In April, we argued against a bill sponsored by state Sen. Mark Wagoner (R., Ottawa Hills) that would make it easier for local telephone companies to eliminate local basic service. That position is bolstered in a recent report by a nonpartisan public policy group.
Advocates of the legislation say that if companies can cut service in areas where there are at least two competing providers, it will free capital that can be used to improve Ohio's telecommunication infrastructure. That will create jobs and make Ohio more competitive in the technology-driven global economy.
But the bill only requires that competitors exist in at least part of the coverage area. That sets the bar so low that companies could disconnect customers -- usually the elderly, the poor, and people in remote rural areas -- who do not have a reasonable alternative.
The bill would have little effect in the fully competitive Toledo area. Full disclosure: Local land-line provider Buckeye CableSystem is part of Block Communications Inc., the parent company of The Blade.
The potential damage to poor, elderly, and rural Ohioans was sufficient cause to call for an amended bill that would protect consumers from losing service because it becomes unavailable or too costly. The Innovation Ohio report adds fuel to the fire.
The Columbus-based group condemns the bill, which passed the state Senate and is under consideration by the House, as "anti-consumer." The report describes as "faulty" provisions intended to protect consumers from loss of service. And it concludes that the legislation will hurt old, sick, poor, and rural Ohioans.
The report notes that telecommunications regulations were reformed just two years ago, in part to protect and create jobs. Since then, according to AT&T President Tom Pelto's testimony, his company has eliminated some 3,000 jobs.
The report dismisses claims that telecommunications companies need relief from expensive land-line service to invest in modern technologies. It notes that AT&T reported $30 billion in profits in 2011, two-thirds of which was paid to investors in dividends. Clearly, the cost of maintaining land lines is not preventing investment in broadband and wireless technologies.
Innovation Ohio points out, as we did three months ago, that enacting a new set of reforms should at least wait until the 2011 reforms have been evaluated. The legislative review committee enacted to do that is scheduled to report its findings in 2014, plenty of time for it to expand its scope to examine the changes proposed in the current legislation.
The bill before the General Assembly is premature and is likely to hurt people who have no choice other than to depend on land lines to contact emergency services, the doctor, or the drug store. As written, it only benefits telecommunications companies that find their public-service obligation onerous.
Lawmakers should encourage advances in the state's telecommunications infrastructure, but not if disconnecting Ohioans is part of the bargain.
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