Phone Service For All,
No Matter What Kind
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This opinion piece originally
appeared at Reuters.com
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The guarantee of landline telephone
service at almost any address,
a legal
right many Americans may not even
know they have, is quietly being
legislated away in our U.S. state capitals.
AT&T and Verizon, the dominant
telephone companies, want to
end
their 99-year-old universal service
obligation known as “provider of
last
resort.” They say universal
landline service is a costly and unfair
anachronism
that is no longer
justified because of a competitive
market for voice services.
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The new rules AT&T and Verizon
drafted would enhance profits
by
letting them serve only the customers
they want. Their focus, and that of
smaller phone companies that have
the same universal service obligation,
is on
well-populated areas where
people can afford profitable packages
that combine
telephone, Internet
and cable television.
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Sprint, T-Mobile and the cell phone
divisions of AT&T and
Verizon are
not subject to universal service and
can serve only those areas
they
find profitable. Unless the new
rules are written very carefully,
millions of
people, urban and rural,
will lose basic telephone service or
be forced to pay
much more for calls.
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Florida, North Carolina, Texas and
Wisconsin already have repealed
universal service obligations. No one
has been cut off yet, but once almost
every state has ended universal service
I am sure we will see parts of the
landline system shut down.
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Years of subtle incremental legal
changes have brought the
telephone
companies within sight of ending
universal service, which began in
1913 when AT&T President Thomas
Vail promised “one system, one policy,
universal service” in return for keeping
Ma Bell’s monopoly.
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AT&T wants universal service obligations
to end wherever two
or more voice
services are available, said Joel Lubin,
AT&T’s public policy
vice president.
Verizon promotes a similar approach.
State capitals are seeing intense
lobbying to end universal
service
obligations but with little public
awareness due to the dwindling
ranks
of statehouse reporters.
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The Utility Rate Network, a consumer
advocate group, identified
120 AT&T
lobbyists in Sacramento, one per
California lawmaker. Mary Pat
Regan,
president of AT&T Kentucky, told me
she has 36 lobbyists in that
state
working on the company’s bill to end
universal landline service.
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People whose landline service ends
would have three options.
First would be a cell phone, a reasonable substitute in many areas. But cell
phones do not work in Appalachian
valleys and many rural expanses.
Cell phones cost at least $25 for
limited minutes, while lifeline services,
which the companies
offer to low-income
people – start at $2 and, with unlimited
local calls, at
about $10.
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Second would be Internet calling. That
requires broadband Internet
service.
Verizon charges $49.99, plus additional
charges by unregulated calling
companies like Vonage, whose rates
start at $25.99. On top of this $75
expense
would be taxes and the cost
of buying and maintaining a computer,
a device
alien to many older and poor
Americans.
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Third would be satellite service.
Thomas Hazlett, a George Mason
University economist who studies
rural
phone costs, tells me satellite service
is “the way to go for service in
outlying
areas.” Maybe, but it requires a
computer, costs at least $29.95 and
tens of thousands of users have
complained about unauthorized
charges and
connection problems.
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AT&T and Verizon also want to end
state authority to resolve
customer
complaints, saying the market will
punish bad behavior. Tell that to
Stefanie Brand.Brand is New Jersey’s
ratepayer advocate whose experience
trying
to get another kind of service,
FiOS – demonstrates what happens
when market
forces are left to punish
behavior, she said. Residents of her
apartment
building wanted to get wired
for the fiber optic service (FiOS) in 2008.
Residents said, “We want to see your
plans before you start drilling holes, and
Verizon said, ‘We will drill where we want
or else, so we’re walking,’ and they
did,”
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Brand told me that Verizon confirmed
that because of the disagreement
that because of the disagreement
Brand’s building is not wired. And
there’s nothing Brand can do about it.
Verizon reminded me the state Board
of Public Utilities no longer has authority
to resolve complaints over FiOS.
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Market forces cannot discipline this
kind of one-sided power.Verizon says
that New Jersey requires it to wire
only
70 cities. What will happen to the
elderly and disadvantaged with no
place
to appeal for help when telephone
service is degraded, denied or cut off?
Without universal landline service,
many poor and rural people
will lose
connectedness to family and work,
while businesses serving them will
lose
sales and their servicing costs will rise.
Taxpayers will take a hit when the sick,
disabled and elderly
cannot summon
help immediately because they lack
phone service. Hours of delay
after,
say, a stroke can turn a modest
hospital bill into a huge expense for
Medicare, Medicaid or the Veterans
Administration. Some people without
phones
will die unnecessarily.
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New technology means telephone
services will change, just as
internal
combustion engines replaced the
horse-and-cart with automobiles.
We
don’t want regulations requiring
the equivalent of a buggy whip in
every car
trunk.
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However, we also should not lose
sight of the benefits of guaranteed
access to affordable basic telephone
service. The law should not force people
to buy costly services they do not need.
Nor should we forget that customers
paid for the landline
telephone system,
including many billions of dollars in rate
increases over the
past two decades
that helped AT&T and Verizon develop
their cellular
systems. If we lose
universal service, I doubt we will ever
get it back.
Let’s get a balanced
policy rather than quietly rewriting
laws to benefit one
industry.
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