Sen.  FOLEY  -- 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
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

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

                                                           LBD11989-04-0

S. 7263                             2

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.
  (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.

S. 7263                             3

  (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-
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.

S. 7263                             4

  (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
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,

S. 7263                             5

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.

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

                                 7263--A
    Cal. No. 1021

                            I N  S E N A T E

                             March 26, 2010
                               ___________

Introduced  by  Sens.  FOLEY,  ADAMS, ADDABBO, AUBERTINE, BRESLIN, DIAZ,
  DILAN, HUNTLEY, C. JOHNSON, MONTGOMERY, ONORATO, OPPENHEIMER,  PARKER,
  PERALTA,  SCHNEIDERMAN,  SQUADRON, STACHOWSKI, STAVISKY, STEWART-COUS-
  INS, THOMPSON, VALESKY -- read twice and  ordered  printed,  and  when
  printed  to  be  committed to the Committee on Energy and Telecommuni-
  cations -- committee discharged and said bill committed to the Commit-
  tee on Rules -- ordered  to  a  third  reading,  amended  and  ordered
  reprinted, retaining its place in the order of third reading

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.
                                                           LBD11989-07-0

S. 7263--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. 7263--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.
  (J) NOTHING IN THIS SUBDIVISION SHALL APPLY TO A TELEPHONE CORPORATION
HAVING FEWER THAN SEVENTY-FIVE EMPLOYEES OR WITH  ANNUAL  REVENUE  UNDER
TEN MILLION DOLLARS.
  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.

S. 7263--A                          4

  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
over,  at  foreclosure  or  other  sale, the property of any corporation
whose stock has been thus surrendered or exchanged[;], but  the  propor-

S. 7263--A                          5

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.
  (C) NOTHING IN THIS SUBDIVISION SHALL APPLY TO A TELEPHONE CORPORATION
HAVING FEWER THAN SEVENTY-FIVE EMPLOYEES OR WITH  ANNUAL  REVENUE  UNDER
TEN MILLION DOLLARS.
  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.

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

                                 7263--B
    Cal. No. 1021

                            I N  S E N A T E

                             March 26, 2010
                               ___________

Introduced  by  Sens.  FOLEY,  ADAMS, ADDABBO, AUBERTINE, BRESLIN, DIAZ,
  DILAN, HUNTLEY, C. JOHNSON, MONTGOMERY, ONORATO, OPPENHEIMER,  PARKER,
  PERALTA,  SCHNEIDERMAN,  SQUADRON, STACHOWSKI, STAVISKY, STEWART-COUS-
  INS, THOMPSON, VALESKY -- read twice and  ordered  printed,  and  when
  printed  to  be  committed to the Committee on Energy and Telecommuni-
  cations -- committee discharged and said bill committed to the Commit-
  tee on Rules -- ordered  to  a  third  reading,  amended  and  ordered
  reprinted,  retaining its place in the order of third reading -- again
  amended and ordered reprinted, retaining its place  in  the  order  of
  third reading

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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                      [ ] is old law to be omitted.
                                                           LBD11989-12-0

S. 7263--B                          2

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, AND ONLY 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.

S. 7263--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.
  (J) THIS SUBDIVISION SHALL ONLY APPLY  TO  ASSIGNMENTS,  TRANSFERS  OR
LEASES  OF WORKS OR SYSTEMS OR OTHER TELECOMMUNICATIONS SERVICES PROVID-
ERS IF THE PROPOSED MERGER, ACQUISITION, ASSIGNMENT, LEASE, OR  TRANSFER
INVOLVES AT LEAST ONE RESIDENTIAL CUSTOMER.
  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

S. 7263--B                          4

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-
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; 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

S. 7263--B                          5

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
consent  of  the  commission exceed the proportion of the voting capital
stock held by it in the former corporation.
  (C) THIS  SUBDIVISION  SHALL  ONLY  APPLY  TO  MERGERS,  ACQUISITIONS,
ASSIGNMENTS,  LEASES,  OR TRANSFERS OF CONTROL OF TELEPHONE CORPORATIONS
OR OTHER TELECOMMUNICATIONS SERVICES PROVIDERS IF THE  PROPOSED  MERGER,
ACQUISITION,  ASSIGNMENT, LEASE, OR TRANSFER INVOLVES AT LEAST ONE RESI-
DENTIAL CUSTOMER.
  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.
  5. THE PROVISIONS OF THIS SECTION SHALL ONLY APPLY  TO  THE  OWNERSHIP
TRANSFER  OF STOCKS WHERE ANY PARTY TO SUCH TRANSFER HAS ANNUAL NEW YORK
GROSS REVENUES EXCEEDING TWO HUNDRED MILLION DOLLARS.
  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.