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Wednesday, April 18, 2012

New Hampshire likely to loosen regulations on phone charges, voice over Net

CONCORD – New Hampshire appears well on its way toward deregulating the price of retail telephone service and loosening most other aspects of a century of government oversight, although details about Internet-based voice communication remain to be worked out.

Not everybody is happy with this prospect, however – notably Brian Susnock, president of Nashua’s Desktek Group, an Internet provider. Susnock has been part of the state’s telecom scene for some two decades, and for much of that time, he has fought with regulators and bigger companies.

Susnock spoke Tuesday at a hearing before a House committee considering a bill to loosen telephone relations, after similar action taken last week in Maine and, to a certain extent, late last year in Vermont.

The bill will be discussed in a working session by the Science, Technology and Energy Committee, partly in response to some concerns from the Public Utilities Commission. But it appears headed to the floor of the House soon, where it has bipartisan support. It has already passed the state Senate.

“The goal is to have as little regulation as possible in the retail market,” said Rep. James Garrity, R-Atkinson, chairman of the committee.

Susnock decried the bill in question (SB48) as too confusing and convoluted to be easily understood, and he said it would fail to increase competition because traditional phone service is doomed by technical changes.

“No regulation is going to stop the eventual demise of telephone companies. Cable companies are going to rule,” Susnock predicted. “This (bill) will do nothing for competition.”

FairPoint disagrees. It supports the bill, which would allow the company to switch residential pricing and services without having to get permission from the Public Utilities Commission.

The state’s biggest telephone company argues such changes are necessary to compete against new technologies and are fair, since competition from other voice providers means the local phone company is no longer the absolute monopoly, which justified regulation in the days of Ma Bell.

“This will give us the ability to have more flexibility in pricing and services,” said FairPoint spokesman Jeff Nevins.

The bill also says the state has no regulatory authority over services that use Internet Protocol rather than switched telephone networks. This is an important issue because most newer services, including phone calls over cable modems and Net-based voice services like Vonage and Skype, are what is usually called IP-enabled service or VOIP (voice over IP).

Some fear that completely freeing IP from regulation could kill the long-established safety net of universal, basic phone service from some places, such as remote rural areas, if traditional telephone “twisted pair” copper lines no longer become viable.

That concern led Maine, in a deregulation bill that became law last week, to establish a provision mandating that a Provider of Last Resort always be available, whether it be FairPoint, a smaller phone company, a cable firm or mobile network or even an Internet-only company.

“Maine’s (law) is much more conservative than New Hampshire,” said Katherine Bailey, director of the PUC’s telecommunications division.

The question of IP regulation came to a head last year when the PUC ruled that in some markets, Comcast’s voice service met the definition of public utility in state law – which says it covers any firm operating equipment “for the conveyance of telephone or telegraph messages,” and therefore was subject to regulation.

In 2010, FairPoint had about 250,000 access lines in New Hampshire, smaller incumbent phone companies like TDS in Hollis and Wilton had 129,000 lines, and cable companies like Comcast had 203,000 lines – meaning FairPoint had less than half New Hampshire’s market for customers using landline phones.

A survey also estimated that one-sixth of New Hampshire residents had only cell phones, no land lines.

David Brooks can be reached at 594-6531 or dbrooks@nashua