Legislatures in Kentucky and Colorado Debate Bills to Ease COLR Requirements

Nineteen of the 21 states where AT&T is the main provider have passed laws weakening or eliminating regulations guiding the telco’s desired shift from landline to IP, Lichtenberg said in an email. Lichtenberg is not counting Connecticut, where AT&T is selling its operations to Frontier Communications (CD March 17 p2). A 20th state could be Kentucky, where an AT&T-supported bill would remove COLR obligations to provide landlines in more populous areas, Lichtenberg said. Its passage would leave Oklahoma, which also is considering legislation, as the only AT&T state that has not yet passed a law removing state oversight over retail telecom, she said. Even then, AT&T is already essentially deregulated in the state, after it was ruled “competitive” in 2005, effectively removing much of the regulations to which it was subject, she said. HB-386 (http://tinyurl.com/q8q8n5s), which would end Oklahoma Corporation Commission oversight of IP, was introduced Feb. 3.

Deregulation affects more than AT&T, which had no comment on deregulation across states generally. A Colorado measure would specify that IP is not subject to state regulations, said Rep. Angela Williams, a Democrat who plans to sponsor the bill. The bill is expected to be introduced this week and would also create a two-year transition period that could excuse COLR obligations in areas deemed competitive, said CenturyLink Regional Vice President-Regulatory and Legislative Affairs Jim Campbell.

On March 13, the Michigan legislature approved another bill, SB-636 (CD Feb 19 p11), which allows providers to end landline service without approval from the Michigan Public Service Commission.

Other States

The debates in Kentucky and Colorado echo those in other states. Telcos have argued that being required to maintain costly and increasingly less-used landlines is an unfair burden that IP doesn’t face, and draws resources away from investments the companies could be making in broadband. Consumer groups including the AARP argue that many customers still rely on landlines and state regulatory authority is still necessary. Deregulation is a major emphasis for the American Legislative Exchange Council. An AT&T spokesman in Kentucky said the bill in that state is not based on ALEC’s model legislation. John Stephenson, director of ALEC’s communications and technology task force, said the bills might contain concepts pushed by ALEC but he hadn’t read either bill.

Kentucky SB-99 (http://tinyurl.com/o43l422), sponsored by Sen. Paul Hornback, a Republican, would allow phone companies to no longer offer landline in exchanges with more than 15,000 households, said an AT&T spokesman. The bill passed the Senate Jan. 30 and is awaiting a vote on the House floor.

"Every dollar that providers have to invest in older technology is money that cannot be invested in the new technology that customers are demanding,” an AT&T spokesman said of the Kentucky bill. The company has not said how much more it would invest in broadband in the state if the measure passed, the spokesman said. AT&T is investing about twice as much in broadband in deregulated Indiana as in Kentucky, he said. “There’s a significant decline in those who use landlines. [Broadband has become] the preferred method of communication.” Customers in the larger exchanges have a choice of providers, allowing them to vote with their feet if they're dissatisfied with service, making regulation unnecessary, he said.

In smaller exchanges, providers would be required to continue providing landlines for existing customers. Customers who give up their landline in favor of VoIP or another technology would have 90 days to switch back or forever lose rights to have landline. Providers in the smaller exchanges wouldn’t be required to provide landline to new customers.

Confusion and Concern

The bill has caused confusion and concern, say critics, who said it would present a risk of leaving “low-income and fixed-income Kentuckians without access to basic phone service, including 911-emergency service.” They might lose the service “simply because those communities reside in exchanges with over 15,000 housing units, not because those communities are experiencing effective competition,” said AARP Kentucky President James Kimbrough in written testimony to the Senate Standing Committee on Economic Development, Tourism and Labor on Jan. 30.

At a meeting of the House Economic Development Committee on March 13, Rep. Wilson Stone (D) asked an AT&T representative what would happen if someone wanted to move into a vacant house on his mother’s farm where landline had been cut off. Stone wanted to know if the new tenant could get landline, according to a letter from Tom FitzGerald, director of the environmental group Kentucky Resources Council, to the committee March 14. He said an AT&T representative at the hearing was incorrect in saying that the tenant could get service. “The obligation to provide basic local exchange service through a landline that has been dormant could be read to be limited to those landlines that were initially installed ’to provide basic local exchange service’ and no other features,” FitzGerald’s letter said. An AT&T spokesman said in an interview that the landline would be reconnected because it hadn’t been disconnected after the law went into effect.

In Colorado, Williams said that under her proposal, IP wouldn’t be subject to state authority. It would set the stage for incumbents to be excused from their COLR obligations in two years if the Public Utilities Commission deems an area “competitive,” said Campbell, who has been involved in the negotiations over drafting the bill. In competitive areas, the PUC wouldn’t have regulatory authority over areas like service quality. In areas not deemed competitive, and where the PUC provides support, providers would still be subject to COLR obligations, and could meet the obligation by providing voice service through any technology, not just traditional landlines, Campbell said. The PUC would retain some regulatory authority in those noncompetitive areas. Incumbents statewide would continue to have the obligation for the next two years, he said.

Campbell said many former landline customers have switched to other technologies, “and the world hasn’t come to an end.” As more CenturyLink customers have transitioned to IP, rates haven’t spiked and the company received only about 100 service-related complaints last year from its nearly 1 million customers, he said.

AARP Colorado will oppose the measure, fearing those who still want a landline will not be able to get one. “Phones are everything to people -- it’s about safety,” said AARP Colorado Associate State Director for Advocacy Kelli Fritts in an interview. “We don’t need to pass a new law,” said Bill Levis, an AARP volunteer legislative advocate and former director of the Colorado Office of Consumer Counsel. The IP transition “is happening in Colorado,” he said. “There are 700,000 VoIP lines. Nothing is being stymied.”(kmurakami@warren-news.com)