Lawmakers to make call to cut phone regulations
By JIM SAUNDERS
Tallahassee Bureau Chief
TALLAHASSEE — Ma Bell is long gone.
And with millions of Floridians turning to cell phones and other technology to make calls, state lawmakers are considering proposals to reduce regulations on telephone companies such as AT&T and Embarq.
The bills, which are moving through the House and Senate, would relax or eliminate state oversight of rates and customer service for many residents who use land-line phones.
Marshall Criser III, president of AT&T Florida, said the bills do not raise rates. He and other supporters say reducing regulations will help boost competition in the industry — and ultimately will be good for consumers.
"Historically, when we’ve done real deregulation, costs have always gone down," said Sen. Carey Baker, a Eustis Republican whose district includes part of western Volusia County.
But the senior advocacy group AARP is fighting the proposals, arguing they could lead to future rate increases and leave consumers with no place to turn with complaints about service issues.
AARP said older residents are more likely to use land-line service than younger consumers who often rely on cell phones as their primary phone service.
"We don’t see this as pro-consumer," AARP lobbyist Leslie Spencer said.
The Senate General Government Appropriations Committee, which Baker leads, approved the Senate version of the bill Monday in a 3-2 vote. Two House panels have approved a similar bill.
Lawmakers during the past 15 years have repeatedly debated proposals aimed at reshaping the old monopolistic phone industry. In 2003, for example, a major controversy surrounded a measure that included steps to increase competition and allowed rate increases for basic phone service.
This year’s debate comes amid rapid changes in the industry. A state report indicates the number of traditional phone lines in Florida homes and businesses dropped from 12 million in 2001 to 9.3 million in December 2007 — a period in which wireless technology made large advances.
An underlying issue in the debate is that the state Public Service Commission does not regulate cell phones or telephone services that are offered by cable television companies. The state, however, continues to regulate more-traditional companies such as AT&T and Embarq.
Rep. Will Weatherford, a Wesley Chapel Republican who is sponsoring the House version of the bill, said the state has a regulatory system that is "based off a 1960s model."
Under the bills, the state would continue regulating rates and customer service for people who buy bare-bones basic service.
But people who buy additional features, such as caller identification or call waiting, would be considered "nonbasic" customers who would not be subject to those regulations.
Annual increases in costs of basic service are limited to an amount 1 percent less than the inflation rate. Companies have long been able to increase costs of additional features by as much as 20 percent a year.
Under the bills, that 20 percent would drop to 10 percent. But the potential 10 percent increases would apply more broadly because many customers would be considered "nonbasic."
"By changing those definitions, you’re opening up a wider class of customers to rate increases," said Spencer, the AARP lobbyist.
Supporters dismiss the idea that the proposals would lead to large rate hikes.
Criser said AT&T already sells service packages at prices that are far below what it could charge customers who want additional features. He said competition and consumers drive prices and the quality of customer service.
"When the customer has a choice, the rules are irrelevant," Criser said in an interview Monday.
Nevertheless, bill sponsors have tried to reduce opposition by including moves such as expanding eligibility for the Lifeline program, which provides heavily subsidized phone service to low-income people.
But Spencer, whose group has long supported Lifeline, said the proposal to expand Lifeline is a "smoke screen" to gain support for the deregulation effort.
"I think they are two completely different issues," Spencer said.