FRANKFORT — A bill to deregulate local phone service in much of Kentucky, commonly called "the AT&T bill," was approved Thursday by a House panel.
House Bill 152 would largely strip the Kentucky Public Service Commission of its oversight of phone service and end the obligation of major phone carriers AT&T, Windstream and Cincinnati Bell to provide basic phone service in urban and suburban areas, including Lexington, Georgetown, Richmond, Nicholasville and Frankfort.
The companies instead 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 is reconverted at the other end.
Rural customers — those living in phone exchanges with fewer than 15,000 homes — could ask to stick with their land lines, but the companies would not be required to extend basic service to new developments in rural areas.
HB 152 proceeds to the full House after its approval Thursday by the House Labor and Industry Committee. The Senate is weighing its own version, Senate Bill 3.
House leaders have blocked votes on past versions of the bill for several years because of consumer-protection concerns, but House Speaker Greg Stumbo said Thursday that it was time for the House to finally vote on the AT&T bill.
Stumbo, D-Prestonsburg, said he didn't support the measure and worried that phone deregulation would poorly serve some Kentucky households.
"It's a way for (the major phone carriers) to get rid of land lines," Stumbo said.
"They've hired every lobbyist between here and Dallas, Texas, and spent untold amounts of money, so I guess their chances are pretty good," Stumbo said. "I just don't like deregulation of an industry that built itself through government-granted monopolies, coming in now and trying to divest itself of its responsibilities."
AT&T has 18 lobbyists registered at the Capitol this winter. The major phone carriers last year reported spending $202,858 to lobby the legislature and $18,350 in political action committee donations to state politicians, mostly legislators.
During Thursday's hearing, AT&T Kentucky president Hood Harris told the House committee that his company would be able to expand its broadband infrastructure in the state with the money it saves from no longer having to maintain and expand the land-line system.
"Every dollar that we put into the old network is a dollar that we can't put into the new network," AT&T spokesman Daniel Hayes said after Thursday's hearing. In 2013, more than 80 percent of voice connections in Kentucky were through something other than a traditional land line, Hayes said.
Tom FitzGerald, a consumer advocate and environmental lawyer, testified that many Kentuckians rely on cheap, basic phone service through land lines, not just to call people but for security and home-health systems.
Roughly 11,000 customers in Kentucky's urban and suburban phone exchanges use only basic land-line service, according to AT&T's own data, FitzGerald said. AT&T wants to shift those people to pricier, high-tech options that don't yet work as reliably in all parts of the state, he said.
"This is all about up-selling," FitzGerald told reporters afterward. "There is no indication that they're going to spend an additional cent on broadband access if they get this."
Although AT&T says Kentuckians would continue to be protected by the Federal Communications Commission, which won't let basic phone service be dropped in a community unless a functional alternative exists, the telecommunications industry is fighting that oversight in Washington, FitzGerald said.
The House committee voted 14-1 to approve the bill. The sole dissent came from Rep. Arnold Simpson, D-Covington, who called it "a very good bill" but said lawmakers haven't had enough time to study its full effect.
"This is a very serious bill, because once you take certain fundamental protections afforded by the Public Service Commission away, it's like the genie in the bottle. You won't be able to get the genie back in," Simpson said. "I just think we're moving a little too quick."