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State Telecommunications

Laws Passed - 1997

Information Policy and Technology Series

by
Robert D. Boerner
Legislative Information Services

16-Page Document

Introduction

Cable Television
Implementing the Telecommunications Act of 1996
Universal Service
Taxation
911 Emergency Services
New Services
Slamming and Theft of Cellular Telephone Services
Miscellaneous Regulations

Conclusion
TABLE: Laws Passed - 1997

Introduction

Passage of the Telecommunications Act of 1996 marked a historic change in the regulation of the cable television and telecommunications industries. The states enacted a variety of legislation on telecommunications, including cable television, in 1997. State legislation to implement the federal act, impose new taxes, and establish emergency services are just a few of the issues states have addressed in 1997. Other topics include limiting telephone solicitation, and regulating fraud and siting cellular telephone towers.

This report does not attempt to summarize all cable television and telecommunications legislation passed in 1997. The issues addressed in the report include implementation of the Telecommunications Act of 1996, universal service, tax measures ranging from franchise to property to Internet taxes, emergency and new services, slamming, theft of cellular services and miscellaneous matters.

Cable Television

Enacted state legislation on cable television is varied, from granting authorization to a municipality to the purchasing of cable television systems to stronger penalties for the theft of cable television services.

Arkansas HB 1229

Classifies as a Class D felony the selling or distribution of any plans or equipment designed to decode cable television signals.

Idaho HB 349

Provides an exemption from the sales and use tax for the sale and purchase of television, radio, and newspaper measurement services.

Oregon HB 2002

Requires a VHF signal to be encoded.

Virginia HB 2636

Relates to the location of easements in subdivisions for use by cable television operators.

Virginia HB 2888

Authorizes the governing body to grant a license, franchise or certificate to no more than one cable television system and to impose a fee. The governing body may grant additional licenses, franchises or certificates as it feels is necessary for the public welfare. Fees imposed for rights of way privileges shall not exceed those fees in effect as of Feb. 1, 1997.

Implementing the Telecommunications Act of 1996

At least four states have enacted legislation to implement the Telecommunications Act of 1996. These measures are extensive, covering interconnection agreements and competition, and in most cases include a universal service provision. Nebraska has passed a separate bill regarding their universal service fund.

Idaho HB 313

Gives the Public Utilities Commission authority to implement the Telecommunications Act of 1996. Removes barriers to entry by new competitors, removes pricing regulations for new entrants into the local exchange markets, effecting substantial and meaningful competition among local service providers. Gives the commission power to oversee the effects of competition on the public and suspend competitive measures if necessary. Suspends the interconnection requirements for rural carriers facing competition for three to five years and establishes unbundled network element charges and cost allocation procedures. Finally, authorizes the commission to investigate and report to the governor on subsidies in the industry.

Minnesota SB 739

Lists state goals as supporting universal service; maintaining reasonable rates; encouraging infrastructure development for high speed services and greater capacity for video, voice and data communications; and encouraging competition for local exchange services. A universal service fund is established and all telecommunications providers, including local, independent, cooperative and municipal telephone companies and cellular, personal, radio and telecommunications carriers are required to contribute to the fund. Universal service is defined as single-party service, touch tone and facsimile capability, emergency access and statewide relay service for the hearing impaired. Also provides for discounts in telecommunications services for schools and libraries and discusses alternative regulatory plans.

Montana SB 89

Gives the Public Service Commission rule-making authority to implement the Telecommunications Act of 1996. Specifically, gives the commission authority over negotiation, mediation and hearings on interconnection agreements. Establishes a new universal service fund with contributions from all telecommunications providers in the state that complements the federal fund. Defines universal service as voice grade access to public network and some dual tone-touch tone signals, single-party service, access to 911, an operator inter-exchange service and directory assistance. Addresses universal service related to schools and libraries.

