Herald-Leader Editorial

Study, don't rush telecom bill; PSC should evaluate real impacts

PSC should evaluate real impacts

February 21, 2013 

A small army of lobbyists is working diligently in Frankfort to free AT&T and other telecommunications providers from the burden of providing basic telephone service to every citizen who wants and can pay for it in Kentucky.

Their argument is that the financial drag of maintaining that service makes it hard for Kentucky to compete for the investment these huge for-profits would like to make to develop more modern telecommunications here.

They will, instead, take their capital investment to other states where they can get a better return.

They also say that these telecom companies have no intention of cutting off inexpensive, basic land-line service to Kentuckians who depend upon it, many of them poor, elderly, rural or all three.

The Kentucky Senate passed the bill easily, 24 to 13 but now it has moved on to the House, where a similar measure died last session.

The House should not bow to the enormous pressure to pass this bill this session.

A reasonable compromise would be for the General Assembly to direct the Public Service Commission, the agency entrusted with overseeing utilities in Kentucky, to assess the proposal, its potential impact on Kentuckians, and what has happened in states where similar measures have been enacted, both in terms of continued service and new investment.

One of the reasons this issue should be thoroughly studied is that the arguments for Senate Bill 88 are inherently contradictory.

On the one hand, we're told that, as for-profit companies responsible to their shareholders, AT&T and its peers are obligated to allocate investment where they can get the best return.

On the other hand, we're asked to trust them that no one will be left behind.

This contradiction represents the heart of the problem: The conflict between responsibility to shareholders and responsibility to customers.

While it's good business always to take care of profitable customers and seek out new ones, it's common sense that someone who has one land line that costs less than $30 a month will never contribute to the bottom line like a wireless customer who can surf the Internet, play videos and text at $100-plus a month.

And the potential of those two customers for the company is equally clear: One will never upgrade and the other is almost certain to.

So, can a company do right by all its customers and also do right by its shareholders, if there's no counter-balancing force?

That's why it's necessary for states to regulate companies that provide basic, essential utilities like water, electricity, natural gas and telephone service.

The public also has an investment here. AT&T built the wire network when it was operating as a monopoly, guaranteed a profit on its investment.

Essentially, that means that ratepayers assumed the risk for building this system that continues to provide reliable, low-cost telephone service even in Kentucky's most remote areas.

The House must study long and hard before it allows the telephone companies to dismantle this system through neglect or abandonment.

Lexington Herald-Leader is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service