Fight over Basic Phone Service Deregulation, Outage Requirement Starts in Kentucky
A deregulation bill (SB 135) in Kentucky faced sharp criticism and even got the state attorney general’s attention, though state regulators were neutral after revisions were made. Meanwhile, while the industry saw another bill (HB 209) in the state that would establish outage reporting requirements as burdensome, supporters said the measure is “modest” and necessary.
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Kentucky Attorney General Jack Conway is closely monitoring SB 135 as it continued to change and evolve, a spokeswoman said. The attorney general is also working with other state agencies like the Public Service Commission to fully assess its potential impact on Kentucky consumers, the spokeswoman said. SB 135, sponsored by Republican Sen. Paul Hornback, could lead to the disappearance of basic phone services in the state, said Tom FitzGerald, executive director of the Kentucky Resources Council. The state regulators must have the power to decide whether to let a phone provider “off the hook” for providing basic phone services, he said. Hornback couldn’t be reached Wednesday for comment.
SB 135 removes the requirement that a carrier must maintain any residential tariffs on file with the Public Service Commission (PSC), restricts the PSC’s ability to inspect the condition of the carrier, and removes the requirement to file any reports with the PSC, including outage reports, said a PSC spokesman. The bill removes “the burden” to offer service if the incumbent carrier can demonstrate the existence of competition, he said. He noted the bill ties provider-of-last-resort requirements to FCC regulations. The bill also prohibits the PSC from developing standards for Eligible Telecom Carriers that differ from federal standards.
Though groups like the National Rural Assembly also warned the bill could allow companies in the state like AT&T, Windstream and Cincinnati Bell to end their obligation as carrier of last resort, the PSC is neutral on the bill, which was recently revised, the PSC spokesman said. He noted the original bill contained provisions that would have allowed the carrier of last resort requirement to lapse without clear evidence of adequate competition or availability of alternative service. The Kentucky Legislature decided in 2006 that the cost of all telephone service in the state should be driven largely by competition, he said. SB 135 extends that principle to cover “the burden of providing service as a carrier of last resort,” he said. Under the provisions of the bill, service is still guaranteed, but the type of service is not, he said. It’s up to the Legislature to decide whether that’s a good public policy, he said. In any case, the PSC would retain jurisdiction over customer complaints regarding billing, service adequacy and similar issues, and could initiate its own investigations into such matters, he said.
The bill is not about abandonment or discontinuing service, said Mary Pat Regan, AT&T Kentucky president. The proposal is about encouraging investment in new technologies like wireless broadband in the state, she said. The bill wouldn’t leave Kentuckians without the ability to obtain voice service, she said. The bill doesn’t impact pricing, an AT&T spokesman said. It doesn’t take away the PSC’s ability to continue to resolve consumer complaints, he said. It doesn’t affect continued access to 911 emergency services and doesn’t change state or federal laws that require approval before a provider can withdraw service or sell, abandon or transfer its assets, he said. The bill also doesn’t impact Lifeline programs, and the PSC’s oversight over wholesale and intercompany agreements wouldn’t be affected, he said.
Calling HB 209 a “modest” and “reasonable” measure, the Kentucky Resources Council claimed the bill intended to do “nothing more than to require reasonable efforts” to restore service and to require reporting to state regulators the total number of outages, factors contributing to the outages, and the number of outages that were not cleared in a timely fashion. The bill contains no penalties, but provides important information to the customer concerning the performance of telephone utilities in responding to outages, the group said. HB 209 is a step backward for Kentucky, an AT&T spokesman said. These regulations don’t exist in neighboring states like Indiana and Tennessee and would ultimately make Kentucky less attractive for jobs and investments, he said.