LANSING – The Michigan Public Service Commission would serve as a safety valve to address concerns about the loss of voice service in an area where a provider decides to end traditional landline service and no credible alternative exists under a bill approved Tuesday by a Senate committee.

The Senate Energy and Technology Committee adopted an S-1 substitute to SB 636 that retains the bill’s main purpose of simplifying the process for a telephone company to discontinue landline service. The company would still have to win approval from the Federal Communications Commission, but no longer need front-end approval from the state’s Public Service Commission.

Under the new version of the bill, a customer of the provider seeking to discontinue landline service or an interconnecting telecommunications provider can petition the PSC to investigate the availability of reliable voice service with access to 911. The bill then lays out how the commission can declare an emergency in that area and conduct a request for service to find a willing provider of that can offer reliable voice service with 911 capabilities.

If such a provider cannot be found, then under the bill, the PSC can compel the provider that wants to end landline service in an area to continue voice service, either through an alternative technology, or if that is not sufficiently reliable, by maintaining its landline system.

The change was enough to move the PSC, which had strongly opposed the original version of the bill, which offered it no role, to neutral.

And the bill cleared the committee on a 7-1 vote with Sen. Howard Walker (R-Traverse City) the lone no vote. Sen. Coleman Young II (D-Detroit) abstained.

But the AARP, which has led the opposition to the legislation, said the changes, which it said improved the bill, did not do enough to mitigate its concerns. Melissa Seifert of the AARP said the bill gives the PSC no role in determining the existence of a competitive market or addressing issues on the front-end, instead putting control with the FCC.

Seifert also criticized putting the burden of asking for an investigation on consumers instead of letting the PSC launch an investigation on its own.

AT&T has led support for the legislation and launched a major media offensive in recent weeks to counter the AARP criticism, especially targeting what its officials have said is the misperception that people using telephones are using landlines. Many people in fact are using voice over Internet protocol, not a traditional landline.

The problem, AT&T spokesperson Matt Resch said, is that the equipment to maintain the traditional landlines is increasingly expensive to repair and replace as it becomes outmoded.

And the key is to streamline the process so that they will not have to go through the FCC and the PSC at the front end of the process, Resch said. The bill would not implement the new process until 2017. Resch said it probably would not be until 2020 when AT&T might need to use the new process.

“We’re looking to streamline the process to have the MPSC to make their feelings known in that federal process, just streamlines the process, so that we don’t have 50 different hoops to jump through,” he said.

Thane Namy, CEO of Clear Rate Communications, a competitive local exchange carrier based in Birmingham who said the company has 40,000 customers statewide, blasted the bill, saying it would put his company, and other Michigan-based firms, out of business.

“I am still in disbelief that this bill has gone this far,” he said.

But Resch said the bill has nothing to do with wholesale relationships between incumbent and competitive carriers. The FCC regulates those relationships, not the PSC, he said.

Sen. Mike Nofs (R-Battle Creek), the committee chair, said the bill strikes a balance that ensures the PSC can act if people potentially could lose all telephone/voice service.

Nofs said he does not yet know if the bill will pass the Senate before the end of the year, but that is his hope. The House could then begin work on it in 2014. He rejected the idea that the bill is a sop to AT&T.

“It still affords the opportunity and the guarantee that individuals will have phone service if they want it that is reliable, which is a word in this bill that AT&T doesn’t like,” he said. “And it gives the MPSC authority to order AT&T you cannot leave even if you go through and get the federal okay, so there are safeguards still in this bill that I think protects everyone. It streamlines the process.”

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