Nebraska LB 660

Delegates specific authority to the Nebraska Public Service Commission to negotiate and arbitrate interconnection agreements to establish local exchange competition. Releases local exchange companies from PSC basic local exchange rate regulation upon a determination by the commission that such a local exchange company is subject to local exchange competition. Also, makes certain telecommunications providers otherwise exempt from Public Service Commission regulation, such as cable television providers, radio paging and wireless telecommunications providers, subject to the jurisdiction of the commission for purposes of the Nebraska Universal Service Fund.

Universal Service

In addition to the bills implementing the Telecommunications Act of 1996, which include universal service measures, several other states have passed separate measures that establish state universal service funds and define universal service.

Nebraska LB 686

Authorizes the Public Service Commission to establish a Universal Service Fund to ensure universal access is available statewide. Principles of the act include affordable rates, access to advanced services in all regions, access by rural and low-income areas and compensation to telecommunications companies that provide services to schools and libraries. The commission will oversee the fund, which will be administered by the commission or an appointed third party. A Lifeline Service Program is also to be established by the commission for low-income users.

Oklahoma HB 1815

Establishes the Corporation Commission's responsibility for approving telecommunications company increases or decreases in the telecommunications service rate. Prohibits any increase in basic local exchange service rates until Feb. 5, 2002. Establishes the Oklahoma Universal Service fund to promote the availability of primary services and authorizes the commission to expand the services covered under the fund. Also establishes the Oklahoma Lifeline fund to subsidize basic local exchange services for low-income people. Creates the Oklahoma E911 Emergency Service Fund. Also establishes the Oklahoma Telecommunications Technology Training Fund to provide teacher training in the most effective use of telecommunications and distance learning.

Utah HB 71

Establishes a Universal Public Telecommunications Service Support Fund to maintain the availability of intrastate service at reasonable rates. The fund will be supported by a statewide surcharge to providers and users of intrastate services within certain limitations. To receive money from the fund, a telecommunications company must first be certified by the commission. Universal service is defined as basic telephone services, or local exchange service and any other services the commission deems eligible for funds.

Washington SSB 6046

Authorizes the Utilities and Transportation Commission to study the creation of a universal service fund to serve the sparsely populated and hard to serve areas of the state. The commission shall make recommendations on the definition of universal services, potential carriers and cost methodologies.

Taxation

A variety of tax measures have been passed by the states. Three states, Florida, Georgia and Washington have passed legislation exempting Internet services from taxes. Other enacted bills relate to wireless, property and franchise taxes.

Arizona SB 1266

Clarifies the state transaction and privilege taxes on wireless telecommunications services.

Connecticut SB 1262

Establishes a formula for calculating the personal property tax for property used for telecommunications services.

Florida HB 313

Requires counties and municipalities to pay applicable taxes if they provide telecommunications services to the public. Also provides that if a county or municipality or other entity of local government becomes a telecommunications company, then it must separately account for the operations of the company as a separate entity and must be subject to all local requirements applicable to telecommunications companies.

Florida HB 1275

Revises provisions relating to the taxes that may be assessed by local governments for telecommunications services provided within their jurisdictions; exempts certain religious institutions from the payment of local telecommunications taxes. Also addresses administrative issues under the Municipal Public Services Tax. Establishes an administrative framework so that consumers, municipalities and those who collect the tax know the procedures. Provides rights and remedies for the seller that collects the tax concerning payment of the assessments or determinations of the tax.

Florida SB 404

Specifies that Internet and electronic mail access services and electronic board services and similar on-line computer services are not telecommunications services for tax purposes and, therefore, are not subject to the state and local taxes imposed on telecommunications services.

Georgia HR 366

Proclaims that Internet access should be exempt from government imposed fees, assessments or taxes imposed by the government.

Illinois HB 709

Amends the Telecommunications Excise Tax Act to allow for electronic payments.

Maryland HB 512

Modifies the definition of operating personal property for property tax purposes to include cables, lines, poles, and towers used to provide telecommunications services.

