Illinois Bill Could Lead to Monitoring Monopoly
|IESA lobbyist Richard Lockhart, Chet Donati and Kevin Lehan discussed IESA’s game plan to battle the anticipated legislation at a meeting in Des Plaines, Ill., Jan. 19.|
A new bill concerning fire alarm installation, monitoring and maintenance was proposed by the House of Representatives during the Illinois 97th General Assembly on Feb. 9, 2011. The bill, sponsored by Rep. Donald L. Moffitt, was moved from the Rules Committee to the Executive Committee on Feb. 15, bringing it one step closer to becoming law.
Titled Fire District Antitrust Exemption, IL HB 1301 would give fire protection districts in the state of Illinois the authority to mandate the use of fire alarm monitoring equipment “in order to improve the response time of the district’s fire department to locations equipped with fire alarms thereby saving lives and property and promoting firefighter safety.” The bill also states fire protection districts could set up and operate wireless radio networks and monitoring stations, establishing monitoring fees. Under this legislation, fire protection districts would be exempt from antitrust laws.
The Illinois Electronic Security Association (IESA) has issued a position paper on the proposed bill. It states the bill would “allow fire protection districts to engage in the fire alarm monitoring business… [and] mandate that everyone use the fire district’s monitoring business.” The paper contains a list of reasons for IESA’s opposition, including a refutation that this bill is concerned with public safety as the private industry has the technology, infrastructure and national fire codes to address any safety concerns. IESA also points out several ways in which businesses — particularly small businesses — will be hurt by the legislation, and the bill’s potential for allowing abuse of power, among others.
The IESA has been fighting this initiative since late 2010, holding some of its best-attended meetings throughout Illinois to raise awareness of ordinances coming up at the municipal level that seek to wholly take over monitoring contracts. The IESA also informed dealers of the anticipated bill and the real possibility of the initiative spreading to other states.
At a January 19 meeting in Des Plaines, Ill., at the EMERgency 24 headquarters, IESA members discussed these ordinances, the most onerous of which popped up in Crystal Lake, where municipal monopoly over monitoring could be extended to burglar alarms in addition to fire, and Lisle/Woodridge, where the municipality sent notices to commercial customers with monitored fire alarms stating all monitoring contracts with private alarm companies were from that point on null and void. As SDM reported in its January issue, pg. 17, a group of alarm dealers led by ADT challenged the ordinance in Lisle/Woodridge, attaining a preliminary injunction against the district.
“Districts that have purchased their own monitoring equipment have aggressively pursued taking monitoring business from private companies,” states the IESA fact sheet. “The districts tell business owners that their company must enter into five year contracts with the district or face fines and lose their certificate of occupancy.”
In all cases, Chet Donati, IESA president and owner of DMC Security Services in Midlothian, Ill. said, the security industry has been seriously misrepresented in order to justify the district’s intervention. Proponents have misquoted sections of NFPA 72 to indicate the private alarm industry can take anywhere from 90 seconds to 15 minutes to transmit an alarm signal when most are answered within 15 to 20 seconds. The technology they suggest to fix this “problem” is technology already available to and deployed by the security industry that will cost fire districts massive capital to implement. Furthermore, Lehan notes that though private security companies have the infrastructure and resources to react and adopt new and improved technologies as they are developed, fire districts will commit themselves to technology that could be obsolete in five years.
The IESA fact sheet also says, “The bill calls for technology that is already in place,” going to on to explain that “quality of service [in the security industry] is ensured through licensing, fire codes and certification by nationally recognized testing laboratories (e.g., Underwriters Laboratories and FM Global).”
An antitrust law exemption is written into the bill, stating that as fire districts will be the sole beneficiaries of the Act, state action exemption to federal antitrust laws will apply. Federal antitrust laws are put in place to encourage competition. “The bill encourages abuse of power,” the IESA paper continues. “This bill allows fire districts to force every business in its jurisdiction to enter into alarm monitoring contracts with the district ... The business community is entitled to free choice and the ability to negotiate with service providers.”
The ordinance trend in Chicago suburbs leaves little doubt that the intention behind the state-wide legislation is not simply to regulate fire alarm monitoring but to monopolize it. IESA has repeatedly urged Illinois dealers to reach out to their legislators, making them aware of the dangerous implications of this bill. Additionally, the IESA has called for nationwide involvement from the entire alarm industry.
In its conclusion, the IESA fact sheet said, “The bill introduced seeks to legitimize a practice that is anti-competitive, dangerous and that has been declared illegal by a federal court. The primary motivation of the proposed bill is to take over an area of private business that took over a hundred years for private industry to build. It is a revenue booster for fire districts. It does not, however, improve response time or increase firefighter safety.”
Kevin Lehan, executive director at IESA and public relations manager at EMERgency 24 Inc. said, “If this passes, the result will be that instead of 20 small businesses competing in a market, one company will be selected to do all service and installations while the government claims the monitoring revenue.
“The IESA is planning a Legislative Day in Springfield to be held in the near future when the lawmakers are in session,” Lehan adds. At the time of writing, the date has yet to be announced.
A summary and full text of the bill are available on the Illinois General Assembly website at www.ilga.gov. The IESA fact sheet detailing the association’s opposition to the bill is available at www.sdmmag.com. — By Sabrina Gasulla, Associate Editor