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Ohioans could pay more for worse phone service


MARCH 12, 2010

Ohioans could pay more for worse phone service

The following guest column appeared in the March 12, 2010 edition of the Dayton Daily News (DDN). The commentary was written by Ellis Jacobs, a senior attorney at Advocates for Basic Legal Equality in Dayton who often represents clients in telecommunications matters. Read below, or view on the DDN Web site.

As if households in Ohio aren’t under enough financial stress, now the Ohio House and Senate are considering legislation that could make it harder to pay monthly home telephone bills.

If passed, the legislation would deregulate Ohio’s land-line telephone companies, allow residential rates to increase and weaken consumer protections and service quality.
 

MARCH 12, 2010

Ohioans could pay more for worse phone service

The following guest column appeared in the March 12, 2010 edition of the Dayton Daily News (DDN). The commentary was written by Ellis Jacobs, a senior attorney at Advocates for Basic Legal Equality in Dayton who often represents clients in telecommunications matters. Read below, or view on the DDN Web site.

As if households in Ohio aren’t under enough financial stress, now the Ohio House and Senate are considering legislation that could make it harder to pay monthly home telephone bills.

If passed, the legislation would deregulate Ohio’s land-line telephone companies, allow residential rates to increase and weaken consumer protections and service quality.

Even with the spread of wireless telephones, many Ohioans still rely on traditional land-line home telephone service as their main or sole source of telecommunications. They rely on it because it provides unlimited minutes of use at a low, fixed, monthly rate.

They don’t just use it to call friends, family and neighbors, but for emergency services such as 911, medical alert buttons and alarm services. They need their land-line phone service to be reliable and affordable.

Here are some concerns about how telephone service in Ohio would be affected by this proposed law:

  • Telephone companies would be able to raise their monthly rates for basic telephone service by $1.25 every year, even for those on the low-income Lifeline discount program. This could mean rate increases of up to 20-40 percent over the next few years.
  • Telephone companies would be allowed to take up to three days to restore service outages, up from a current one-day rule. Companies have been able to meet the one-day requirement for many years. For those who rely on their home telephone, being without service for three days is unacceptable.
  • The proposed legislation scales back educational efforts for the Lifeline program, which could prevent customers who need the help that this program offers, from knowing about it.
  • Customers who have a package or bundle of telecommunication services — the majority of land-line telephone consumers in Ohio — will receive even fewer protections than those with just basic service. They would have only limited protections from “unfair or deceptive” practices. They would not be guaranteed access to 911 emergency services if disconnected for nonpayment, as they presently are. This could put vulnerable customers’ health and safety at risk.

The big phone companies argue that the legislature should allow them to raise rates and reduce service because they face competition. The irony of this should not be missed. Competition, after all, is supposed to lower rates and improve service.

The other argument I’ve heard for this legislation is that the phone companies are hurting financially and that if they get this deregulation, they will increase investment in Ohio. Neither part of this claim stands up to the facts.

AT&T Ohio averaged 11.4 percent return on equity during the past five years. Verizon averaged 15.8 percent over the same period. We should all be hurting like that.

Moreover, the history of telecommunication deregulation in Ohio shows that when a service or product is deregulated, not only does the price of it go up, but investment and jobs in Ohio go down.

From 2001 to 2008, during a period of deregulation, AT&T Ohio reduced its employee count by 40 percent. Verizon reduced its by 26 percent.

Ask yourself, if a company can take three days instead of one to repair a line, will it employ more or fewer people in those types of jobs?

Contact your state legislators. Tell them to defeat House Bill 276 and Senate Bill 162. This legislation is a bad deal for Ohio. It gives telephone companies all the benefits while leaving consumers empty-handed.