The essence of the objection to municipal involved in communications is that public intervention will undermine the private sector due to the cost advantages uniquely available to governmental entities, thus creating a barrier to public entry. As we have shown, however, this objection fails in two ways: First, municipalities tend not to become involved in communications in markets characterized by effective competition; and second, where municipalities do become communications providers, private entry into the market tends to be stimulated rather than suppressed.
Ohio Legislation Threatens Rural Landline Phone Service
Once again, consumers must fight to preserve their landline telephone service. This time, the Ohio General Assembly is pondering legislation that can end traditional service for up to 1 million Ohio residents.
Our readers know about the efforts of ALEC and AT&T to drastically reduce their obligation to provide landlines across the country. Up to now, telephone companies were required to serve everyone, but those requirements are under attack, state by state. Bills have emerged in Mississippi, Kentucky, New Jersey and California.
The very real fear is that Ohio's Senate Bill 271 (SB271) will increase telephone prices, reduce service quality, and cause many to lose access to reliable 911 service. Many of those who still depend on landlines, include senior citizens. From an article on the Public New Service:
AARP Ohio State Director Bill Sundermeyer says, besides preserving social contact, land-line phones are needed to protect seniors' health and safety. For instance, some seniors use the phone line to transmit routine health information from equipment in their home to their doctor's office, he says.
"They can make an evaluation of a person's heart and how's it working, of their lungs, etc. That information would be very difficult to transmit over a cell phone."
(on a personal note, I can attest to this….my father routinely uses his landline telephone to send data to the clinic about his pacemaker to make sure it is functioning correctly)
The Office of the Ohio Consumers' Counsel (OCC) also expresses concern with the bill because it would allow telephone companies to stop providing local service in places labeled as "fully competitive." In the SB271 Fact Sheet (read the PDF, which offers a map of the qualifying areas), the OCC explains the problem with this definition:
To be considered “competitive,” a telephone company has to show that only two other companies provide service somewhere in the exchange, but not necessarily everywhere in the exchange. The other companies might not provide basic service, their services might not be comparable in price to the telephone company’s basic service, and their services do not have to be available to all customers within the exchange.
Although this test was designed for the single purpose of giving telephone companies limited flexibility in pricing customers’ basic service rates, SB 271 would give that competitive test an entirely new purpose. Telephone companies would be allowed to declare their entire service territory “fully competitive” if they have shown that all of their exchanges have passed this minimal competitive test—and then could begin withdrawing telephone service from customers in July of 2013 or 2014.
The bill would also allow telephone companies to use the cometititve test to avoid complying with current minimum service quality standards. If companies are exempted, they are not required to adhere to consumer protections regarding billing, repairs, and disconnections.
SB271, like similar legislation in other states, specifically limits Public Utilities Commission of Ohio's (PUCO's) authority to act on behalf of Ohio consumers. Under SB271, PUCO can no longer require a telephone company to serve any particular customer or group of consumers.
This is not the first strike at telephone regulations in Ohio. Two years ago, the Ohio General Assembly passed SB162. That bill allowed telephone companies to raise prices by as much as $1.25 each year for basic telephone service in exchanges that met the competitiveness test. One saving grace in SB162 was the requirement that a Select Committee be established to review the effects of SB162.
Whether or not that Committee will have the opportunity to meet and review the current environment is questionable. SB271 passed the Senate and is now under consideration by a House Committee.
[The coordinator for the Rural Broadband Policy Group, Edyael] Casaperalta says no new telecommunication matters should be introduced until that committee is formed and its report is complete.
"We should not even be considering another deregulation bill without first learning about what type of impact and assessing the impact of that first deregulation bill in 2010."
The Rural Broadband Policy Group is part of the National Rural Assembly, which works on a wide range of issues affecting rural America.