News Story

State Phone Mandate Could Cost Small Business Millions

Firms may just junk their landline phones and go all cellular

A twice-delayed mandate on commercial and institutional phone systems could soon require costly upgrades for hundreds of businesses across Michigan, according to a leading association of small employers. The mandate, intended to enhance 911 emergency calling capabilities, will proceed at the end of the year, absent intervention by the Legislature.

The National Federation of Independent Business is calling for the repeal of the mandate on facilities of 7,000 square feet or more with multiline telephone systems, a requirement it regards as onerous and unnecessary.

Charlie Owens, director of NFIB Michigan, said the rule imposes potentially significant costs on the owners of small businesses and others, in return for nebulous or dubious benefits to public safety.

Owens said state regulators, headed by the State 911 Committee and the Michigan Public Service Commission, have been extremely rigid in developing the rule, authorized by a 2007 statute and originally set to go into effect in 2011.

Especially aggravating, he said, was the decision to reduce the minimum size of affected facilities from 40,000 square feet to 7,000 square feet.

Responding to objections from business and institutional phone system operators, the Legislature initially delayed implementation to 2016, and then to Dec. 31, 2019.

The Archdiocese of Detroit, for instance, initially said compliance costs could run as high as $2 million for its facilities.

Owens said it is time to scrap the rule altogether, at least for small business.

“It simply will not accomplish the objective. Technology is moving more rapidly than (state regulators) can keep up,” Owens said. “Faced with the cost of swapping out an entire phone system, some business owners will just get rid of them and go to cell phones.”

The State 911 Committee, largely responsible for developing the regulation, opposes another extension or revocation, said committee administrator Harriet Rennie-Brown.

The mandate is intended to give 911 operators critical information about the specific location of an emergency that, until recently, was typically not available when a 911 call came in from a multiline phone system, she said. First responders reacting to an active shooter in a large office complex, for instance, might need to be able to precisely locate where trapped workers are calling from, Rennie-Brown said.

The earlier delays in implementation have provided business and institutional owners sufficient time to comply, the committee said in a 2017 letter to the Legislature in opposition to additional extensions.

NFIB’s Owens said the regulation remains incomprehensible and unworkable for many of the association’s 10,000 members in the state and should be shelved.