Monday, March 21, 2011

Market Competition and Consumer Choice Act up for Vote in NJ Legislature

The Market Competition and Consumer Choice Act is scheduled to up for vote today in the NJ Legislature.

Assemblyman Upendra Chivukula (D) of Somerset County penned an OpEd recently about the necessity for passing The Market Competition and Consumer Choice Act.

“We may be the “Garden State,” but our economy has long depended on high-tech industries such as pharmaceutical and the telecommunications industries. We can never compete with China on manufacturing costs, or with South Carolina on property taxes, but we can compete with the world when it comes to knowledge industries.

To keep that competitive edge, we have to maintain the flow of investment toward broadband technologies into New Jersey. That’s why it’s essential to modernize an unnecessarily bureaucratic regulatory system.”

Post can be viewed at:

Because regulation is intended to mimic the effects of competition, and the communications industry has become intensely competitive, extensive regulation of the communications marketplace is no longer necessary or appropriate. This bill is intended to dramatically reduce the regulation of telecommunication and cable providers in New Jersey in areas where competition exists in order to further promote competition for the benefit of consumers as well as regulatory parity among the competitors in the marketplace. Accomplishing these goals will require significant overhaul or repeal of numerous sections of N.J.S.A. Title 48 and N.J.A.C. Title 14.

Bill Murphy adds the following commentary on the bill:
Although it is essential to minimize the regulations burdening the hyper-competitive communications industry, there are a few general areas of regulation that may be retained, such as:

• Protections generally applicable to other consumer goods and services (i.e., existing consumer protection, public safety, and unfair and deceptive trade practice provisions of New Jersey law).
• Provisions necessary to comply with federal mandates.
• Provisions governing important social programs (e.g., Lifeline services; relay services for the hearing and speech impaired, and 9-1-1 and enhanced 9-1-1 services).
• Provisions necessary to ensure the efficient functioning of the communications industry (e.g., the State would retain the authority to issue and renew system-wide video franchises, although the now unnecessary regulations imposed on franchisees would be greatly reduced).
• Provisions necessary to control isolated instances in which a provider may be able to exercise undue market power (e.g., intrastate access).

This legislation will not have an adverse effect on consumers for at least three reasons: (1) the ultra-competitive communications market will ensure that communications companies continue to strive to meet or exceed their customers’ needs -- the regulatory changes in the legislation are expressly predicated on the presence of competition in particular areas. If a company ignores the wishes of its customers, they will “vote with their feet;” (2) consumers of communications services will enjoy the same protections that apply to any other consumer good or service (i.e., existing consumer protection, public safety, and unfair and deceptive trade practice provisions of New Jersey law would still apply to communications services); and (3) the legislation will continue to vest authority in the State to regulate those areas where oversight remains appropriate (e.g., where the provider of a service, such as intrastate switched access, has the ability to exercise undue market power).

Recent experience in New Jersey also suggests that consumers will see a significant benefit from regulatory reform – through increased competition and technological innovation. As demonstrated by the BPU’s recent report on the 2006 law authorizing system-wide video franchises, opening up the State’s television market through reduced regulation has created “an increasingly robust, competitive landscape unlike anything the state has ever seen in four decades of cable television services in New Jersey.” The report also noted significant technological advances, as well as increased diversity of programming options, since the law’s enactment, stating that “[n]ever before have so many consumers in our state had such a choice in pricing and programming options. Finally, with respect to consumer protection concerns, the BPU report found no evidence of redlining, and actually saw an industry-wide decline in consumer complaints. ◦