AT&T accused of misleading lawmakers about bill allowing carriers to drop land-line service

jcheves@herald-leader.comMarch 14, 2014 

FRANKFORT — A consumer-protection attorney on Friday said AT&T of Kentucky executives gave misleading testimony to a House committee about the impact of a phone deregulation bill that would allow major carriers to drop many land-line phone customers.

"They misrepresented to the committee," Tom FitzGerald, director of the Kentucky Resources Council, told several lawmakers outside the House chamber. "I'm not going to call it a lie. But it wasn't the truth."

Hood Harris, president of AT&T Kentucky and one of the executives who testified, later disputed FitzGerald's comments and said he was "disappointed" by them. Harris said he answered lawmakers' questions directly and accurately.

"I will stand by what I said," Harris said. "In the 25 years of my career, nobody ever has questioned my integrity."

Senate Bill 99, nicknamed "the AT&T bill," would end the major phone carriers' legal obligation to provide basic land-line service in urban areas, defined as telephone exchanges that serve 15,000 or more customers. Instead, the phone carriers could steer customers into more costly wireless plans or Internet protocol-based technology.

Rural customers with land-lines would get a choice on whether to switch and 30 days to change their minds, although basic land-line service would not be extended into newly developed rural areas.

The House Economic Development Committee voted without opposition Thursday to approve the bill and send it to the House floor. The Senate approved a version of the bill in January.

During the committee hearing, Rep. Wilson Stone, D-Scottsville, asked Harris if the bill would require phone carriers to restore basic land-line service to an existing home if the service has been disconnected. Stone offered the example of a vacant home on his family farm where a land-line exists and a future occupant might want basic phone service restored.

Yes, the carrier would have to restore basic phone service if a land-line already was there, Harris told Stone.

"In that situation, where the facilities exist today, somebody moving in there would have the right to basic local service, and they could get that service," Harris said. "Under this legislation, we maintain an obligation to provide service where those facilities exist. That's correct."

However, the reality is that the bill would let the major phone carriers — AT&T, Cincinnati Bell and Windstream — permanently cut basic land-line service to a residence or business once the service has been disconnected, FitzGerald said.

If a customer is dropped from basic land-line service in urban areas or chooses to upgrade in rural areas and does not change his mind in 30 days, nothing in the bill requires the carriers to restore basic service, even if the property is sold to someone new who wants it, FitzGerald said. The bill also has "ambiguous" language that could allow rural homes to be refused restored basic land-line service if the service initially was installed with other features, such as call waiting, FitzGerald told the lawmakers Friday.

"Basically, AT&T is trying to get out of the land-line business," FitzGerald said.

Additionally, FitzGerald told lawmakers that despite AT&T's assurances to the committee, the bill would strip the state Public Service Commission of all regulatory power over consumer complaints against the major phone carriers in urban areas.

Outside the House chamber on Friday, Stone and House Economic Development Chairwoman Ruth Ann Palumbo, D-Lexington, said it was their impression from the AT&T executives' testimony that the bill would not permit existing land-line customers in Kentucky to be dropped against their will.

"I understood it that as long as the land-line infrastructure was there, customers could not be denied a connection," said Palumbo, whose urban district is one of the areas in which the phone carriers could withdraw basic land-line service under the bill. "We did not realize — we listen to the testimony, and we take their responses as literal."

Added Stone, "I would hope that we would not lose the land-line capacity that's already there, so that when the cell service is not working as well as you expect, we have areas with basically no phone service in the state. Nobody wants an existing home to not have basic phone service if it's available to it today."

Palumbo said she's working with FitzGerald on a series of amendments to the bill to protect customers from having their service dropped and to guarantee more oversight from the PSC than the bill currently offers. It's also possible that the bill won't move any further this legislative session, she said.

"Right now, it's a work in progress," Palumbo said.

Harris, the president of AT&T Kentucky, said he honestly answered every question put to him by lawmakers about the bill. Harris said that when he told the committee that basic land-line service would be restored to a home, he was not saying all customers would be so protected, but was responding to Stone's example of a home on a family farm, presumably in a rural area, which he assumed had not ever ordered wireless service or other services that would invalidate its right to service restoration.

Under the bill, AT&T spokesman Brad Rateike said, the phone carriers would have to restore basic land-line service to a connected home in a rural area unless the current or previous owner had switched to a wireless or IP service and let the 30-day deadline elapse, in which case "we would be relieved of the obligation." In urban areas, the company would not have to restore basic land-line service, he said.

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.

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

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