Maryland SB 746

Excludes Internet access service and long distance telecommunications service from the definition of "gross receipts" for purposes of the public service franchise tax. A two-percent franchise tax is to be included in the rates and will appear separately on the subscriber's bill. Also provides for a credit against the state income tax for the property tax paid by the telecommunications companies.

New Hampshire HB 51

Establishes a tax rate of 5.5 percent on the gross charge for retail telecommunications services.

New Jersey AB 2825

Levies a corporation business tax on telecommunications utilities.

North Dakota HB 1068

Relates to assessment of property and gross receipts of telecommunications services for tax purposes.

Utah HB 98

Authorizes a municipality to charge a public utility that supplies telephone services with a tax, license, or fee based on the utility's gross revenues from the sales and use of the telephone services.

Utah SB 184

Exempts service from the sales and use tax amounts paid for the purchase of telephone service for purposes of providing telephone.

Virginia 2188

Permits a municipality to impose a tax on the purchase by a consumer of local telecommunications service so long as it does not exceed 20 percent of the monthly gross charge.

Washington SSB 5763

Declares the Internet industry should not be burdened by new taxes and prohibits taxes on Internet services until July 1, 1999.

Wisconsin AB 100

Imposes a sales tax on services that record telecommunications messages and transmits them to a payer.

Wisconsin AB 100

Imposes a sales tax on telecommunications services terminating in and billed to an address in Wisconsin.

Wisconsin AB 100

Allows those paying a sales tax to Wisconsin on telecommunications services to reduce that tax by the amount paid to another state or the amount due Wisconsin, whichever is less.

911 Emergency Services

Many of the enacted measures related to emergency services involve a tax or charge to pay for the services. Other enacted bills concern wireless telecommunications.

Arizona SB 1441

Levies an excise tax of 1.5 percent on the gross proceeds of sales or income of service providers to finance emergency telecommunications services.

Arkansas HB 1641

Levies an emergency telephone service charge of up to five percent of the tariff rate and 12 percent for political subdivisions whose population is 27,500 or less. These funds are to be used for building and maintaining a 911 telephone system and public safety communications centers.

Arkansas HB 1990

Creates the Commercial Mobile Radio Service Board and levies an emergency phone service charge of 50 cents per month for commercial mobile radio service connections. Such services include two-way wireless, radio-telephone, personal communications services, and network radio access lines.

Colorado SB 132

Imposes an emergency telephone service charge. The funds are to be used to pay for emergency phone service, the costs of equipment and installation and for equipment necessary to provide automatic location identification and automatic number identification for wireless communications.

Hawaii SB 1814

Provides that public utilities with local exchange telecommunications services may recover through a surcharge the capital costs and operating expenses of a 911 service in a public telephone network.

Louisiana HB 238

Authorizes the governing body in the Allen Communications District to levy an emergency telephone service charge of $1 or less per month for each wired or wireless residential line and $2 for each wired or wireless business line.

Louisiana HB 356

Authorizes the governing body in the Calcasieu Parish Communications District to levy an emergency telephone service charge of $1 or less per month for each wired or wireless residential line and $2 for each wired or wireless business line.

Louisiana HB 659

Authorizes the governing body in the Acadia Parish Communications District to levy an emergency telephone service charge of $1 or less per month for each wired or wireless residential line and $2 for each wired or wireless business line.

Louisiana SB 1223

Authorizes the governing body in the Ouachita Parish Communications District to levy an emergency telephone service charge of $1 per month on cellular telephone service users.

Louisiana SB 1302

Authorizes the governing bodies of parish communications districts with a population of between 30,500 and 31,000 to levy an emergency telephone service charge of $1 or less per month for each wired or wireless residential line and $2 for each wired or wireless business line to provide for communications enhancements.

Louisiana SB 1466

Requires that listed and unlisted telephone numbers be provided to public agencies that provide emergency alert services.

