Telecommunications Reports presents . . . . . TR's State NewsWire
January 18, 2001 P.M. Edition

STATES
CALIFORNIA -- Davis nominates new PUC commissioner
INDIANA -- Appeals court rejects cable TV late fee refunds
D.C. -- Suit alleges Verizon is unable to deliver on DSL promises
WISCONSIN -- PSC sets depreciation rates for fixed capital
KANSAS -- Task force recommends extending E911 fee to wireless users
ARIZONA -- Lawmakers examine costs of street cuts to bury fiber
MISSISSIPPI -- Sen. Robertson takes aim at telemarketers
CALIFORNIA -- Davis unveils $167 million in education technology grants
NEW YORK -- Bill aims to create comprehensive telecom privacy law
ARKANSAS -- Bill would prohibit use of wireless phones while driving
IOWA -- NewPath launches DSL service in Des Moines

FUTURE OF REGULATION
CALIFORNIA
Davis nominates new PUC commissioner

Gov. Gray Davis (D.) has nominated Geoffrey Brown to serve as a Public
Utilities Commissioner.  The nomination requires Senate confirmation.
Davis' staff told TR the Senate has one year to act on the
confirmation.  The PUC staff told TR Brown won't begin his term during
today's commission meeting.

Brown would succeed Josiah Neeper, whose term expired Dec. 31, 2000.

Brown is the public defender for the city and county of San Francisco.
He first was elected to the position in 1978 and was reelected in 1982,
1986, 1990, 1994, and 1998.


VIDEO
INDIANA
Appeals court rejects cable TV late fee refunds

The Indiana Court of Appeals has determined that Time Warner
Entertainment Co. L.P.'s cable TV customers aren't entitled to refunds
of late fees they paid but later challenged as excessive.  But the court
remanded to the Marion Superior Court the issue of whether Time Warner
needs the late fees to cover its costs.

In 1998 several Time Warner subscribers filed a lawsuit against the
company claiming that its $4.65 late fee was "excessive, unreasonable,
and a penalty."  The plaintiffs sought recovery of the fees they had
paid and injunctive relief to prohibit the company from continuing to
charge the allegedly excessive fees.

Time Warner cited a study in which it had determined that the 202,000
delinquent customers caused the company to incur costs of $1 million,
amounting to a $5.11 net monthly cost per delinquency.  The company,
therefore, argued that the $4.65 fee doesn't even cover its costs.

On July 9, 1999, the Marion Superior Court dismissed the plaintiffs'
claims for monetary damages.  But in August 1999 the court granted the
plaintiffs' "motion to correct errors" and directed late fee refunds.
Time Warner took that decision to the state appeals court.

Time Warner argued that the "voluntary payment" doctrine bars the
plaintiffs from receiving any monetary damages.  Citing a 1974 case, the
appeals court noted that the general rule is "a voluntary payment made
under a mistake or in ignorance of law, but with a full knowledge of all
the facts, and not induced by any fraud or improper conduct on the part
of the payee, cannot be recovered back."  (City of Evansville v. Walker,
162 Ind. App. 121, 318 N.E.2d 388, 389 (1974))

The appeals court found that the potential loss of cable TV service or
the threat of litigation doesn't constitute "the type of compulsion
necessary to render the late fee payments involuntary.  Review of the
plaintiffs' complaints does not reveal the possibility of any other
compulsion."

The appeals court said the Marion Superior Court is the appropriate
venue for determining whether Time Warner's late fee is cost-justified.
"This approach both allows the trial court to perform its gatekeeping
function at the summary judgment stage of the proceedings and avoids
placing an onerous burden upon the nonmoving party," the court said.

Judge Carr L. Darden wrote the panel's decision, which was joined by
Judges Melissa S. Mattingly and Sanford M. Brook.  (Case no.
49A02-9910-CV-719 - Time Warner Entertainment Co. L.P., vs. Kelly J.
Whiteman and Jean Wilson)


ADVANCED SERVICES
DISTRICT OF COLUMBIA
Suit alleges Verizon is unable to deliver on DSL promises

A Washington, D.C., law firm has filed a class-action lawsuit against
Verizon Communications, Inc., and Verizon Internet Services, Inc., in
the Superior Court of the District of Columbia on behalf of "all persons
and entities throughout the U.S." who have purchased digital subscriber
line (DSL) service from Verizon.

The complaint alleges Verizon failed to keep its marketing promises to
provide continuously available DSL service except for regularly
scheduled maintenance.  The two D.C. residents representing the
purported class say they experienced "significant access disruptions and
significant delays in obtaining technical service."

