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Kentucky Resources Council, PO Box 1070, Frankfort, KY 40602 Phone [502] 875-2428

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PO Box 1070, Frankfort, KY 40602  Phone 502.875.2428, Fax 502.875.2845

Senate Bill 12 to become new vehicle for AT&T phone deregulation bill  Posted: March 9, 2012

DEREGULATION OF BASIC TELEPHONE SERVICE MAY HURT RURAL, FIXED – AND LOW-INCOME KENTUCKIANS AND ELDERS

AT&T are advocating the complete deregulation of basic telephone service under Senate Bill 135. Gone by mid-2013 would be any obligation on the part of AT&T, Windstream or Cincinnati Bell to provide stand-alone basic telephone service to all persons in the geographic area served by that utility.

In 2006, AT&T and others successfully lobbied the General Assembly to allow telephone companies to “elect” to deregulate all services other than basic telephone service. In requiring that access to basic telephone service continue to be regulated, the General Assembly recognized that basic telephone service is, for many Kentuckians, an essential service. While AT&T may believe, as it told the FCC, that “plain-old telephone service” a “relic[] of a by-gone era,” basic wireline service remains a lifeline for many Kentuckians who use their service to convey medical monitoring information, for smoke and security alarms, and for voice service. Basic local service is more than just “voice” service – it includes, by law, unlimited local exchange calling, 911 service, directory and operator assistance, and the ability to connect with other carriers.

Access to broadband and cellular communication services is taken for granted in major urban areas, yet for many residents of the 3rd poorest state in our nation, such access is limited, due to location, to limited income, or both.

While the op-ed from the AT&T Kentucky representative stated that Senate Bill 135 is “not about abandonment or discontinuing service,” as written, there would be no assurance and no legal obligation after June 30, 2013 for AT&T, Windstream or Cincinnati Bell to continue to offer stand-alone basic phone service to any existing or new customer. Ending the “provider of last resort” duty means that the companies could pick and choose those to whom they want to provide future service, and whether they want to continue to provide basic service as a “stand-alone” option.

Even if the June 30, 2013 deadline were removed, allowing AT&T, Windstream, and Cincinnati Bell to cease acting as “provider of last resort” merely because another service provider offers a “voice” service (and the other provider can be an affiliate) does not assure that there is effective competition that will assure access to voice service and other basic exchange services that are functionally equivalent, competitively priced, and comparable in quality and range to current basic services. There are at least two providers of service in every area of the Commonwealth today, though effective competition for all basic services is hardly universal.

Absent the assurance that, before an incumbent telephone company is relieved of the obligation to offer stand-alone basic service under regulations that guarantee nondiscriminatory access, the Public Service Commission finds that sufficient competition and access to the full array of basic services from other carriers on a stand-alone basis is available, low- and fixed-income Kentuckians and those who it is more costly to serve, will not be adequately protected in a deregulated marketplace. A company that no longer has an “obligation to serve” all customers with a stand-alone basic exchange service could refuse to serve new customers or could discontinue offering basic service on a stand-alone basis to existing customers in order to focus on the more profitable data services and on customers who want higher-end products and services.

The Public Service Commission must have the power to decide whether to let a phone company “off the hook” for providing basic telephone service, and to reimpose the “provider of last resort” duty where competition ceases to offer options that are functionally equivalent, competitively priced, and comparable in quality to that currently provided by the incumbent telephone company. Basic telephone service must continue to be available for those who need it on a stand-alone basis.

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