Maine HP 712

Defines the enhanced 911 emergency system.

Maine HP 1172

Establishes funding for the 911 emergency telecommunications system.

Missouri HB 95 / SB 133

Classifies misuse of the emergency telephone service as a Class B misdemeanor. Misuse is defined as three or more calls in one month, or reporting a false emergency.

Missouri HB 249

Allows Christian County to elect the emergency telephone system board members from each township.

Missouri HB 816

Permits any county to establish an Emergency Telephone Service 911 Board to implement the 911 system. Also provides for an Advisory Committee for 911 Service Oversight to make policy and recommendations on 911 services.

Nebraska LB 37

Imposes a uniform service charge of 50 cents per month on each local access line terminating in the 911 service area to be used for the purchase, installation, maintenance and operation of the 911 service.

Nevada AB 173

Authorizes the Board of County Commissioners to impose an emergency surcharge on access lines for local exchange and on mobile telephone services.

New York SB 683

Provides for an exemption of public safety agencies from the enhanced emergency telephone system surcharge.

North Carolina HB 852

Provides for the confidentiality of information in the 911 data base.

Ohio Amended Substitute SB 5

Establishes a program of training and continuing education for emergency service telecommunicators. Extends for two years, until Dec. 31, 1999, the statutory authority for the "lifeline" telephone service program for qualifying low-income residential customers, and the tax credit to which telephone companies are entitled for providing the service.

Rhode Island HB 6178

Imposes a fine for failure to relinquish or obstruction of a phone line when needed to place an emergency call.

Tennessee HJR 52

Authorizes a study of a surcharge on wireless communications for emergency telephone services.

Texas HB 1324

Provides for the confidentiality of information in the 911 data base and makes the 911 service provider responsible for the billing of 911 fees.

Texas HB 1668

Authorizes the Public Utilities Commission to monitor emergency service fees and provide documentation on those fees.

Texas HB 2129

Establishes an emergency service fee for wireless telecommunications connections in order to obtain the phone number and location of each wireless call to 911. This fee will be 50 cents a month for each connection, to be collected and paid by the wireless service provider.

West Virginia SB 278

Levies a surcharge on wireless communications for 911 emergency services.

New Services

Enacted legislation establishing new services primarily relates to services for the hearing and speech impaired and to communications systems for schools.

Arkansas SB 607

Creates the Arkansas Deaf and Hearing Impaired Telecommunications Service Corporation to provide telecommunications relay services for the deaf, blind, hearing and speech impaired.

Colorado HB 1024

Amends the definition of private telecommunications networks to include college telecommunications services for students, faculty and staff.

Connecticut HB 5503

Authorizes the Department of Public Utility Control to determine basic telecommunications services, establish a lifeline program and determine who is eligible for such services, and determine whether a state Universal Service Fund is needed.

Maryland SB 100

Clarifies eligibility for the telephone lifeline service as those receiving public assistance or supplemental security income.

Minnesota HB 211

Allows telephone customers within combined school districts to petition the Public Utilities Commission to install extended area service.

Minnesota SB 740

Commissions a working group to review state telephone assistance programs and make recommendations that will bring the state into conformity with the universal service order in the Telecommunications Act of 1996. Provides for the development and implementation of pilot programs for voice messaging services for those without phone service.

Montana HB 207

Adds a licensed audiologist to the committee on Montana telecommunications access services for the disabled and authorizes the committee to establish and administer a program for specialized telecommunications equipment for the disabled.

Nebraska LB 568

Provides for a statewide relay system and voucher program, based on income and equipment price, for specialized telecommunications equipment that will enable low-income and hearing and speech impaired residents to communicate with conventional telephone systems.

New Mexico HB 32

Defines the Commission for Deaf and Hearing Impaired Persons.

South Dakota SB 232

Establishes a statewide program for the deaf, hearing and speech impaired to purchase and distribute telecommunications devices.

