Politics & Government

Kentucky senate passes 'AT&T bill' to further deregulate phone service

The Kentucky Senate doors framed the stairs in the State Capitol in Frankfort in January 2013, the day before the General Assembly session started. Photo by Charles Bertram | Staff
The Kentucky Senate doors framed the stairs in the State Capitol in Frankfort in January 2013, the day before the General Assembly session started. Photo by Charles Bertram | Staff Herald-Leader

FRANKFORT — The Kentucky Senate approved a proposal on Thursday that would further deregulate telephone service in the state. Senate Bill 99, nicknamed "the AT&T bill," proceeds to the House.

Hours earlier, AT&T executives told the Senate Economic Development, Tourism and Labor Committee before its committee vote that the company needs the bill so it can spend more on modern high-speed broadband infrastructure and less on "outdated" land lines.

"The world is transitioning away from the old networks, and consumers are saying loud and clear that they demand the new technology," AT&T Kentucky President Hood Harris told the Senate panel, which approved the bill.

The bill would end the major phone carriers' legal obligation to provide basic land-line phone service in Kentucky's populous urban areas, including Lexington and much of its suburbs. Instead, the carriers could 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 converts it back at the other end.

Rural areas would be mostly unaffected by the bill, Harris said. Past versions of the bill failed 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, Stumbo said he wasn't familiar with the newest version of the bill, but he repeated his concern for basic land-line phone service in mountain counties with spotty wireless coverage.

Stumbo said he could not support any bill that cuts off a person's telephone service.

The bill the Senate approved Thursday also would end the Public Service Commission jurisdiction over consumer complaints about cellphone and broadband service.

Critics told the Senate committee that the bill could leave city dwellers without a guarantee of cheap, basic phone service, including the land lines necessary for reliable calls, directory assistance, E-911 locators, fax machines, home-security systems and medical alerts.

"We are not giving up our land lines. We want to hang onto them even as we get our cellphones because we think the land lines are more dependable," said Jim Kimbrough, president of AARP Kentucky.

In a power outage, land lines can continue to function while cellphones, which rely on batteries, soon become useless, said Tom FitzGerald, director of the Kentucky Resources Council. Ending the guarantee of land lines for people who want them could "cause hardship to thousands of people," FitzGerald said.

Smaller cable companies and Internet providers told senators they worry the bill lacks language to protect them from unfair competitive tactics by AT&T once it's freed of even more PSC regulation, following earlier phone deregulation measures that passed in 2004 and 2006.

The Senate committee voted 9 to 1 for the bill, with Sen. Denise Harper Angel, D-Louisville, casting the only no vote. The Senate later voted 34 to 4 for the bill, with Angel; Sen. Stan Humphries, R-Cadiz; Sen. Robin Webb, D-Grayson; and Sen. Albert Robinson, R-London, voting against it.

Robinson said he personally thought this year's AT&T bill was an improvement over earlier versions, but his constituents oppose it following an aggressive lobbying campaign by AARP.

Since 2011, AT&T's political-action committee has given about $55,000 to state election campaigns in Kentucky, including $5,000 to the Senate Republican majority's chief fundraising committee and $5,000 more to the House Democratic majority's chief fundraising committee. The company spent $108,846 last year on legislative expenses related to its 22 Frankfort lobbyists.

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