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

Top Ten Reasons Why AT&Ts SB 88 Is Bad For Kentucky  Posted: February 22, 2013


Top Ten Reasons Why AT&Ts SB 88 Is Bad News For Kentucky

10. The “carrier of last resort” duty would be ended. No new residential customer or new home would have the right to basic stand-alone phone service (voice, 411, 911, operator assistance, interconnection with other carriers, and unlimited local dialing) from three incumbent carriers – AT&T, Windstream, and Cincinnati Bell. Kentuckians would lose the right of nondiscriminatory access to basic local phone service as a stand-alone option.

9. The public would lose the assurance of basic phone service reliability, since the bill strips the Public Service Commission (PSC) of all regulatory power to demand that basic phone service be maintained in a reliable manner. The PSC would also lose jurisdiction over broadband complaints. AT&T claims that it is “competition” that will keep their delivery of phone service reliable, but effective competition doesn’t exist in many areas of the state. When offered an alternative bill that would allow them to cease being carriers of last resort if the Public Service Commission found that sufficient competition existed to assure the protection of the public, they demurred.

8. In areas with over 5,000 households, these companies would no longer be required to offer stand-alone basic phone service, and could cease offering it on a nondiscriminatory basis. With the elimination of the mandate to provide basic phone service to all persons within their service area who can pay for that service, “redlining” of low-income neighborhoods or customers that aren’t as profitable as customers or areas using more high-end services, could occur. Customers seeking basic service could be required to purchase other services that they may not want, need, or be able to afford, as condition of receiving the basic service that is now required to be offered as a stand-alone option.

7. In areas with less than 5,000 households, the companies can cease offering landline stand-alone basic phone service and can require that existing customers who continue to want that service use their affiliate’s wireless service. Yet AT&T admits in their “Wireless Customer Agreement” that their wireless services are not equivalent to landline service, including the possibility of the wireless service not supporting medical monitoring, home alarm services, dial-up internet, and fax machines.

6. Substituting wireless services may make 911 less reliable. According to AT&Ts disclaimer “We cannot assure you that if you place a 911 call you will be found.” Wireline 911 service is more reliable when the power goes out, because unlike wireless, the wireline carries both voice and voltage, and landlines have backup power generation requirements that cell towers do not. Legislators in western and eastern Kentucky remember all too well what phone service worked when the storms that knocked out electricity in those regions.

5. AT&T, Windstream, and Cincinnati Bell could also file a petition with the PSC, which must approve it, to end stand-alone basic local service if there is a broadband provider "capable" of providing voice service or there is another unaffiliated provider in the exchange offering voice service (which again need not be stand-alone).

4. AT&T claims that deregulation is needed for a “level playing field,” and that relieving them of the duty to provide basic local exchange service to all who request it is needed if Kentucky is to have a chance at receiving some of the $14 billion in new investments that AT&T announced it would make over a three-year period. AT&T made similar claims in 2006, yet there is no evidence that new jobs and investments (over what would have been spent regardless) ever materialized because of the deregulation of other phone services by the General Assembly. Nor is there any enforceable commitment in the bill or elsewhere that AT&T investments above what would otherwise occur will be made if this last vestige of public protection in basic, essential telecommunications is removed. The only evidence that the proposed deregulation of basic local service has brought jobs to Kentucky, is the 32 lobbyists employed in 2012 and the 23 employed by AT&T so far this session to push SB 88, whose continued employment might actually be in jeopardy if SB 88 passes.

3. The ability of competing local exchange carriers to interconnect with customers of the incumbent utilities may suffer. Disclaimers in AT&T’s wireless home service alert the customer that exceeding “offnet” data, voice, or messaging limits may result in cancelling the service.

2. Allowing AT&T, Windstream, and Cincinnati Bell to move basic phone customers to wireless service in rural and high-cost areas eliminates any incentive to upgrade the rural landline network to provide high-speed broadband access. AT&T claims that maintaining two networks is the problem, but in fact their announced $14 billion in new investment is going both to wireless and AT&T’s 22-state wireline network.

AT&Ts November 2012 petition to the Federal Communications Commission (FCC) makes clear that the goal isn’t to eliminate the physical wireline network, built with ratepayer money that was paid on the assumption that ratepayers would in return benefit from highly reliable phone access through the wireline network. The objective appears instead to be elimination of the publicly-switched telephone network (PSTN) that uses those wirelines; allowing AT&T and the other incumbents to eliminate competition from other carriers that use those lines to offer service choices to customers, by moving to a wireline and wireless internet protocol-based system that AT&T believes should be minimally regulated.

1. The FCC will determine the future of the PSTN, and there is no need for Kentucky to act now to eliminate the right to regulated local phone service before the federal agency acts on the pending petition from AT&T. This bill shuts the door on Kentucky’s ability to mandate continuation of a reliable essential utility service during the transitional period. SB 88 would widen the digital divide between the wealthy and working class, and between the mountains and the Bluegrass, by allowing AT&T, Windstream, and Cincinnati Bell off the hook for providing regulated, reliable, basic local phone service.

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