Phone Service For Everyone?

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 Wisconsin already have repealed 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 

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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