Could a Connecticut telephone company avoid state service rules by splitting into wholesale and retail affiliates?

Plain-English summary

In May 1997, Connecticut’s AG declined to answer three questions about telephone service regulation. The Senate president pro tempore asked whether the federal Telecommunications Act of 1996 preempted Connecticut’s service reclassification procedures, whether a telephone company could shift its duties by dividing into wholesale and retail affiliates, and whether that structure fit the state law’s policy of regulating services rather than providers.

The Department of Public Utility Control was already considering those legal issues in a contested case about Southern New England Telephone Company’s affiliates. It had held extensive hearings and was awaiting legal briefs. Because the questions were under active consideration there, the AG expressly declined to answer them. This opinion supplies no ruling on the merits of preemption, restructuring or resale rates.

Telephone companies and utility regulators at the time

The AG left the disputed affiliate and service-classification questions with the department’s pending proceeding. His letter did not approve or prohibit a particular corporate structure.

Legislators at the time

The response identified the active administrative docket as the reason the requested interpretation was unavailable from the AG then.

Currency note

This opinion was issued in 1997. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did the AG say a telephone company could escape state rules by creating a retail affiliate?
A: No. He declined to decide that question while the utility regulator considered it in a contested case.

Q: Did the opinion decide whether the 1996 federal act overrode Connecticut’s reclassification process?
A: No. Federal preemption was one of the questions the AG left unanswered.

Q: Was the utility department still considering these questions when the AG wrote?
A: Yes. The AG said it had conducted hearings and would receive briefs in the pending affiliate docket.

Background and statutory framework

The inquiry concerned Public Act 94-83, the federal Telecommunications Act of 1996 and an FCC resale order. The AG described the questions and the pending Department of Public Utility Control case, then stopped without interpreting those authorities.

Citations and references

Acts: Public Act 94-83; P.L. 104-104.

Source

• Landing page: https://portal.ct.gov/AG/Opinions
• Opinion page: https://portal.ct.gov/ag/opinions/1997-formal-opinions/the-honorable-kevin-b-sullivan-legislative-office-building-room-3300-1997013-formal-opinion-attorney

Original opinion text

The Honorable Kevin B. Sullivan, Legislative Office Building, Room 3300, 1997-013 Formal Opinion, Attorney General of Connecticut

Attorney General's Opinion

Attorney General Richard Blumenthal

May 27, 1997

The Honorable Kevin B. Sullivan

Senate President Pro Tempore

Legislative Office Building, Room 3300

Hartford, CT 06106-1591

Dear Senator Sullivan:

You have asked for an opinion with regard to the implementation of Public Act No. 94-83, An Act Implementing the Recommendations of the Telecommunications Task Force. Specifically, you have asked for an opinion on each of the following three questions:

What provisions, if any, in the federal Telecommunications Act of 1996, (P.L. 104-104) would preempt the service reclassification standards and procedures established in Public Act No. 94-83?

Can a telephone company, as defined in C.G.S. Sec. 16-1, relieve itself of its obligations under the state Act by restructuring itself into separate but affiliated wholesale and retail companies whereby the retail affiliate, as defined in C.G.S. Sec. 16-247a(b)(1), retains the entire customer base of its predecessor?

As a result of the federal Act and the FCC's First Report and Order, dated August 8, 1996, interpreting the federal Act to require all services to be resold at a rate discounted below the rate sold to end users, please explain whether the creation of separate wholesale and retail telecommunications entities is consistent with the intent of the state Act, to create a level playing field, by regulating services not providers and treating all providers of competitive services equally.

The legal issues you have raised are presently under review and consideration in a pending administrative docket of the Department of Public Utility Control (the "DPUC"), the state agency having responsibility for the implementation and enforcement of the provisions of both Public Act 94-83 and the federal Telecommunications Act of 1996. In the DPUC's docket 94-10-05 entitled DPUC Investigation of the Southem New England Telephone Company Affiliate Matters Associated with the Implementation of Public Act 94-83, the DPUC has conducted extensive hearings and will be receiving legal briefs on the issues raised in your letter from the participants in the proceedings. Since the issues you have raised are under active consideration by the DPUC in a contested case, I must respectfully decline to answer your questions at this time.

If I can be of further assistance, please feel free to contact me.

Sincerely,

RICHARD BLUMENTHAL

ATTORNEY GENERAL