January 20, 2011

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    Some of you may know that New York State is considering separately licensing central station monitoring companies.  Presently only alarm companies selling, installing and servicing alarms are licensed.  The move to separately license central stations is either spear headed or supported by some alarm industry people.  I've expressed my opinion that the proposal to separately license central stations in New York is not a good idea or necessary.  The existing alarm license law can more easily be amended to require operators to be fingerprinted like alarm installers.

    Rapid Response's CEO, Russ MacDonnell, has offered his opinion on the matter.  His remarks are below.

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To: To Whom It May Concern

From: Russell R. MacDonnell, Chairman, C.E.O

Rapid Response Monitoring

Date: January 10, 2011

Re: Article 6E New York State

 

    I would like to take this opportunity to comment on the draft proposal of Article 6E. Our team has carefully reviewed this and I attended the presentation of the Article by John Lombardi, who is a member of the Committee that prepared the draft, at the RASIA meeting in Elmsford, NY on January 11, 2011. We recognize that a lot of time and effort has been put into this draft by Committee members. We appreciate that effort and acknowledge that the intention of the committee is to recommend legislation that will be positive for the general public, alarm monitoring

companies, the alarm industry and the State of New York.

    Rapid Response Monitoring Services, Inc. was founded in 1992 in Syracuse, New York. We currently have over 300 employees serving over 1,200 independent alarm companies and their subscribers in all 50 US States. As a wholesale monitoring company we have been burdened by different legislation on a state by state, and at times, county by county basis. We now have a full time licensing staff that makes every effort to comply with and follow the many legislative

initiatives that have occurred in the industry in the last decade. This is a frustrating and expensive exercise, particularly since no legislation has changed our own core operating practices. In essence the only change has been an increase in the cost of doing business.

    In reviewing any legislation we have the following criteria:

1.) Is the goal of the legislation reasonable and necessary?;

2.) Is there a reasonable, measurable standard that can be fairly applied to all organizations

asked to comply with the legislation?;

3.) Finally, in this case, can the State of New York fairly and effectively enforce the

legislation?;

 

    On all counts we do not believe that this legislation is necessary, or in the best interest of the general public, the alarm industry, or the State of New York. While the goal of the legislation is reasonable, it is not necessary. In 1992 legislation was passed licensing the entities that sell, install, and service alarm systems in the State of New York. These are the entities that send personnel into the homes, businesses and institutions in the State of New York to design and install security systems. In many cases they also manage the monitoring center or outsource the

monitoring services to a wholesale central station like Rapid Response. These are experienced licensed operators in the security industry. Over the years these licensed Dealers have become increasingly sophisticated at evaluating central station technology standards, personnel training

and hiring practices, new technology developments, etc. They are the constant watchdog of either their own monitoring center or the wholesale monitoring center. They insist on minimum, reasonable standards, because they want to keep customers and the industry is very competitive.

    They have many choices of monitoring centers and are well positioned to make the right choices for their customers. They are far more effective than the State of New York in assessing whether or not a monitoring center has acceptable standards. The standards that 6E would impose on an alarm monitoring companies will not create any material benefits for the general public that are not already in place. They will simply burden operating companies which will ultimately increase the cost for the general public for the monitoring of their security systems.

When you review the draft of 6E you can see the challenge of developing reasonable standards that can be fairly, objectively analyzed to approve license holders. In this case this draft bill under 69-cc gives the Secretary of State the job of “adopting such rules and regulations consistent with

the provisions of this article as may be necessary with respect to form and content of applications for this license;” and in 69-ee Qualified Manager

“1. Each alarm monitoring organization shall have a designated agent who shall

a.) Be selected to have full responsibility for the operation of the alarm monitoring center and shall have passed an examination prepared by the Secretary of State. Such examination, which shall be the same for all applicants, partly written and partly oral and shall not be confined to any specific method or system.

This Article delegates the details of the program to the bureaucracy of the State of New York. It is short on substance with a willingness to let the State figure out the program. We take no comfort in the fact that an advisory committee of four persons, from four parts of the State of New York will represent the alarm industry and advise the New York State bureaucracy. We would much prefer to have all of the details and costs of the program spelled out before any legislation is considered.

    We also are concerned for out of state competitors under 69-ee5 which states “principals and employers shall be held responsible for any actions committed by their operators when they are beyond the jurisdiction of the New York State Department of State. Out of state Licensees shall provide Power of Attorney to the to the Attorney General office for the purpose of being served

legal notices or subpoenas out of state”. What does this mean? Principals and Employers are responsible for ANY ACTIONS committed by their operators. Does this mean our limitation of liability clause and the protections that our legal entities afford us from liabilities are overruled by this proposed legislation. We find other substantive clauses in article 6E to be objectionable, but the biggest objection, other than the fact that this is simply not necessary, is the fact that the State

of New York is charged with developing the final details of the program and its enforcement.

    In our opinion New York State does not have the resources to develop or enforce this kind of legislation. New York State has a deficit which is over $10 billion dollars, 8 ½ % unemployment, an unfunded pension liability over $150 billion dollars, and a Medicaid program that is one of the most expensive in the country. For the past decade, the government of the State of New York has been one of the most dysfunctional in the country. Our new governor, Governor Cuomo, has an

extraordinary challenge to tum the State around. There will be significant staff and program cutbacks. This is certainly not the time to advance any legislation that is not a necessity for the State of New York. It is also not the time to further burden monitoring companies with more costs and bureaucracy in managing their business. If passed, consumers will pay more as ultimately the consumer pays for an increased business cost. We strongly urge you not to support proposed

Article 6E. The Article should be dropped and the State of New York should focus on the more serious issues at hand.