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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 Economic Development Committee to Hear SB 88 - AT&Ts Effort to End Right To Basic Local Phone Service, On Monday February 11  Posted: February 8, 2013

Friday, February 08, 2013

Dear Senator:

I’m writing to you in advance of Monday’s special-call meeting of the Senate Economic Development, Tourism, and Labor Committee, to voice my grave concerns with the effects of Senate Bill 88. Allowing AT&T, Windstream, and Cincinnati Bell to end their obligation to be “carriers of last resort” providing reliable, stand-alone basic local phone service, is not in the best interests of Kentuckians.

To be sure, the world of telecommunications has been changing, but the public expectation that reliable, affordable, basic phone service will be available during this digital transition should not. Access to basic phone service is not a privilege, but is a right secured under current Kentucky law. The “incumbent” phone companies have profited in a regulated environment for decades, with a guaranteed profit on their investments in the “public switched telephone network” in return for offering basic service to all customers in a nondiscriminatory manner. Technology changes, but the principles of our nation’s telecommunications law remain as vital now as when first made law - Service to All Americans, Interconnection and Competition, Consumer Protection, Network Reliability, and Public Safety.

Senate Bill 88, drafted by AT&T, would:

• weaken consumer protection, by eliminating the regulatory power of the Public Service Commission over the reliability of basic local service;

• allow AT&T, Windstream and Cincinnati Bell to substitute less reliable wireless voice service for highly reliable landline basic phone service;

• end the right to stand-alone basic phone service; and

• lessen public safety by allowing basic landline service to be replaced by wireless service that may not support home alarm systems.

In 2006, AT&T and others successfully lobbied the General Assembly to allow telephone companies to “elect” to deregulate all of their phone offerings other than basic telephone service. In requiring that access to basic telephone service continue to be regulated, the General Assembly recognized that stand-alone basic telephone service is, for many Kentuckians, an essential service. AT&T may believe, as it told the FCC in 2009, that “plain-old telephone service” is a “relic of a by-gone era,” yet basic landline telephone service remains a lifeline for many Kentuckians to convey medical monitoring information, smoke and security alarms, and for reliable voice service. Basic local service is more than just “voice” service – it includes, by state law, reliable unlimited local exchange calling, 911 service, directory and operator assistance, and the ability to connect with other carriers.

What does the bill do?

• AT&T, Windstream, and Cincinnati Bell could immediately stop offering stand-alone basic local telephone service to any new residences, and to all existing customers in exchanges with more than 5,000 housing units.

• In exchanges with less than 5,000 housing units, those companies could immediately cease providing stand-alone landline basic phone service if they offer an “alternative voice service” (such as wireless “voice” service) or they could petition the state Public Service Commission to be relieved of the obligation to provide basic telephone service by meeting certain criteria regarding other providers of voice service in the area.

• “Voice service” can be provided through “any technology or service arrangement” that includes voice grade access, minutes of use for local service provided at no additional charge to end users, and access to the emergency services such as 911. Basic local service would no longer be required to be offered on a stand-alone basis, and could be “bundled” with other services that the customer might not need, nor be able to afford.

• The Public Service Commission would lose all regulatory authority to mandate levels of reliability and service, and could only “assist” in the resolution of consumer complaints. The PSC would also lose power to investigate and order the resolution of broadband complaints.

Nothing in Senate Bill 88 would require AT&T to seek PSC approval prior to ending the offering of stand-alone landline phone service in exchanges where it offers wireless or other “alternative” voice service. There is no requirement that AT&T, Windstream or Cincinnati Bell demonstrate the “alternative” wireless service is of comparable reliability and consistent signal quality to the current wireline service. The mere existence of a wireless “alternative voice service” provider that can be an affiliate, does not assure access for all customers to voice and other basic exchange services that are functionally equivalent, competitively priced, and comparable in signal quality, reliability, and range.

The AT&T website disclaimer for its “Wireless Home Phone device” speaks volumes when it states that: “[A]T&T does not represent that the Wireless Home Phone service will be equivalent to landline phone services…Wireless Home Phone may not support your fax machine, alarm services, dial-up internet service or credit card machine.” Regarding 911 service, the AT&T disclaimer notes “911 calls are routed based on the wireless network’s automatic location technology, but you may have to provide your home address to emergency responders. AT&T recommends that you always have an alternative means of accessing 911 service from your home or business during a power or network outage.”

Before Kentucky allows these utilities to cease offering stand-alone basic phone service, the PSC must be empowered to determine whether sufficient competition in the provision of the full array of reliable basic phone services is available from other carriers on a stand-alone basis in a phone exchange, and that basic reliable phone service will remain available to low- and fixed-income Kentuckians and those who it is more costly to serve because of their location. Otherwise, these customers will not be adequately protected in a deregulated marketplace.

AT&T has asked the Federal Communications Commission to set a date where its obligation to maintain the wired public switched telephone network (referred to as the “legacy” network) would be eliminated. As the internet-protocol based communications network expands, the FCC will determine, on a national level, the obligations of these incumbent telephone utilities to the customers in their service areas, and their obligations to provide wholesale access to other carriers and to allow interconnection with other carriers. Ending the obligation in Kentucky to provide reliable stand-alone basic phone service under state regulatory oversight, without any assurance comparable services will be available in a deregulated marketplace for those who are most in need of and least able to afford such services, is not in the public’s interest. The digital divide that already exists in communication access between urban and rural areas could become wider.

I hope that you will vote no on Senate Bill 88, in order to assure that reliable basic telephone service must continue to be available for those who need it on a stand-alone basis during this time of transition. Thank you.


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