Honorable Robert Bunda

President of the Senate

Twenty-Second State Legislature

Regular Session of 2003

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection and Housing, to which was referred S.B. No. 1049 entitled:

begs leave to report as follows:

The purpose of this measure is to terminate the oversight of wireless telecommunications providers by the Public Utilities Commission (PUC).

AT&T Wireless and Verizon Wireless testified in support of this measure. The PUC, Consumer Advocate, and Department of Taxation presented comments on the measure.

This measure deregulates the wireless telecommunications industry in Hawaii by excluding from the definition of "public utility" in chapter 269, Hawaii Revised Statutes, persons granted an exclusive wireless telecommunications license by the Federal

Communications Commission.

Your Committee has amended this measure to provide for the partial deregulation of the wireless industry. As amended, this measure continues PUC oversight with respect to certification, exemptions and waivers, the annual public utility fee, liability for damage to public utility property, the Public Utility Special Fund, and the Universal Service Fund. PUC oversight would be eliminated with respect to general supervision, financial reports filing, accident reporting, tariff filing, termination of service, securities issuance, issuance of voting stock, acquisition of another public utility's stock, merger and consolidation, and penalties. In addition, under this measure, as amended, a wireless carrier would not be subject to investigations by the Consumer Advocate and the PUC would not receive complaints about wireless carriers.

Your Committee finds that the issue of wireless deregulation raises several concerns including those relating to the collection and adjudication of consumer complaints, the impact on programs designed to provide greater access for the disabled, the implementation of number portability, and revenue losses resulting from a decrease in public service company taxes. In order to facilitate further review of these and other matters, your Committee has inserted into the measure a delayed effective date of July 1, 2050.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection and Housing that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 1049, as amended herein, and recommends that it pass Second Reading in the form attached hereto as S.B. No. 1049, S.D. 1, and be placed on the calendar for Third Reading.