S T A T E O F N E W Y O R K
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3185
2013-2014 Regular Sessions
I N A S S E M B L Y
January 24, 2013
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Introduced by M. of A. BRENNAN -- read once and referred to the Commit-
tee on Corporations, Authorities and Commissions
AN ACT to amend the public service law, in relation to universal tele-
communications services
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The public service law is amended by adding a new section
90-a to read as follows:
S 90-A. STATEMENT OF POLICY. 1. THE STATE OF NEW YORK'S LONG-STANDING
POLICY, CODIFIED IN THIS SECTION, IS THAT CERTAIN COMMUNICATIONS TOOLS,
AND PARTICULARLY TELEPHONE SERVICES, I.E. ESSENTIAL SERVICES, ARE SO
FUNDAMENTAL THAT IT IS NOT IN THE PUBLIC INTEREST TO LEAVE THEIR
PROVISION TO THE VAGARIES OF THE MARKETPLACE ALONE. FURTHERMORE, THE
LEGISLATURE DECLARES THAT IT IS IN THE PUBLIC INTEREST THAT SUCH ESSEN-
TIAL SERVICES BE MADE AND MAINTAINED UNIVERSALLY ACROSS NEW YORK. SUCH
TOOLS AND SERVICES HAVE, OVER TIME, AND INCREASINGLY NOW, SHAPED CITI-
ZENS' ABILITY TO PARTICIPATE IN CIVIC AFFAIRS, TO ACQUIRE LEARNING
SKILLS NEEDED FOR THEIR ECONOMIC SUCCESS AND THAT OF THE STATE, AND TO
ENJOY THE RICH AND UNPARALLELED SOCIAL AND CULTURAL LIFE THAT IS A VITAL
PART OF NEW YORK STATE'S ECONOMY. THE STATE'S GOALS FOR UNIVERSAL
SERVICE ARE TO FURTHER AND PROTECT THE PUBLIC INTEREST BY PROMOTING THE
AVAILABILITY OF QUALITY SERVICES AT JUST, REASONABLE, AND AFFORDABLE
RATES; TO ADVANCE THE AVAILABILITY OF SUCH SERVICES TO ALL CONSUMERS,
INCLUDING THOSE IN LOW INCOME, RURAL, INSULAR, AND HIGH COST AREAS AT
RATES THAT ARE REASONABLY COMPARABLE TO THOSE CHARGED IN HIGH-DENSITY
URBAN AREAS; AND TO INCREASE ACCESS TO, AND THE UBIQUITY OF, ADVANCED
TELECOMMUNICATIONS SERVICES AVAILABLE TO THE PUBLIC IN AN EQUITABLE AND
NONDISCRIMINATORY MANNER. ALL TELECOMMUNICATIONS PROVIDERS UTILIZING
TELEPHONE NUMBERS, AND ALL RESELLERS OF TELECOMMUNICATIONS SERVICES
UTILIZING TELEPHONE NUMBERS SHOULD CONTRIBUTE TO CORE PUBLIC SAFETY AND
PUBLIC INTEREST GOALS TO THE EXTENT ALLOWABLE BY LAW. AT A MINIMUM,
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD07404-01-3
A. 3185 2
THESE INCLUDE EQUIVALENT UNIVERSAL SERVICE SUPPORT, PROVISION AND
SUPPORT FOR E911, DISABILITY ACCESS, CONSUMER PROTECTIONS, AND EQUITABLE
TAXATION. EFFECTIVE PUBLIC PROGRAMS MUST BE MADE AVAILABLE WHERE COMPET-
ITIVE FORCES DO NOT RESULT IN THE DEPLOYMENT, MAINTENANCE, OR RECON-
STRUCTION OF AFFORDABLE, HIGH-QUALITY, AND RELIABLE ADVANCE TELECOMMUNI-
CATIONS CAPABILITY ACROSS ALL GEOGRAPHIC REGIONS AND DEMOGRAPHIC
SEGMENTS OF THE STATE. TELECOMMUNICATIONS NETWORKS MUST BE INTER-OPERA-
BLE, BASED ON OPEN STANDARDS, RELIABLE, SURVIVABLE, DIVERSELY PATHED, AS
WIDELY INTERCONNECTED AS IS REASONABLE, ACCESSIBLE FOR ALL USERS AS
PROVIDED FOR BY LAW, INCLUDING BUT NOT LIMITED TO THE AMERICANS WITH
DISABILITIES ACT, AND ALL APPLICABLE FEDERAL, STATE, AND LOCAL REGU-
LATIONS, AND MUST MEET BASIC REQUIREMENTS CONCERNING PUBLIC SAFETY,
CONSUMER PROTECTION, AND RELEVANT SOCIAL AND MORAL OBLIGATIONS.
