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June 11, 1999
Mr. Thomas B. Getz
RE: DT 99-018 Final Brief Dear Mr. Getz: With respect to the State of New Hampshire Public Utilities Commission Docket DT 99-018, The Destek Group, Inc., having formally submitted a Petition to Intervene and having participated in the hearings regarding said docket, now wishes to relate to the Commissioners our observations and opinions in the following brief. Background Destek has provided Wide-Area-Networking services and Internet Access throughout the State of New Hampshire and the Northern New England region since 1994. Furthermore, Destek's founder has provided telecommunications and Wide-Area-Network consulting services to New Hampshire companies dating back to 1986. Today, Destek provides services to more than seventy-five K-12 schools in New Hampshire and over one hundred customers comprised of private companies, municipalities, and state agencies in New Hampshire. We also support many dial-up Internet Service Providers whose primary base of business is in the state of New Hampshire. As a small business, Destek represents the result of inspiration, hard work and the deregulation of the telecommunications industry. We are one of over four thousand start-up companies like Destek in the U.S. that has grasped the new opportunities resulting from telecom deregulation and developments in information technology. We believe that it is important to note that it has been Destek and the other four thousand service providers, not the entrenched ILECs, who are largely responsible for the rapid advance of information technology (the Internet) in the United States and in New Hampshire. Because we are relatively new to the telecommunications industry and because the industry is continuously and dramatically being reshaped, we are for the most part unaware of the history and the forces that have allowed us and our peers to enter the fray of the telecommunications industry. We do know that we have enjoyed the benefits of those who have come before us in the battle against monopolistic practices and the creation of today's competitive environment. With only five years of experience in the industry we may have been considered naïve when we were drawn into this docket. However, having become deeply involved in the issues, we have gained considerable insight into the history, the structure, and the regulatory aspects of the current state of the telecommunications industry. We have learned that Special Contracts have a significant impact on how Destek conducts business in New Hampshire and a significant impact on our chances to succeed as a company. In our pre-hearing testimony we asserted; that Special Contracts are anti-competitive and set a pattern of exclusionary and predatory business practices; that Special Contracts impede the competitive forces of the marketplace and stifle innovation; that Special Contracts provide an unfair advantage that can limit the choices of the consumer, artificially dictate pricing, and restrict the quality of services received by the citizens of New Hampshire. Destek further asserted in the pre-hearing that Special Contracts benefiting only one organization are discriminatory and minimize or eliminate the ability for other companies like Destek to compete. Smaller companies may be impacted to the degree of going out of business. These opinions about Special Contracts have not changed since the pre-hearing. In fact as we gather more information and become more involved in the issues, the more founded our opinions become. In our research we have learned that the Telecommunications Reform Act of 1996 made into law the declaration that it is the policy of the United States "to preserve the vibrant and competitive free market that presently exists for the Internet and other interactive computer services, unfettered by Federal or State regulation". In his speech at the signing of the Telecommunications Reform Act of 1996, the President of the United States is quoted as saying, "This law is truly revolutionary legislation that will bring the future to our doorstep….Today, with the stroke of a pen, our laws will catch up with our future. We will help to create an open marketplace where competition and innovation can move as quickly as light". Another executives opinion was found as a reference in the PUC Staff Prefiled Direct Testimony. Governor Jeanne Shaheen made remarks as a New Hampshire State Senator in regard to Special Contracts for the Electrical Industry (RSA 378.18), "I believe that the more special contracts we allow, the longer we postpone the transition to competition…" She went on to add, "I think the fact that there may be special contracts is a recognition that the rates are too high. That is why they may exist. The problem needs to be addressed, as has been said, through competition". We discovered in our research that Section b of RSA 378.18, the NH law that added Special Contracts for the telecommunications industry, was appended to the original law by the State Legislature very soon after the signing of the Telecommunications Reform Act of 1996. We also discovered that the original intent of RSA 378.18 was to help keep businesses and jobs in New Hampshire and that it was not intended to provide a loop hole in our Telecommunications Regulatory Policy and shift the ILEC's cost of gaining market share onto the NH ratepayer. In our effort to gain an objective opinion of the situation we turned to the experts on the subject of telecommunications policy. In an article titled "Telecommunications Policy and the Persistence of the Local Exchange Monopoly" (SEE ATTACHMENT), Mr. David L. Kaserman and John W. Mayo provide a background discussion on regulatory policy and go on to identify the principle debates that are now forging our future telecommunications policies. They make a strong point about the financial incentives of monopolies to distort competition, and the need for aggressive procompetitive polices to fulfill the promise of competition in telecommunications markets. In conclusion, we feel that more than adequate information has been introduced in relation to Docket DT99-018, to prove that NH RSA 378.18.b which allows for Special Contracts, is in direct opposition to the requirement for an open and free market and is therefore in violation of the United States Telecommunication Reform Act of 1996. Furthermore, having shown that RSA 378.18.b is in violation of a U.S. Federal Law, it is therefore in violation of the New Hampshire State Constitution and is therefore unconstitutional. We believe that it is in the interest of the people of New Hampshire that the New Hampshire Public Utilities Commission suspend all applications for Special Contracts and move, with the assistance of the New Hampshire State Legislature, to repeal RSA 378.18.b. Sincerely, Encl: Article - "Telecommunications Policy and the Persistence of the Local Exchange Monopoly" |