The complaint seeks an injunction to prevent Verizon from continuing to
sell DSL Internet access until the service problems are resolved and to
require Verizon to compensate customers for the poor service.

The plaintiffs allege that Verizon was aware that it wouldn't be able to
provide DSL service as promised.  Verizon knew its customers would
experience significant disruptions and delays obtaining support, yet it
still "engages in extensive advertising" to promote DSL service and
continues to "sign up more than 3,000 new customers a day," the
complaint says.

The law firm's lead attorney in the case, Gary E. Mason, said, "Verizon
is acutely aware of the service interruptions and service delays, yet
has failed to disclose these problems to current and potential
customers."

A Verizon Internet Services spokesman said the company wouldn't comment
directly on the complaint but noted that DSL technology still is new and
"evolving rapidly, with the attendant stress and strain."  The spokesman
said Verizon will continue to support the technology and is committed to
providing good service.

The law firm representing the plaintiffs is Cohen, Milstein, Hausfeld,
and Toll P.L.L.C.  A copy of the complaint is available at
http://www.cmht.com/casewatch/cases/verizon.pdf.  (Superior Court for
the District of Columbia, Bruce G. Forrest and Leslie B. Forrest v.
Verizon Communications, Inc., and Verizon Internet Services, Inc.)


FUTURE OF REGULATION
WISCONSIN
PSC sets depreciation rates for fixed capital

The Public Service Commission has reviewed its guidelines for
establishing classes of fixed capital that telecom utilities use for
public utility purposes, the range of annual depreciation rates for each
of those classes, and the composite range of annual depreciation rates
for all classes of fixed capital.  The commission set the range or
annual depreciation rates at 6.25% to 9.25% for all classes of fixed
capital.

The PSC must conduct the review biennially, pursuant to state law (Wis.
Stat. sect. 196.09(9)(a)(2).  The PSC's order and the guideline for
depreciation rates are available at
http://www.psc.state.wi.us/pdffiles/ord_notc/2881.PDF.  (Docket no.
05-DT-104 - In the Matter of Prescribing Classes of Fixed Capital, a
Range of Annual Depreciation Rates, and a Composite Range of Annual
Depreciation Rates for All Classes of Fixed Capital)


WIRELESS
KANSAS
Task force recommends extending E911 fee to wireless users

The state's Wireless E911 Task Force has recommended extending the
existing monthly wireline user fee of up to 75 cents per user to
wireless users to fund wireless E911 emergency response services.  The
task force's recommendation was included in its final report to the
Legislature.

During the 2000 session, the Legislature passed a measure that directed
the governor to convene a task force to determine "critical" issues
surrounding wireless E911 implementation.  (4/26/00 a.m.)  The issues
examined by the task force included (1) what mechanism should be used to
administer the service, (2) whether an oversight board should be formed,
and (3) how and what costs should be recovered.

The task force "strongly" recommended integrating the administration of
wireless E911 with wireline E911 at the local level.  The task force
said local problems would be handled best at the local level.  It
concluded that a state oversight board would be unnecessary and only
would add another layer of coordination and decision-making.

The task force suggested, however, that an entity act as a
"clearinghouse" for information.  That entity also could act as an
adviser to local government and PSAP (public safety answering point)
operators on policy, training, and education matters.

Additionally, the task force said it was "generally accepted" that PSAPs
could recover all incremental costs for providing phases 1 and 2 of E911
service.  The task force said, "It is also generally assumed that the
local exchange carriers will recover their costs through tariffs or
contracts."

The issue at hand, the task force said, was whether wireless carriers
should be able to share in the proceeds of the wireless user fee to
recover their cost.  The task force recommended that any incremental
cost private-sector companies incurred as a result of federal mandates
be eligible for cost recovery.

The full report is available at
http://www.kcc.state.ks.us/utilities/911tf.htm.


STATE & LOCAL GOVERNMENT
ARIZONA
Lawmakers examine costs of street cuts to bury fiber

During this session state legislators will consider how much telecom
companies should be required to pay to install their lines, legislative
staff told TR.  The staff said cities throughout the state have been
drafting a study examining the true cost of cutting up streets to lay
fiber optic cable.  The cities say ripping up streets to bury cables
shortens the life spans of the roads.

The legislative staff added that the cities want to be held harmless for
the cost and want telecom companies to pay more than the actual cost of
tearing up and repairing their roads.  The cities want to be compensated
for the shortened life span of the road.

