The Akron Legal News

Phone industry backs bill to remove outdated regulations

TIFFANY L. PARKS
Special to Legal News
Published: February 1, 2012

The president of AT&T Ohio has endorsed a Senate proposal to strip away outdated mandates on local phone providers.

“... This legislation matters to AT&T, broadband deployment, investment, all of our employees and to the state of Ohio,” said Tom Pelto, AT&T Ohio president.

Pelto recently offered testimony in support of Senate Bill 271 before the Senate Energy and Public Utilities committee.

“Telecommunications has changed dramatically in the 133 years we have been doing business in Ohio, especially in the last few,” he said.

“SB 271 is an attempt to further modernize the telecom laws in Ohio and level the playing field in response to rampant competition and the development of new technologies.”

The bill, which was introduced into the legislature in December, is sponsored by Sen. Frank LaRose, R-Akron.

The proposed legislation would permit an incumbent local exchange carrier to withdraw from providing basic landline telephone service, which is referred to in Ohio law as basic local exchange service, if the carrier is a “fully competitive incumbent local exchange carrier.”

Under the measure, at least 90 days notice would have to be given to affected customers and the Public Utilities Commission of Ohio.

“Existing state law still requires capital investments in technologies to support landline service where there continues to be a decline in use, rather than focusing on the technologies of tomorrow,” Pelto said, adding that AT&T has lost nearly 64 percent of its traditional access lines in Ohio since 2000.

“SB 271 is a very narrow, modest proposal. It is short and simple, addressing an issue that was not thoroughly vetted in Senate Bill 162, which passed in 2010.”

The bill would permit a fully competitive ILEC to retire its regulated telecommunications service in Ohio, including basic landline service, on or after Jan. 1, 2014.

“Historically, the carrier-of-last-resort, or COLR, obligation was placed on the ILECs in the monopoly era, when the granting of an exclusive franchise to serve carried with it the obligation to serve all who wanted service in your franchise territory,” Pelto said.

“Even with the advent of competition, and previous legislative reforms, the COLR obligation is still placed on the ILECs in state law and in the PUCO’s rules. It is one of the last vestiges of monopoly telecom regulation.”

Pelto said that in today’s telecommunications marketplace, the COLR obligation has become an “exclusive license to lose money for the ILECs in competitive markets.”

“The COLR obligation forces the expenditure of money and other resources on providing basic local exchange service where there may be no market demand for such services,” he said.

“Money spent to meet this obligation cannot be invested in advanced wireline services or mobile broadband, the networks of the future.”

Pelto called current mandates the “equivalent of burying money that could be used for forward-looking capital investment in coffee cans in the backyard.”

“The future is wireless and that is where we have spent the majority of our capital expenditures over the last several years,” he said. “Ohio has seen increased investments and innovation following previous legislation reforming outdated telecom laws.”

SB 271 would require that notice of a company’s basic landline telephone service withdrawal or its retirement of regulated telecommunications service be provided in a reasonable manner including by bill insert or message, direct mail or electronic means.

“Ohio must stay in line with, or work to move ahead of, other states that are competing for capital investment in this area,” Pelto said.

“SB 271 represents a modest step, intended to bring Ohio into line with other states that have recognized that similar public policy changes can have a dramatic positive impact on the efforts to attract investment, preserve and expand high-tech jobs and to compete in the global economy.”

Vickie Norris, director of state regulatory and legislative affairs for CenturyLink, also testified in support of the bill.

“SB 271 takes the next logical steps in reducing the traditional regulations established during a monopoly regulatory environment that no longer exists for the telecommunications industry,” she said.

“In a competitive environment, regulatory constraint is not necessary in order to ensure that consumers have the ability to obtain telecommunications services.”

SB 271 is scheduled for its third committee hearing today. The bill is co-sponsored by more than a dozen senators.

[Back]