2. FOR THE PURPOSES OF THIS SECTION:
(A) THE TERM "UNIVERSAL SERVICE" MEANS THAT CERTAIN BASIC TELEPHONE
FACILITIES, SERVICES, AND INSTRUMENTALITIES, KNOWN AS "ESSENTIAL
SERVICES", SHALL BE ACCESSIBLE TO ANY PERSON, CORPORATION, OR LOCALITY
IN NEW YORK STATE AT COSTS REASONABLY COMPARABLE TO RATES CHARGED IN
URBAN AREAS AND LOW-COST AREAS, SO THAT THERE SHALL NOT BE ANY UNDUE OR
UNREASONABLE PREFERENCE OR ADVANTAGE TO ANY PERSON, CORPORATION, OR
LOCALITY.
(B) THE TERM "ESSENTIAL SERVICES" MEANS THE PROVISION BY TELECOMMUNI-
CATIONS PROVIDERS UTILIZING TELEPHONE NUMBERS OF VOICE GRADE ACCESS TO
AND ACROSS ANALOG, DIGITAL, OR WIRELESS NETWORKS, AS PERTAINS TO THE
CARRIER, WITH THE ABILITY TO PLACE AND RECEIVE CALLS; TOUCH-TONE
SERVICE; SINGLE-PARTY SERVICE; ACCESS TO EMERGENCY SERVICES, INCLUDING
911 AND E911 (WHICH IDENTIFIES A CALLER'S LOCATION); ACCESS TO OPERATOR
SERVICES; ACCESS TO INTER-EXCHANGE SERVICES; ACCESS TO DIRECTORY ASSIST-
ANCE; ACCESS TO "LIFELINE" SERVICES, OR OTHER SERVICES EQUIVALENT IN
PRICE AND QUALITY FOR QUALIFYING LOW-INCOME CONSUMERS; AND ACCESS TO ALL
OF SUCH OTHER SERVICES AS MAY BE MANDATED BY FEDERAL, STATE, AND LOCAL
LAW.
3. WITHIN THIRTY DAYS OF THE DATE ON WHICH THE COMMISSION HAD ACTUAL
KNOWLEDGE, OR SHOULD REASONABLY HAVE KNOWN OR BEEN INFORMED, OF THE
OCCURRENCE, OR APPEARANCE OF THE PROXIMATE OCCURRENCE, OF A PURCHASE,
ACQUISITION, TAKING, OR OTHER TRANSFER OF CONTROL OR OWNERSHIP OF THE
CAPITAL STOCK OF A TELECOMMUNICATIONS PROVIDER UTILIZING TELEPHONE
NUMBERS ORGANIZED OR EXISTING UNDER THE LAWS OF THIS STATE WITHIN THE
CONTEMPLATION OF SECTION ONE HUNDRED OF THIS ARTICLE OR PARAGRAPH (B) OF
THIS SUBDIVISION, THE COMMISSION SHALL COMPILE AND PUBLISH A REPORT ON
THE EFFECT, IF ANY, OF SUCH TRANSFER OF CONTROL UPON UNIVERSAL SERVICE
IN THE STATE. SUCH REPORT SHALL BE KNOWN AS THE "UNIVERSAL SERVICE
IMPACT ANALYSIS", AND SHALL BE ISSUED BEFORE THE COMMISSION MAY VOTE
UPON THE APPROVAL OF SUCH OCCURRENCE. IF, ON THE EFFECTIVE DATE OF THIS
SUBDIVISION, THERE IS A PROCEEDING BEFORE THE COMMISSION WITHIN THE
CONTEMPLATION OF SUBDIVISION ONE OF THIS SECTION, THEN THE COMMISSION
SHALL HAVE THIRTY DAYS FROM SUCH EFFECTIVE DATE TO ISSUE ITS UNIVERSAL
SERVICE IMPACT ANALYSIS REPORT. SUCH UNIVERSAL SERVICE IMPACT ANALYSIS
REPORT SHALL INCLUDE, BUT NOT BE LIMITED TO:
(A) AN ANALYSIS OF THE EFFECTS UPON PRICING OF TELECOMMUNICATIONS
