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AT&T and ALEC Take Aim at Connecticut for Third Year in a Row

StopTheCap! reports there are three bills in the Connecticut General Assembly that, if passed, will leave little or no protections for customers of plain old telephone service who encounter difficulties with service. AT&T and ALEC back these bills for the third year in a row.

Such bills are not new to our readers who often see our reports on large corporate providers that use state legislators as vehicles to shed regulations. Phil Dampier from StopThe Cap! summarizes all three bills:

HB 6401: House Bill 6401 strips the Public Utilities Review Authority (PURA) of their ability to regulate Voice Over Internet Protocol (VoIP) telephone services. An emerging market, this bill creates deregulation for the sake of deregulation.

HB 6402: House Bill 6402 eliminates the right of regulators to oversee AT&T to make sure it has some form of accountability to the public. The section on annual audits has been gutted, making it impossible to protect the public from rate-fixing. More importantly, it includes a provision to allow AT&T to end service to any customer it wants upon 30 days’ written notice. [PDF of the Nonpartisan Bill Summary available from the Connecticut General Assembly]

SB 888: Senate Bill 888 has an ALEC-drafted provision that allows cell phone towers to be built on public lands on a presumption that the will of telecommunications companies is in the interest of the public good.

As we saw in Kentucky, concerned citizen groups will not take the change lying down, joining forces to form the Don't Hang Up on Connecticut coalition. AARP Connecticut leads the charge to motivate seniors and their families, a group traditionally dependent on landlines. George Gombossy, from the New Britain Herald, spoke with John Erlingheauser, AARP's advocacy director:

Erlingheuser said his organization is particularly concerned with three elements of the proposal: Allowing AT&T to stop providing any of its services with a 60-day notice to the Public Utilities Regulatory Authority.

Limiting the state’s quality of services standards “which cover such things as responding to trouble reports and service outages.” And a halt to annual audit of AT&T’s business in Connecticut in which the company reports on its investments in infrastructure and modernization.

The three, he said, will result in AT&T spending less on traditional phone system and more on its cellular and Internet-based systems.

Connecticut Seal

The list of supporting legislators and AT&T lobbyists includes ALEC chairs on both the federal and state level.

The New Haven Register also reported on the measure:

“If AT&T is allowed to drop service in unprofitable areas at their sole discretion, if they’re allowed to let service outages drag on for weeks with no consequences, if they’re allowed to jack up rates — of course they will,” Daniel Ravizza of Connecticut Citizen Action Group said in a statement. “‘Trust me’ is not a good enough guarantee for Connecticut consumers.

We interviewed Harold Feld twice for the Broadband Bits podcast and he talked about the transition to new voice technology and his expectations from AT&T. Feld described AT&T's business practices and history of investment, or lack thereof - that history that supports Ravizza's concern.

We will be following this story and hope to soon report on the coalition's success. For more on how Kentucky citizens stopped similar legislation, you can listen to Christopher interview Mimi Pickering and Tom FitzGerald in episode #44 of the Broadband Bits Podcast.  

Connecticut Power Outage Shows Superiority of Community Ownership

Rob Cox, a writer for Reuters, has delved into the disappointing response of some investor-owned utilities in Connecticut following the recent blizzard, noting the better performance of muni power companies. Hurricane Irene recently revealed the similar superiority of muni electrics compared to the investor-owned in Massachusetts, prompting us to note the parallels with Wired West's initiative in Western Massachusetts. They have created an electric light coop to build a next-generation fiber-optic network out to everyone in the area.

And on the same day that Longmont embraced locally owned broadband in Colorado, nearby Boulder started the process of kicking Xcel out in favor of an electric grid that is accountable to the public.

So let's see what the New York Times has to say about municipal ownership of infrastructure. They begin by noting the many ways Connecticut Light and Power (the subsidiary of Northeast, an investor owned utility presently consolidating with another large IOU) has cut its maintenance spending over the last few years -- leaving many more power lines vulnerable to the tree-bending blizzard.

There’s even a near-perfect model of how Connecticut Light and Power could have done the job better. Norwich, Conn., a city of 40,000, has owned its own electric utility, as well as those for sewage, gas and water, for 107 years. Norwich Public Utilities’ customers pay, on average, a bit less than Connecticut Light and Power’s. Yet after this past weekend’s snow dump, power was out for only about 450 of its 22,000 customers — and for no more than an hour. As of Thursday morning, nearly half a million Connecticut Light and Power customers were still waiting for the lights to go on.

That’s not luck, either. After Irene hit, just 13 percent of the city’s customers lost their power for more than a day. Within three days, the whole of Norwich had been restored. It took more than a week for Connecticut Light and Power to fully restore power.

To reiterate, the publicly owned system is cheaper, more reliable, and responds more quickly in emergencies. Sounds like efficiency.

That makes it seem odd that Gov. Dannel P. Malloy has tended to appear alongside Connecticut Light and Power’s Mr. Butler and to support the utility, even though far more customers lost power than should have and restoration proceeded too slowly. There’s solid numerical evidence to justify Mr. Malloy’s berating Connecticut Light and Power and calling for Mr. Butler’s head on behalf of the citizens of his state.

And yet, we see the exact same response from elected officials in the face of a less efficient private sector -- they blindly embrace the private sector, pretending we have no other options.

Connecticut Light and Power Logo

In contrast to Connecticut Light and Power, Norwich’s electric unit last year increased operations and maintenance spending by 11 percent, to $2.9 million. Put another way, in 2010 Norwich allocated about $132 a customer to this line item in its accounts. Connecticut Light and Power reported maintenance, unadjusted for deferred expenses, of $96.5 million, or around $78 per client.

Well, that is curious. The publicly owned utility is able to charge less for power while spending more per ratepayer. And we know that more money from the local utility stays in the community whereas the absentee-owned companies result in fund flight.

It helps that the Norwich utilities are not slaves to the profit motive — though they hand 10 percent of gross revenue to the city.

Whoops! There goes the whole "they have an advantage because they don't pay taxes BS argument...

Last year, before paying this slice to the city, the electricity division made just a 3.6 percent operating profit margin on its $52.3 million of revenue. The Connecticut Light and Power division of Northeast, meanwhile, booked $3 billion of revenue last year and reported an operating margin nearly five times the size of Norwich’s. But it surely also helps that Norwich Public Utilities’ general manager, 12 linemen and five commissioners live in the community, drive the local roads, see the overhanging branches and bump into their customers at the Norwichtown Mall. That’s a rare kind of accountability.

It shouldn't be a "rare" kind of accountability if we recognized the limits of where the private sector excels and encouraged it to "tend to its knitting" as my grandma says.

Photo, courtesy of autowitch on flickr.