Dear Senator:
On behalf of the National Taxpayers Union’s 18,000 members in New York, I urge you to oppose S7263, a bill that would impose higher, burdensome requirements on mergers and acquisitions in the telecommunications industry.
S7263 would require the New York State Public Service Commission (PSC) to conduct a lengthy review of proposed mergers in the telecommunications industry to determine what “public interests” each merger serves, and would request that the industry demonstrate those interests as a condition for approval of the merger. Additionally, the bill would also force telecommunications companies to return the “benefits” of a merger to ratepayers directly or through instate investment.
Mergers in the telecommunications industry, like most consolidations, are already subject to stringent anti-monopoly regulations at both the state and federal levels. In fact, the PSC currently has the authority to review proposed mergers between utilities under its jurisdiction to ensure they serve the public interest. S7263 is a throwback to a time when telecommunications companies did not face significant competition. However today, telecommunications companies face such competition to an intensive degree, which has contributed to better services and prices.
Requiring telecommunications companies to return 40 percent of the benefits from a merger means everyone would share the rewards but not risks. Rather than encouraging investment in the state, this will hurt New York by driving away investors, who would naturally be reluctant to bear the costs of failed ventures while being forced to share the benefits of successful ones. The loss of investors could also cause a decline in the value of telecommunications stock, which will negatively impact retirees who hold that stock.
Telecommunications is one of the most rapidly changing and innovative industries in the U.S. economy, but it is also one of the most regulated. Policymakers should be working to lighten this burden, not add to it. Therefore, I urge you to vote no on S7263!
Sincerely,
John Stephenson
State Government Affairs Manager