SERVICES IN HIGH-COST AND RURAL AND LOW-INCOME AREAS AFFECTED BY SUCH
TRANSFER OF CONTROL;
(B) AN ANALYSIS OF THE ACTUAL OR POTENTIAL EFFECTS OF SUCH TRANSFER OF
CONTROL UPON NETWORK RELIABILITY AND SERVICE QUALITY IN THE AREA
AFFECTED BY SUCH TRANSFER OF CONTROL;
A. 3185 3
(C) AN ANALYSIS OF THE ACTUAL OR POTENTIAL EFFECTS UPON NEW SERVICE
PROVISION IN RURAL AND HIGH-COST AND LOW-INCOME AREAS WITHIN THE AREA
AFFECTED BY SUCH TRANSFER OF CONTROL.
FOR THE PURPOSES OF TRIGGERING SUCH REPORTING REQUIREMENT BY THE
COMMISSION, THERE SHALL BE A REBUTTABLE PRESUMPTION OF A TRANSFER OF
CONTROL OR OWNERSHIP UPON THE ACQUISITION OR ACCUMULATION BY ANY PERSON
OR GROUP OF PERSONS OF TEN PERCENT OR MORE OF THE SHARES OF, OR OF
COMPARABLE OWNERSHIP INTEREST IN, A TELECOMMUNICATIONS CORPORATION. SUCH
TRANSFER OF CONTROL OR ACQUISITION OR ACCUMULATION OF OWNERSHIP INTER-
ESTS SHALL ALSO BE DEEMED TO OCCUR UPON THE SALE, ASSIGNMENT, TRANSFER,
DIVESTITURE OF A PORTION OF A BUSINESS ENTITY, LEASE OR OTHER DISPOSAL,
EITHER IN WHOLE OR PART, EITHER BY INVOLUNTARY SALE OR BY VOLUNTARY
SALE, MERGER, OR CONSOLIDATION, OR BANKRUPTCY, OF ANY TITLE TO SUCH
TELECOMMUNICATIONS CORPORATION, EITHER LEGAL OR EQUITABLE, OR OF THE
LINES OR OTHER NETWORK ELEMENTS OF SUCH TELECOMMUNICATIONS CORPORATION
WITHIN THREE OR MORE LOCAL ACCESS AND TRANSPORT AREAS (LATAS) OR COUN-
TIES.
4. UPON THE COMPLETION OF THE REPORT UNDER SUBDIVISION THREE OF THIS
SECTION THE COMMISSION SHALL HAVE POWER AND THE DUTY TO ESTABLISH BY
RULE OR REGULATION, WITHIN NINETY DAYS OF THE EFFECTIVE DATE OF THIS
SECTION, SUCH CHARGES, EXCHANGES OF FUNDS, FEES, METHODOLOGIES, AND
MODALITIES AS ARE NECESSARY AND CONVENIENT TO PROMOTE AND ENSURE THE
STATEWIDE UNIVERSAL AVAILABILITY OF HIGH-QUALITY ESSENTIAL SERVICES AT
JUST, REASONABLE, AND AFFORDABLE RATES; TO ADVANCE THE AVAILABILITY OF
SUCH SERVICES TO ALL CONSUMERS, INCLUDING THOSE IN LOW INCOME, RURAL,
INSULAR, AND HIGH COST AREAS AT RATES THAT ARE REASONABLY COMPARABLE TO
THOSE CHARGED IN LOW COST AND URBAN AREAS; AND TO INCREASE ACCESS TO,
AND THE UBIQUITY OF, ADVANCED TELECOMMUNICATIONS SERVICES AVAILABLE TO
THE PUBLIC IN AN EQUITABLE AND NONDISCRIMINATORY MANNER. THE COMMISSION
SHALL HAVE POWER AND THE DUTY TO PROMULGATE SUCH RULES OR REGULATIONS AS
ARE NECESSARY AND CONVENIENT TO EFFECTUATE THE STATE POLICIES SET FORTH
IN THIS SECTION.
