Phone deregulation bill clears House panel; new urban customers might not get land-line option

jcheves@herald-leader.comMarch 13, 2014 

FRANKFORT — A bill that would further deregulate telephone service in Kentucky breezed through a House committee Thursday amid intense lobbying by AT&T, which crafted it.

The bill would eliminate the major phone carriers' legal obligation to install basic land-line phone service in new locations in Kentucky's urban areas, including Lexington and much of its suburbs. The carriers — AT&T, Cincinnati Bell and Windstream — would be allowed to provide phone service through a wireless plan or an Internet protocol-based technology, which converts voices into a digital signal that travels over the Internet and then reconverts it at the other end.

Consumer-protection groups warned the committee that the bill also would end the Kentucky Public Service Commission's authority to investigate complaints about cellphone and broadband service. Instead, the bill says that the PSC "may assist in the resolution of consumer complaints."

The House Economic Development Committee voted without opposition to approve Senate Bill 99, nicknamed "the AT&T bill," and send it to the full House. The Senate approved the bill in January.

Many Kentuckians rely on cheap land-line phone service and don't want to be forced to upgrade to a costlier wireless plan, regardless of where they live or move, said Tom FitzGerald, director of the Kentucky Resources Council. Wireless service is less reliable, FitzGerald said, and it doesn't offer features such as a guaranteed E-911 locator, home security system links or fax machine connections.

"This is not the time to move forward and strip the consumers of their protections and remove the PSC's oversight," FitzGerald told the committee.

Mary Love, an activist with the group Kentuckians for the Commonwealth, told the House panel that cellphone reception is spotty in much of the state, especially in Eastern Kentucky's mountains. Lawmakers should be cautious about relieving the phone carriers of their responsibility for installing basic land-line phone service, Love said.

But AT&T executives told the committee that the bill would let their corporation free up money to invest in its digital infrastructure in Kentucky. The savings would come from phone carriers no longer having to expand their "outdated" land-line systems, the executives said. Nobody would lose existing land-line service unless they chose to cut the cord, they said.

"For people in communities all over the state, if they have a land-line today and they want to keep it, under this law, they will be able to do so," said Sen. Paul Hornback, R-Shelbyville, the bill's sponsor, sitting between two AT&T executives.

Since 2011, AT&T's political-action committee has given about $55,000 to state election campaigns in Kentucky, including $5,000 each to the chief fundraising committees of the Senate Republican majority and the House Democratic majority. The company spent $108,846 last year on legislative expenses for its 22 Frankfort lobbyists, many of whom attended Thursday's committee hearing to distribute handouts titled "SB 99: Fact vs. Fiction" to lawmakers.

Past versions of the AT&T bill failed in the legislature because they would have allowed some land-line service withdrawal from rural areas. Lawmakers representing those areas — notably House Speaker Greg Stumbo, D-Prestonsburg — objected. On Thursday, Hornback said those concerns were taken into account in this version.

Rep. Ruth Ann Palumbo, D-Lexington, chairwoman of the House Economic Development Committee, said after Thursday's vote that she is confident that consumers are protected from service withdrawal in this year's version of the bill. However, to be safe, Palumbo said, she will amend the bill on the House floor using language from FitzGerald that further specifies the protection for existing land-line customers.

A House floor vote is unlikely before "late next week," she said.

John Cheves: (859) 231-3266. Twitter: @BGPolitics. Blog: Bluegrasspolitics.bloginky.com.

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