Ohio's dearth of telephone competition worries critics

10/28/2001

COLUMBUS - Ohioans who decide they don't want caller ID enough to pay what the local phone company demands still can't call another company to buy the service.

But they can install an answering machine to screen calls.

Most residential customers who are unhappy with traditional phone lines with voice mail and other features can't shop around. But they could drop their local phone companies and choose cellular phones with similar features.

Competition is in the eye of the beholder, said Alan Schriber, chairman of the Public Utilities Commission of Ohio.

In exchange, the companies would commit to deploying a high-speed Internet network throughout Ohio.

“Based on the amount of competition so far, it would take 40 years to get to the point where we have real [residential] competition,” said Ohio Consumers' Counsel Rob Tongren.

He maintains that competition is available in just 1 percent of the Ohio residential market, with most phone service competitors focusing on the more lucrative business market.

By comparison, about 19 percent of New York's residential consumers can shop for local phone service.

To force the issue, PUCO recently slashed the one-time, per-customer switching fee local phone service competitors pay Ameritech and other phone utilities to use their telephone line networks from $111 to just 79 cents.

“I believe we've opened the door,” Mr. Schriber said. “If nobody steps through, we can't force it. But I believe there will be strong competition. There will be some big players.”

Mr. Tongren said he believes PUCO took a step in the right direction by slashing the switching fee.

“But they missed the recurring monthly charge that Ameritech says it incurs for the costs of the network they are letting competitors utilize,” he said.

One point of contention is caller ID, a service consumers have grown increasingly dependent upon to weed out telemarketers and unwelcome calls.

Ameritech, which serves 60 of Ohio's 88 counties, insists that the fear of prices escalating dramatically once the waiting periods end is unfounded. It notes that, even in the current regulatory climate, its monthly charge for caller ID has dropped from $6.50 in 1994 to $5.95.

If the price gets too high, consumers will turn to answering machines and other means of screening calls, it says.

“Customers vote with their feet,” said Jim Smith, president of SBC Ameritech Ohio. “If we try to charge too much, customers will drop us.”

The company, however, opposes the idea of making caller ID a basic service.

In exchange for phone companies' agreeing to deploy a high-speed Internet network across the state over the next few years, PUCO would:

Indefinitely freeze rates for basic phone service, including a single phone line with touch-tone service and local calling.

Freeze for three years rates on “non-essential” features, such as call-tracing, caller ID, number-blocking, additional phone lines, and unpublished numbers. After this period, rates could as much as double.

Freeze for one year the rates of additional services, including call-waiting, call-forwarding, and high-speech Internet. After one year, the price caps would be eliminated.