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March 18, 2011

Re: Telecom and Cable Deregulation Vote on Monday March 21

Dear Mayor,

Monday the Senate takes a final vote on S-2664 “Market Competition Consumer Choice Act”.  This legislation hurts municipalities.  Below is an open letter from League Executive Board Member, Mayor Brian Wahler, Piscataway.  Mayor Wahler is Chair of the League Telecommunications Committee and has been working tirelessly to try and correct this legislation – but to no avail.  In these final two days before a vote, he asks you to take a moment to learn about this bill and ask your Senator to vote no on Monday.  You can access more information from our letters of March 11 and March 16 posted at www.njslom.org

Very truly yours,
William G. Dressel, Jr.
Executive Director

ASK YOUR SENATOR TO VOTE NO ON NEW JERSEY SENATE BILL S-2664

Time is running out! New Jersey Senate Bill S-2664 (Market Competition Consumer Choice Act) is expected to come to a floor vote in the Senate on Monday. The Assembly bill, A-3766, has already come out of the Assembly. These bills, authored by the New Jersey Cable Telecommunications Association, will result in the loss of important benefits and services to which consumers and communities are currently entitled. According to a 2009 survey by the National Association of State Utility Consumer Advocates and others, rates rose in 17 of 20 states that deregulated telecommunications services. The increases ranged from 8 percent to 100 percent! In Illinois deregulation legislation passed last year and AT&T increased rates up to 63%. If Senate Bill S-2664 passes and the telecommunication industry are deregulated there will be no protection – none - standing between the consumer, the municipality and the telecom industry.  Consumers will be subject to the whims of these companies who with no particular justification can add new charges at will. With the speed of innovation in these industries, municipalities must also have recourse to recoup franchise costs that exceed the present franchise fees. Under this bill, the right of a municipality operating under a municipal-consent based franchise, would no longer have the ability to petition the Board of Public Utilities (BPU) for a raise in franchise fees.

Let’s look at some of the other ways the passing of Senate Bill S-2664 will directly impact YOU, the consumer and the community in which you live. First of all, these bills will virtually eliminate any state oversight of the cable companies. By eliminating the consumer protection you now have, telecommunication companies can cut services, dramatically increase rates and impose extra charges on your landline, cable, and internet service. Five years ago when Verizon got the statewide franchise law for their FiOS installation they agreed to provide municipalities with free internet and basic cable service to all buildings operating for the public good including the municipal buildings, police departments, firehouses, senior centers, schools, libraries, and OEM facilities. S-2664 drastically cuts the number of public buildings that would be eligible for these free services. County libraries, fire districts and volunteer fire companies would not receive this service; only one municipal building would be eligible and no building more than 150 feet from an existing line would be eligible. The requirement that a cable company provide free internet and cable to ALL municipal buildings, all schools, all libraries, all firehouses, and rescue squads at no cost to a municipality must be retained.

Assemblyman Upendra Chivukula, Chair of the Assembly Telecommunications and Utilities committee, wrote in a recent Star-Ledger article that “New Jersey can’t afford to continue carrying the added burden of outdated telecom and cable regulations – (it) will discourage leading companies like Verizon and Comcast from making further investments toward broadband infrastructure in New Jersey”. Does anyone really believe that telecom companies now operating in a state with one of the highest per capita incomes in the country will pack up and leave? Assemblyman Chivukula also believes that leaving consumers without protection against abuses from providers, denying towns the fees they get from cable franchises and providing the opening for Verizon to dump its basic phone service customers just won’t happen. I would like to believe he’s right but once there is deregulation, all bets are off.

In 2006, the last time the state-wide video franchising act was discussed in New Jersey there were honest discussions with all the interested parties including municipalities, telecom industry folks and legislators – everyone had a seat at the table. This time around dialogue with all interested parties present didn’t take place. I’m not even sure that Assembly members who voted to pass A-3766 have yet realized the significance of what passing that bill will do to the community in which they live. I do know that passing S-2664 on Monday, March 21st will result in the loss of important benefits and services to which consumers and communities are currently entitled. Please do not let this happen.

Call your Senator before Monday and tell them to vote NO on S-2664. To find your Senators phone number or to send them an e-mail, visit the NJ Legislature’s Web site at www.njleg.state.nj.us/districts/municipalities.

Brian C. Wahler, Mayor, Piscataway, NJ
Chair, NJ League of Municipalities
Telecommunications Committee

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