OPLC Urges Ohioans to Speak Out on SB 271 – Telephone Deregulation

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OPLC Senior Attorney Mike Smalz sent a letter to several Ohio newspapers last week urging them to speak out and editorialize against SB 271, a bill that would deregulate telephone providers, releasing them from any obligation to provide landline phone service to all Ohioans. This move could leave many Ohioans with NO reliable telephone service.

The Highland County Press printed Mike’s letter in full here.

As representatives of rural, lower-income, and elderly Ohioans, we would like to encourage you to editorialize against Senate Bill 271 (SB 271).

This bill would allow some of Ohio’s landline telephone companies to withdraw their basic telephone services from customers. Basic Telephone Service is what consumers know as “plain old telephone service (POTS)”, with no frills and unlimited local calling for one flat charge.

The guarantee of landline telephone service to every Ohio home is a legal right many of us never even thought to question. But AT&T and Ohio’s landline telephone association are lobbying to get rid of the age-old consumer protection known as the “carrier of last resort.”

Telephone communication is a basic necessity, allowing Ohioans to maintain social contact, preserve health and safety, and gain assistance in an emergency. And while some Ohioans have a preference for landlines, many still have no other realistic choices.

Landlines from the traditional phone company are still the only option for affordable and reliable telephone service for many Ohioans. In fact, three-quarters of all Ohioans still have a landline telephone.

SB 271 would allow some telephone companies to start withdrawing their basic landline telephone service, or charge any price for their services, with very little notice to the consumers so long as they have met a showing of limited telecommunications competition.

The deeply flawed “competitive test” only requires a utility to show that there are two other companies offering some telecommunications service at a single point within each of their exchanges.

The test does not require these alternatives to be available to all customers, nor does it require the alternatives to be cost-competitive or reliable. So essentially, if AT&T and Verizon Wireless claim there is cellular service in your area, your area likely would meet the state’s competitive test.

AT&T, Cincinnati Bell, and two other smaller companies have already met this test in their entire Ohio Service Territory (highlighted in the pink map in the fact sheet from the Office of the Ohio Consumers’ Counsel).

If SB 271 passes, the landline telephone customers in those areas will be in danger of losing their basic landline service.

The telephone utilities in the other areas of Ohio would be able to start withdrawing telephone services after having met this weak “competitive” test in their exchanges, too. Many of Ohio’s urban areas may have good cell phone service and this may be an acceptable, although more expensive and less reliable, alternative for some customers. However, other areas like rural Appalachia have spotty cell coverage at best—and AT&T would be allowed to hang up on those customers, too.

There is also an affordability concern with the proposed bill. SB 271 is essentially a back-door rate increase for telephone companies allowing them to no longer offer the most affordable telephone service option.

SB 271 would enable the phone companies to force Ohioans who rely on basic local telephone service (which is the cheapest landline option) to purchase more expensive bundles or packages of services. And these more expensive services are not subject to any of the consumer protections that Ohio law now provides to assure reliable and quality service.

In addition, Ohio’s telephone laws were just updated last year. The 2010 overhaul of Ohio’s telephone regulations went into full effect in 2011 through a 100+-page bill that deregulated major aspects of the telephone industry and allowed some of Ohio’s telephone companies to increase basic telephone rates by $1.25 per month each year—in perpetuity. Throughout the debate on that bill, the telephone industry claimed that they were leaving some important consumer protections in place—and those are the very consumer protections that SB 271 would eliminate.

The ink has barely dried on their last bill, and they are back asking for more. SB 271 bill scraps the $1.25 rate increase and replaces it with unlimited rate increases with fully deregulated telephone services.

The 2010 telephone law also required a Select Committee to form to review the impact of that Bill on consumers.

This review would theoretically hold the utilities accountable for the promises of new jobs and new investments they would make in return for further deregulation. This committee has not even formed yet, let alone issued a report.

Even worse, AT&T’s own testimony to the legislature on the respective telephone bills shows that they have reduced their Ohio workforce by about 3,000 people since the General Assembly was debating the 2010 law.

However, AT&T has still found the funds to hire 21 lobbyists to fight for this bill. Including AT&T, telephone utilities, and their associations, there are a total of at least 34 lobbyists pushing Ohio legislators to cut the cord on their constituents.

Lawmakers in other states—Kentucky, Colorado, and New Jersey—recognized the burden that higher, unaffordable rates posed for vulnerable segments of their constituents, and they soundly rejected this pro-utility legislation.

We encourage you to advocate that the General Assembly cut the cord on SB 271—not allow the phone companies to cut the cord to Ohio’s landline telephone customers.

Contributing and supporting authors:

Joseph V. Maskovyak, Appalachian Peace and Justice Network;
Ellis Jacobs, Edgemont Neighborhood Coalition (Dayton);
Michael A. Walters, Pro Seniors, Inc.;
Edyael Casaperalta, Center for Rural Strategies;
Noel Morgan, Legal Aid Society of Southwest Ohio
Representing Communities United for Action.