Lawmakers will be examining whether the telecom companies must pay up
front for the shorter life span and how to differentiate between
problems caused by telecom companies ripping up roads and the cities
ripping up roads for various repairs.  The staff said legislators hope
to balance fairness with predictability, enabling companies to have an
understanding of how much they'd be expected to pay before they dig.

Legislative language addressing street cuts is expected to be added to
SB 1128, the staff told TR.  SB 1128 is a "shell bill," which is a
holding a place for the legislation.  Sen. Scott Bundgaard (R., District
19) is sponsoring the bill.


CUSTOMER-AFFECTING
MISSISSIPPI
Sen. Robertson takes aim at telemarketers

Sen. Thomas E. Robertson (R., District 51) has introduced SB 2362 to
block telephone solicitors from calling consumers who inform the Public
Service Commission that they object to such calls.  The PSC would have
to create a "no-call" database containing telephone numbers of consumers
who don't want calls from solicitors.  Telephone solicitors wishing to
conduct business in Mississippi would have to purchase access to the
database and register with the PSC.

Even when calling a consumer not listed in the no-call database,
telephone solicitors would have to state their name and reason for
calling at the beginning of each call.  Calls could be made only Monday
through Saturday between 8 a.m. and 9 p.m.

The PSC would promulgate the rules necessary to implement the Act and
would investigate alleged violations.  If a telephone solicitor violated
SB 2362, the PSC could issue a cease-and-desist order or call for a
civil penalty of up to $5,000 per violation.  Consumers listed in the
no-call database that still received calls from solicitors could
complain to the PSC.

Caller ID providers, local exchange telephone companies, and long
distance companies wouldn't be held liable for any other party that
violated SB 2362.

SB 2362 has been referred to the Public Utilities Committee, and a
meeting to discuss the bill could take place as early as Jan. 25.  Two
similar bills, SB 2075 and SB 2267, have been introduced by Sens. Delma
Furniss (D., District 11) and Robert P. Chamberlin (R., District 1),
respectively.  The committee chairman, however, is most likely to
consider SB 2362, the legislative staff told TR.


ADVANCED SERVICES
CALIFORNIA
Davis unveils $167 million in education technology grants

Gov. Gray Davis (D.) has released $167 million in education technology
grants for high schools to help fulfill his commitment to make
up-to-date technology available to high school students.  More than
108,000 multimedia and Internet-capable computers will be added to high
schools as a result of these grants.

Bringing the computers into the schools will bring the statewide ratio
of students to multimedia computers down to 5-1.  When existing
computers are factored in, the statewide ratio of students to all
computers will be about 3.8-1, down from 7-1.  More than 1,800 high
schools will receive grants under the programs.

The grants also will help 155 high schools offer students four or more
Advanced Placement (AP) courses when they open in fall 2001.  Those
schools will receive $4 million of the funds to purchase Internet wiring
and computer hardware for students to access online AP courses.

The governor added that another $8 million in technology grants will be
awarded in the next few weeks.


CUSTOMER-AFFECTING
NEW YORK
Bill aims to create comprehensive telecom privacy law

Sen. Carl Kruger (D., District 21) has introduced privacy legislation
(SB 619) to regulate the collection, use, and disclosure of personal
information by telecom carriers.  The bill would establish
"comprehensive privacy protection for subscribers to all forms of
telecommunications services."

It would allow carriers to collect and use "personally identifiable
information" of customers only to the extent necessary to provide
service or in other limited circumstances, such as in response to a
court subpoena.  Carriers would have to obtain customers' affirmative
consent before selling or otherwise disclosing personal information to
third parties.

SB 619 also would prohibit the disclosure, without consent, of
information gathered by monitoring lines to analyze individual use
patterns.

The bill has been referred to the Senate Committee on Energy and
Telecommunications.


WIRELESS
ARKANSAS
Bill would prohibit use of wireless phones while driving

Rep. Kim Hendren (R., District 1) has introduced a bill aimed at
preventing drivers from using wireless phones while operating vehicles.

HB 1229 would allow drivers to use wireless phones designed for
hands-free use as long as they kept both hands on their steering
wheels.  Exceptions would be made for drivers using wireless phones to
report emergency situations and for law enforcement and emergency
response personnel using wireless phones while driving as part of their
jobs.

First time violations of HB 1229 would be punishable by a warning, and
subsequent violations would carry a fine of up to $50.

HB 1229 has been referred to the House Committee on Public
Transportation.


COMPETITIVE LOCAL ENTRY
IOWA
NewPath launches DSL service in Des Moines

NewPath Holdings, Inc., has begun providing digital subscriber line
service to small and midsize businesses in the Des Moines area.  The
company now serves 13 markets in seven states.


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