S 2. The public service law is amended by adding a new section 92-g
to read as follows:
S 92-G. UNIVERSAL, AFFORDABLE AND SECURE TELECOMMUNICATIONS SERVICES
FUND. 1. THE COMMISSION SHALL ESTABLISH A MECHANISM FOR THE SUPPORT OF
UNIVERSAL SERVICE, ALSO REFERRED TO IN THIS SECTION AS THE "HIGH COST
SUPPORT MECHANISM", WHICH SHALL OPERATE IN ACCORDANCE WITH RULES ADOPTED
BY THE COMMISSION. THE PURPOSE OF THE HIGH COST SUPPORT MECHANISM IS TO
PROVIDE FINANCIAL ASSISTANCE TO TELECOMMUNICATIONS SERVICES PROVIDERS
UTILIZING TELEPHONE NUMBERS TO HELP MAKE BASIC LOCAL ANALOG, DIGITAL,
AND WIRELESS SERVICES UNIVERSALLY AVAILABLE, AT JUST AND REASONABLE
RATES AND ALLOW SUCH PROVIDERS TO BE FULLY REIMBURSED FOR THE DIFFERENCE
BETWEEN THE REASONABLE COSTS INCURRED IN MAKING BASIC SERVICE AVAILABLE
TO THEIR CUSTOMERS WITHIN A RURAL, HIGH COST GEOGRAPHIC SUPPORT AREA AND
THE PRICE CHARGED FOR SUCH SERVICE, AFTER TAKING INTO ACCOUNT ANY
AMOUNTS RECEIVED BY SUCH PROVIDERS UNDER PRICE SUPPORT MECHANISMS ESTAB-
LISHED BY THE FEDERAL GOVERNMENT AND BY THIS STATE. THE COMMISSION SHALL
ENSURE THAT NO TELECOMMUNICATIONS SERVICES PROVIDER IS RECEIVING FUNDS
FROM THIS OR ANY OTHER SOURCE THAT, TOGETHER WITH LOCAL SERVICE REVEN-
UES, EXCEEDS THE COST OF PROVIDING LOCAL SERVICE TO CUSTOMERS OF SUCH
PROVIDER. THE HIGH COST SUPPORT MECHANISM SHALL BE SUPPORTED AND
DISTRIBUTED EQUITABLY AND ON A NONDISCRIMINATORY, COMPETITIVELY NEUTRAL
BASIS THROUGH A RATE ELEMENT ASSESSED ON ALL TELECOMMUNICATIONS SERVICE
PROVIDERS IN NEW YORK. A PROVIDER THAT OFFERS BASIC LOCAL ANALOG,
DIGITAL, AND WIRELESS SERVICE THROUGHOUT AN ENTIRE SUPPORT AREA THROUGH
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USE OF ITS OWN FACILITIES OR ON A RESALE BASIS MAY BE QUALIFIED AS A
PROVIDER OF LAST RESORT OR MAY BE ELIGIBLE TO RECEIVE UNIVERSAL SERVICE
SUPPORT, AS DETERMINED BY THE COMMISSION. A PROVIDER THAT FAILS TO PAY
AN ASSESSMENT DUE AND PAYABLE UNDER THIS SECTION SHALL BE SUBJECT TO THE
REVOCATION OF CERTIFICATE AFTER NOTICE AND THE OPPORTUNITY FOR A HEARING
AS PROVIDED IN THIS CHAPTER. IN ALL RELEVANT GEOGRAPHIC AREAS OF THE
STATE, AS DEFINED BY THE COMMISSION, THE COMMISSION SHALL DESIGNATE AT
LEAST ONE PROVIDER AS THE PROVIDER OF LAST RESORT AND ADOPT PROCEDURES
FOR CHANGING OR TERMINATING SUCH DESIGNATIONS. A PROVIDER OF LAST RESORT
DESIGNATION CARRIES THE RESPONSIBILITY TO OFFER BASIC LOCAL ANALOG,