Texas SB 667

Authorizes the Texas Commission for Deaf and Hard of Hearing to establish a program of financial aid for the hearing and speech impaired to purchase equipment for telephone access.

Wisconsin AB 100

Establishes an educational telecommunications access program for public and private schools that provides either high-speed transfer lines or two-way interactive video links for a monthly charge. Costs in excess of the monthly charge are paid by the universal service fund.

Wisconsin AB 100

Requires the Department of Public Instruction to enter into a two-year contract with the National Federation of the Blind to provide the Newsline electronic information service.

Slamming and Theft of Cellular Telephone Services

Many states are addressing the growing problem of slamming (changing a subscriber's long-distance carrier without permission) by making it a misdemeanor. States are regulating the theft and cloning of cellular telephones through fines and criminal penalties.

Slamming

Alabama SB 133

Prohibits the unauthorized switching of a subscriber's telecommunications service provider. Authorization by the subscriber can be written, electronic or oral and the penalty for unauthorized switching shall be a credit or refund to the subscriber for charges due to the unauthorized switch.

Minnesota HB 1123

Defines slamming and loading as acts of consumer fraud subject to penalties. Loading is defined as charging a subscriber for a telecommunications service that is not required and was not requested. Slamming is defined as a change in a local or inter-exchange service provider without the verified consent of the subscriber.

Montana HB 431

Classifies slamming as a misdemeanor. Places liability for the customer's related charges on the carrier who made the unauthorized switch.

Texas SB 253

Provides penalties for the unauthorized switching of a subscriber's telecommunications service provider.

Cellular Telephone Theft

Arkansas SB 711

Makes theft of a wireless service or the facilitation of theft a Class A misdemeanor if the services obtained are $500 or less. Makes it a Class C felony if the services obtained are more than $500 but less than $2500. Makes it a Class B felony if the value of the services is over $2500 or if it is a second offense.

Colorado HB 1060

Classifies the making, possession or use of illegal telecommunications equipment a Class 3 misdemeanor. Cloning a cellular telephone or using cloning equipment to intercept signals is classified as a Class 4 felony.

Idaho HB 136

Makes it a felony to clone cellular telephones, sell cloned cellular telephones, sell or give instructions or equipment to clone cellular telephones or to use a cloned cellular telephone.

Louisiana HB 303

Provides for fines and imprisonment for knowingly possessing or selling a cloned cellular telephone or possessing cloning equipment.

New Mexico HB 345

Classifies obtaining telecommunications services or possession of any device intended to obtain telecommunications services through fraudulent means as a misdemeanor punishable by fine or imprisonment.

Rhode Island SB 413

Classifies the making, distribution or possession of an unlawful telecommunications device as a criminal offense punishable by fine or imprisonment.

Utah SB 31

Classifies the use of a telecommunications device with the intent to avoid payment as a Class B misdemeanor if the value of the service is less than $300 and as Class A misdemeanor if the value of the services is between $300 and $1,000. It is classified as a second degree felony if the value is between $1,000 and $5,000. Also includes penalties for possession of cloning paraphernalia and possession of five or more unlawful telecommunications devices.

Miscellaneous Regulations

Miscellaneous regulations cover a broad variety of issues, including: rights of way, repurchasing of telecommunications equipment, granting of certificates, and establishing access rates.

Arkansas SB 302

Relates to the creation of rural telecommunications cooperatives, formation and membership of their boards and use of public rights or ways.

Colorado HB 1268

Makes wiretapping of a cordless phone a Class 1 misdemeanor.

Colorado SB 226

Concerns the exemption of telephone marketing service companies from the laws governing telemarketing fraud.

Georgia HB 888

Establishes a toll-free calling area between two telephones within a 22-mile radius of an exchange.

Idaho HB 367

Defines a public right of way as surface, air or underground street, path, bridge, highway, etc. that can be used to install telecommunications systems, subject to city or county authority.

