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Published: 10/24/2009

Proposal could raise Ohio telephone rates

BY JIM PROVANCE
BLADE COLUMBUS BUREAU CHIEF

COLUMBUS - Consumers relying on telephone land lines could see their rates climb for basic service under proposed state legislation to ease industry regulation, a coalition of consumer groups charged yesterday.

Among other things, a pair of identical bills in the House and Senate would lift a requirement that telephone companies prove each year to the Public Utilities Commission of Ohio that they have competition in their service territories before they can raise monthly rates by up to $1.25 for basic local exchange service.

It would also permit companies to charge higher security deposits and would eliminate an automatic one-month credit on customers' bills whenever service outages last longer than three days. Customers would instead have to apply for the credit.

"There are no benefits in the bill for consumers," Ohio Consumers' Counsel Janine Migden-Ostrander said. "The bill benefits the telephone industry."

The industry counters that Ohio regulations for traditional land-line companies are unfair, particularly considering they have lost 40 percent of their business since 2001 to wireless, Internet, and cable companies that aren't subject to similar state regulation.

"There has been a competition explosion in the telecom market in Ohio, the country, and the world," said Charles Moses, president of the Ohio Telecom Association representing telephone giants, such as AT&T and Verizon, down to small local providers.

"Local telephone companies have less than 30 percent of market share, but they have all of the regulatory burdens that went along with the monopoly era," he said.

He said 26 states, including neighboring Michigan and Indiana, have updated their laws.

The 110-page bills have received several committee hearings in each chamber but have yet to be the subject of opposition testimony.

Ms. Migden-Ostrander said that if an unlevel playing field is the concern, lawmakers should instead consider broadening regulation to encompass other aspects of telecommunications.

"Why should consumers be the sacrificial lambs in all of this?" she asked. The opposition coalition includes such groups as the AARP and the Ohio Poverty Law Center.

Gov. Ted Strickland is "comfortable" with the bills, spokesman Amanda Wurst said.

"The PUCO has been involved in the conversation as the legislature was drafting the language," she said. "It will continue to be engaged in the conversation. This is the beginning of the legislative process."

Sen. Stephen Buehrer (R., Delta), the Senate bill's sponsor, said some small community phone companies have gone decades without rate increases for basic service because of the cost of making the case to the PUCO that they have local competition.

"The bottom line is this is about jobs, whether we want ongoing investment in our state to develop better and more options for telecommunications," he said. "If we choose not to, we will be left on an island while other states pass similar bills. AT&T has already invested in North Carolina and other states that have passed bills like this."

The bill also faces opposition from the Ohio Cable Telecommunications Association.

"We're concerned that it does more than modify incumbent retail regulation," Executive Director Jonathon McGee said.

"They're changing definitions in the bill that have application in carrier-to-carrier agreements that govern the marketplace between incumbents and competitors."

The agreements deal with such things as traditional phone companies providing cable companies with access to their utility poles.

Contact Jim Provance at:

jprovance@theblade.com

or 614-221-0496.



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