DIGITAL, OR WIRELESS SERVICE TO ALL CONSUMERS WHO REQUEST IT. A PERSON
HOLDING A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY TO PROVIDE
BASIC SERVICE SHALL BE SUBJECT TO THE EVOLVING DEFINITION OF BASIC
SERVICE DEVELOPED BY THE COMMISSION UNDER THIS CHAPTER AND THE SYSTEM OF
FINANCIAL SUPPORT FOR UNIVERSAL SERVICE ESTABLISHED BY THE COMMISSION
UNDER THIS SECTION. IF AND WHEN ADDITIONAL ELEMENTS ARE INCLUDED IN THE
DEFINITION OF BASIC SERVICE AS A RESULT OF REVIEW BY THE COMMISSION,
PRICES MAY INCREASE AS IS DETERMINED BY THE COMMISSION TO BE REASONABLY
NECESSARY TO COVER THE COST AND ACCOUNT FOR THE INCLUSION OF SUCH ADDI-
TIONAL ELEMENTS.
2. ON OR BEFORE DECEMBER FIRST OF EACH YEAR, THE COMMISSION SHALL
SUBMIT A WRITTEN REPORT TO THE GOVERNOR, TEMPORARY PRESIDENT OF THE
SENATE, SPEAKER OF THE ASSEMBLY, MINORITY LEADERS OF THE SENATE AND
ASSEMBLY, CHAIRPERSON AND RANKING MINORITY MEMBER OF THE SENATE ENERGY
AND TELECOMMUNICATIONS COMMITTEE, AND THE CHAIRPERSON AND RANKING MINOR-
ITY MEMBER OF THE ASSEMBLY CORPORATIONS, AUTHORITIES AND COMMISSIONS
COMMITTEE, ACCOUNTING FOR THE OPERATION OF THE HIGH COST SUPPORT MECH-
ANISM DURING THE PRECEDING CALENDAR YEAR AND CONTAINING THE FOLLOWING
INFORMATION, AT A MINIMUM:
(A) THE TOTAL AMOUNT OF MONEY THAT THE COMMISSION DETERMINED SHOULD
CONSTITUTE THE HIGH COST SUPPORT MECHANISM FROM WHICH DISTRIBUTIONS
WOULD BE MADE;
(B) THE TOTAL AMOUNT OF MONEY ORDERED TO BE CONTRIBUTED THROUGH A RATE
ELEMENT ASSESSMENT COLLECTED BY EACH TELECOMMUNICATIONS SERVICE PROVID-
ER;
(C) THE BASIS ON WHICH THE CONTRIBUTION OF EACH TELECOMMUNICATIONS
SERVICE PROVIDER WAS CALCULATED;
(D) THE BENCHMARKS USED AND THE BASIS ON WHICH THE BENCHMARKS WERE
DETERMINED;
(E) THE TOTAL AMOUNT OF MONEY THAT THE COMMISSION DETERMINED SHOULD BE
DISTRIBUTED FROM THE HIGH COST SUPPORT MECHANISM;
(F) THE TOTAL AMOUNT OF MONEY DISTRIBUTED TO EACH TELECOMMUNICATIONS
SERVICE PROVIDER FROM THE HIGH COST SUPPORT MECHANISM;
(G) THE BASIS ON WHICH THE DISTRIBUTION TO TELECOMMUNICATIONS SERVICE
PROVIDERS WAS CALCULATED;
(H) AS TO EACH TELECOMMUNICATIONS SERVICE PROVIDER RECEIVING A
DISTRIBUTION, THE AMOUNT RECEIVED BY GEOGRAPHIC SUPPORT AREA AND TYPE OF
CUSTOMER, THE WAY IN WHICH THE BENEFIT OF THE DISTRIBUTION WAS APPLIED
OR ACCOUNTED FOR;
(I) THE PROPOSED BENCHMARKS, THE PROPOSED CONTRIBUTIONS TO BE
COLLECTED THROUGH A RATE ELEMENT ASSESSMENT BY EACH TELECOMMUNICATIONS
