Bill to deregulate telecoms in Pa. concerns industry

AICC says legislation would give telecoms like Verizon unfair advantage over security company competitors, but Verizon denies that
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Wednesday, August 8, 2012

HARRISBURG, Pa.—Proposed legislation in Pennsylvania to deregulate the telecommunications industry in the state would give an unfair advantage to telecom providers of home security services, according to an attorney with the Alarm Industry Communications Committee (AICC).

“It does impact the alarm industry in a pretty major way,” said Ben Dickens, who is also legal counsel for the Central Station Alarm Association. The AICC is composed of members from the CSAA, the Electronic Security Association the Security Industry Association and major alarm companies and manufacturers and represents the alarm industry before Congress, the Federal Communications Commission and the courts.

Dickens cited Verizon, the New Jersey-based telecom that launched a home automation/home security offering last year, as one of the key beneficiaries of such a law. Verizon’s Home Monitoring and Control Service costs $9.99 per month and currently has no professional monitoring component.

“Verizon has announced that it’s getting into the security industry business at some level and deregulation poses a number of dangers to a level playing field between Verizon, for instance, and the alarm industry,” Dickens told Security Systems News.

However, a Verizon spokesman contends the legislation—which was proposed in the House of Representatives here and whose legislative sponsor says is designed to “phase out regulation of telecommunications utilities by the Public Utility Commission and permit the development of free market competition between traditionally regulated telecommunications carriers, cable companies, VoIP carriers and wireless carriers”—has nothing to do with security services.

“It really focuses on basic residential phone service that is still primarily subject to a lot of these [regulatory] rules,” Lee Gierczynski told SSN. “It really would not have a lot of impact on Verizon’s home automation services because those are already competitive services that we offer. Those aren’t even under the purview of the Public Utility Commission, so they wouldn’t be part of this at all.”

But Dickens said deregulation of local telecommunications is of great importance to the industry. “The alarm industry still very much relies on, in particular, Verizon’s [wire line local] facilities in Pennsylvania and the Northeastern United States,” he said. “So, there’s a lot of concern about fairly competing with a company whose facilities you’re very much dependent on to get your signals between your customers and your central station, when that company is also deregulated and they can discriminate against you in ways that are very hard to detect and hard to police and hard to enforce. So legislation like this in Pennsylvania is a very big concern to the alarm industry.”

Gierczynski maintains the bill is simply to “update the rules [put in place] when there was just a single monopoly provider but now you’re in a world that’s digitally connected and there competition for voice services and different technology that provide voice services. Really, it’s updating the regulatory environment in Pennsylvania to reflect how technology has changed the industry.”

He said it’s aimed not at the security industry but Verizon’s other competitors, such as cable companies. Gierczynski said, “The cable providers are probably the second largest providers of phone service in the state of Pennsylvania,” but are not regulated like Verizon.

“The goal of the bill,” he said, “is to level the playing field, so to speak, so all providers can still provide voice services on an equal basis.”

But Dickens and ESA government relations director John Chwat say the situation is reminiscent of the 1980s and 1990s when the Bell System was breaking up.

Dickens said that Congress in 1996 “barred the Bell companies, which included Verizon by the way, from even entering the alarm industry for five years, and that was based on a lot of history of the old Bell System.”

Because of that past history with deregulation, Chwat told SSN, “we have to be very vigilant.”

But Gierczynski denied any link between the past and this legislation.

“There’s no comparison between the two,” he said. “A company like Verizon doesn’t have a dominant position in security services. We’re a small competitor entering an already established industry.” He questioned whether the opposition to the bill comes from “the existing companies trying to protect their market share more than anything.”

Dickens said the Pennsylvania bill will be discussed at a meeting of the AICC in September, “with the idea of educating our members nationally to look out for this kind of legislation.”

Gierczynski said other states have already passed legislation similar to what is proposed in Pennsylvania. “Over the past five years, there have been 20 states that have modernized their laws affecting communications so Pennsylvania is not breaking any new ground there,” he said.

Comments

On the surface it appears that it is easy for Verizon to simply come into the industry by offering a ridiculously low monitoring rate, but they will soon find out that there's a lot more to it than they imagine. I would love to see how they will handle permits and inspections in cities that require it. An I wanna see how they will handle police registrations when customers start getting fines for not being registered. I have an ADT Miami authorized dealership and can tell you firsthand that it's not as easy as they believ it will be penetrating an already saturated market even with a ridiculously low price.