Illinois SB 949

Provides that laws pertaining to public utility rates, services and regulations apply to both noncompetitive and competitive telecommunications services.

Iowa HF 596

Authorizes the Utilities Board to issue certificates of convenience and necessity to municipally owned utilities that provide basic local exchange services.

Louisiana HB 1481

Authorizes the chief engineer to issue permits for the use of public rights of way for the installation of telecommunications equipment. Also creates the Right of Way Permit Processing Fund to defray expenses related to the issuance and processing of right of way permits.

Louisiana SB 1061

Creates the Office of Telecommunications Management to establish and coordinate all telecommunications systems and services.

Louisiana SB 1507

Excludes commercial mobile service from the definition of telephone public utility and thus exempts commercial mobile services from fees levied on motor carriers and public utilities.

Maine HP 544

Relates to rate regulation of telephone utilities.

Maine SP 82

Exempts telephone utilities from certain requirements necessary to begin providing services.

Maine SP 243

Authorizes the Public Utility Commission to establish intrastate access rates that are less than or equal to the interstate access rates. Also authorizes the commission to make a report on plans to align the intrastate and interstate access rates.

Minnesota SB 442

Defines a telecommunications right of way user as a person owning or controlling a right of way used for transporting telecommunications services. Also authorizes local governments to regulate use of public right of ways by telecommunications companies.

Minnesota SB 555

Relates to the formation and operation of a telecommunications services purchasing cooperative and defines basic and advanced telecommunications services.

Missouri HB 620

Prohibits any political subdivision from providing or selling telecommunications service for which a certificate of service authority is required. (Expires August 28, 2002.)

Missouri SB 333

Mandates that a live operator be accessible at the beginning of a telephone call unless that call originates from a correctional facility.

Nevada SJR 8

Urges the Nevada Congressional Delegation to introduce and support legislation assisting local phone companies to obtain rights of ways over public land managed by the federal government.

New Hampshire HB 452

Establishes a commission on telecommunications restructuring.

New York SB 375

Allows a telephone customer to provide a password to lift a block on the telephone and restricts calls to telephone numbers in the 800 or 900 area codes.

North Dakota SB 2187

Regulates the use of state telephones by appointed and elected state officials.

Ohio Amended Substitute HB 210

Prescribes conditions concerning the authority of the director of transportation to grant leases or easements on federal property for telecommunications services.

Oregon HB 3168

Exempts telephone call aggregators from paying for local exchange services.

Rhode Island HB 5122

Establishes licensing for Telecommunications System Contractor, Telecommunications Systems Technician, and Telecommunications System Limited Installer. Violations will constitute a misdemeanor.

Tennessee HB 1427

Authorizes municipalities that operate electric plants to own or acquire and provide telecommunications services.

Texas HB 2128

Prohibits a telecommunications provider from offering caller ID unless authorized to do so by the Public Utilities Commission. Also prohibits telephone solicitors from using equipment that prevents caller ID from working.

Utah SB 13

Requires interconnection between telecommunications corporations to permit mutual exchange of traffic between their networks. Allows disputes over interconnection or the planning of facilities or unbundled elements to be brought to the commission and requires the commission to set rates and remove subsidies.

Utah SB 92

Relates to the negotiation of rates and allows an incumbent telephone corporation to negotiate for the provision of retail public telecommunications services and submit for approval any rate, toll, fare or charge.

Washington SB 5370

Reduces the time requirement for public notice of telecommunications rate reductions so that a telecommunications company may decrease rates with 10 days' notice.

Conclusion

Virtually every state has considered or enacted legislation to regulate the telecommunications industry in the past decade. State legislatures continued to be at the forefront of change in state telecommunications policy in 1997. There will likely be legal challenges to these newly enacted state laws and to the Telecommunications Act of 1996. In fact, it seems likely that for years to come the Federal Communications Commission, state legislatures, state public utility commissions, courts and the telecommunications industry will continue to address issues that were not clarified in these new state laws and the federal act.