SERVICE PROVIDER, AND THE PROPOSED TOTAL AMOUNT OF THE HIGH COST SUPPORT
MECHANISM FROM WHICH DISTRIBUTIONS ARE TO BE MADE FOR THE FOLLOWING
CALENDAR YEAR; AND
(J) THE TOTAL AMOUNT OF DISTRIBUTIONS MADE FROM THE HIGH COST FUND,
DIRECTLY OR INDIRECTLY, AND HOW THEY ARE BALANCED BY RATE REDUCTIONS BY
A. 3185 5
ALL PROVIDERS FOR THE SAME PERIOD AND A FULL ACCOUNTING OF AND JUSTI-
FICATION FOR ANY DIFFERENCE. IF THE REPORT SUBMITTED PURSUANT TO THIS
SUBDIVISION CONTAINS A PROPOSAL FOR AN INCREASE IN ANY OF THE AMOUNTS
LISTED IN PARAGRAPH (B) OF THIS SUBDIVISION, SUCH INCREASE SHALL BE
SUSPENDED UNTIL MARCH THIRTY-FIRST OF THE FOLLOWING YEAR.
SUCH REPORT MUST ALSO DETERMINE WHAT AMOUNT OF UNEXPENDED FUNDS, IF
ANY, AT THE END OF EACH FISCAL YEAR, COULD BE REFUNDED TO THE CONTRIBUT-
ING TELECOMMUNICATIONS SERVICES PROVIDERS ON A BASIS THAT IS PROPOR-
TIONAL TO THE AMOUNTS CONTRIBUTED BY SUCH TELECOMMUNICATIONS SERVICES
PROVIDERS.
3. THERE IS HEREBY CREATED, IN THE STATE TREASURY, THE NEW YORK HIGH
COST ADMINISTRATION FUND, REFERRED TO IN THIS SECTION AS THE "FUND",
WHICH SHALL BE USED TO REIMBURSE THE COMMISSION AND, IF APPLICABLE, ITS
CONTRACTORS, FOR REASONABLE EXPENSES INCURRED IN THE ADMINISTRATION OF
THE HIGH COST SUPPORT MECHANISM AS DETERMINED BY RULES OF THE COMMIS-
SION, AND SHALL BE AUDITED IN A MANNER AND FREQUENCY TO BE DETERMINED BY
THE COMPTROLLER. THE MONEYS IN THE FUND THAT ARE TO BE USED FOR THE
DIRECT AND INDIRECT ADMINISTRATIVE COSTS INCURRED BY THE COMMISSION AND
ITS CONTRACTORS SHALL BE APPROPRIATED ANNUALLY BY THE LEGISLATURE. AT
THE END OF ANY FISCAL YEAR, ALL UNEXPENDED AND UNENCUMBERED MONEYS IN
THE FUND SHALL REMAIN THEREIN AND SHALL NOT BE CREDITED OR TRANSFERRED
TO THE GENERAL FUND OR ANY OTHER FUND. BASED UPON THE BALANCE REMAINING
IN THE FUND AND THE AMOUNT APPROPRIATED ANNUALLY BY THE LEGISLATURE FOR
USE BY THE COMMISSION, EACH YEAR THE COMMISSION SHALL DETERMINE THE
NONDISCRIMINATORY, COMPETITIVELY NEUTRAL ASSESSMENT ON ALL TELECOMMUNI-
CATIONS SERVICE PROVIDERS IN NEW YORK THAT WILL BE NECESSARY TO COVER
THE COST OF IMPLEMENTING THE HIGH COST SUPPORT MECHANISM. ONLY THE
MONEYS FROM SUCH ASSESSMENT SHALL BE TRANSMITTED TO THE STATE TREASURER,
WHO SHALL CREDIT THE SAME TO THE FUND. ALL INTEREST DERIVED FROM THE
DEPOSIT AND INVESTMENT OF THIS FUND SHALL REMAIN IN THE FUND AND SHALL
NOT REVERT TO THE GENERAL FUND.
S 3. This act shall take effect immediately.