House rejects Senate-amended CTC bill

The House of Representatives has rejected the Senate’s amendment to the bill that seeks to increase the funding for the Commonwealth Telecommunications Commission by increasing the franchise fee that is charged telecommunications companies.

The Senate had passed the measure with a provision that essentially prohibits telecommunications companies like Verizon from passing on the increased fee to consumers.

The House, during its Monday session on Rota, rejected House Bill 14-251, saying it was not similar to the bill they had earlier passed.

The House had passed the bill without the “pass on” provision. The Senate amended it to clearly say that telecommunications companies may not pass on the fees to consumers.

The bill provides that the charges to be imposed on any telecommunications company shall not exceed 2.5 percent of its annual gross revenues and “such charges may not be passed on to consumers.”

“We rejected it because it’s not the same as what we approved,” said Rep. Claudio Norita.

He said the measure now goes to a conference committee.

The franchise fee increase would primarily be used to increase the funding for CTC, the Commonwealth’s telecommunications’ regulatory body.

Despite ethical concerns raised by some lawmakers on the use of client’s money to fund CTC, the House moved to approve the bill, citing its importance in the ongoing negotiations for the sale of Verizon to Pacific Telecommunications Inc.

The House version originally contained a provision specifically allowing a telecom company to pass on the increased fee to consumers. It was deleted, however, following a lengthy deliberation on the issue.

House members noted, though, that the removal of the phrase does not prohibit a company from passing it on the public.

Norita earlier said the deletion only means that the Legislature is not sanctioning the passing on of the added cost to the customer.

H.B. 14-251 aims to amend the existing Telecommunications Act to raise CTC funding from .5 percent to 2.5 percent, which actually restores CTC funding to approximately 60 percent of its previous funding level.

The bill also aims to provide funding for a telecom consumer advocacy, to set up a Universal Service Fund, and to provide CTC with discretion for spending a portion of its budget on items to be addressed in CNMI Universal Service fund regulations.