Pa. bill would deregulate phone companies

Posted: November 01, 2013

As wireless phones continue to eclipse landlines, does traditional home phone service still merit the kind of special oversight provided by agencies such as Pennsylvania's Public Utility Commission and New Jersey's Board of Public Utilities?

Descendants of the old Ma Bell monopoly, led by Verizon and AT&T, say no, and have been pushing in state capitals for a get-out-of-regulation pass. Their effort failed last year in New Jersey, but a similar proposal, House Bill 1608, is on the table in Harrisburg, with a hearing set for next month.

The companies say deregulation would allow them to compete more aggressively with newcomers using different technologies - wireless, voice-over-Internet, and cable phone service - that are largely free of traditional oversight.

"The bill would move Pennsylvania toward a level playing field," said its chief sponsor, State Rep. Warren Kampf (R., Chester). Kampf says his bill, which has about 60 cosponsors, is similar to laws enacted in 20 other states.

Critics of the proposal, led by consumer organizations such as AARP, say it is at best premature in a state whose rural expanses often lack or have spotty wireless coverage. In cities and suburban areas, they argue, the bill would allow phone companies to easily escape the "provider-of-last-resort" obligation that has helped Pennsylvania have near-universal phone service.

And they say that when something goes wrong, the bill would leave consumers without a crucial avenue of complaint - a point stressed last month by PUC Commissioner James H. Cawley in an appearance on Pennsylvania Cable Network.

Cawley said that by allowing phone companies to escape PUC oversight by declaring a phone-exchange area competitive, the legislation would throw "residential customers to the wolves."

To declare an exchange competitive, a landline company would have to certify that the area was also served by at least one wireless carrier and one Internet provider - a standard critics call inadequate.

"There's a reason there's been a public utility commission for 100 years," Cawley says. He says the commission and its Bureau of Consumer Services serve as a buffer between powerful utilities and their customers.

Kampf dismisses concerns that consumers would suffer without the PUC to handle complaints.

"There's the marketplace and complaints to the company - that is the avenue that consumers have," Kampf says, arguing that competition is the chief protection, for instance, for those who have problems with pay TV.

"Complaints can be made to the individual provider of the television service. For many people, if you're not satisfied with that, you can switch to another provider. We as a society have said that's OK," Kampf says.

Verizon's Lee Gierczynski offers a similar argument. "They can direct their complaints to the Federal Communications Commission, to the attorney general, or to the Better Business Bureau, just like consumers do for other services and products across the state," he says.

Cawley says the FCC isn't designed or staffed to address individual problems, as the PUC does when something goes wrong. "They are not equipped - and they'll be the first to tell you - to handle large-scale customer complaints," he says.

The two sides agree on at least one thing: the dramatic shift in phone use, driven partly by the emergence of competing landline offerings such as cable companies' "triple play" deals and partly by the spread of cellphones and "cord cutting."

In cities, where wireless is most reliable, it's hard to find a twenty-something who owns a landline. It was no surprise when the Centers for Disease Control and Prevention reported that by the end of last year, nearly two in five U.S. households relied entirely on wireless phone service.

No question, the shift has been dramatic. But are we really ready to end state government's capacity to intervene when something goes wrong?


jgelles@phillynews.com

215-854-2776 @jeffgelles

www.inquirer.com/consumer

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