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Bill would deregulate Verizon, others in FloridaTAMPA, Apr 15, 2011 (Tampa Tribune - McClatchy-Tribune Information Services via COMTEX) -- In November 2009, telephone giant Verizon paid $2 million to settle what state regulators and the AARP called a steady decline in basic telephone service in Florida. Some customers went days without repairs while critics said Verizon focused instead on selling higher-end fiber-optic phone service for cable TV, Internet and phone service. Now, Verizon and other phone companies that have lost about half their residential phone line customers are helping push a bill through the Florida legislature that would remove one of the state's last roles in formally monitoring phone service quality. Among other changes, the state Public Service Commission could no longer formally advocate for customers stuck with services they didn't ask for (known as "slamming"), and phone companies could start charging different rates for different neighborhoods. Only an estimated 160,000 people in Florida have that low-level, "basic" phone service that is still regulated. But that population tends to be the most vulnerable, said Charles Milsted, associate state director for the AARP, who is lobbying against the deregulation bills, SB 1524 and HB 1231. "For some people, that's all they need or can afford because they're elderly or disabled," said Milsted. "Now, there would be no one standing up for these people, we're just unzipping them and letting them float." -- -- -- -- -- Verizon officials say the legislation would merely complete a long-term process of deregulating Florida's telephone industry from a monopoly service to a free marketplace. Florida has already dropped a requirement that companies like Verizon work as a "carrier of last resort" to provide service in high-cost markets, like very rural areas. And state regulators do not directly measure phone quality or enforce rates of other Internet or cable-phone providers like Bright House, Magic Jack, Vonage, cellular providers or Comcast. "We're looking for that same treatment," said Michelle Robinson, Verizon's Southeast region president. "We want to focus less on what Tallahassee wants and more on what our customers expect from us." Verizon officials estimate they've lost 50 percent of their residential line customers over the past five years to rivals, including wireless providers, who are not regulated by the state. For instance, Bright House just recently surpassed one million telephone customers in the combined market of Tampa Bay and Orlando, mainly from the major telephone giants like Verizon. In a deregulated, free marketplace, Verizon has "every motive to win and keep customers," and offer new options, Robinson said. For instance, Verizon heard "over and over" from some customers who did not want to commit to a 2-year contract for FiOS phone service, so the company started offering a month-to-month plan. "No regulation requires us to do that," she said. "We did that on our own." -- -- -- -- -- That's not enough for Milsted of the AARP. For instance, the state now requires phone companies to tell customers about their lowest-priced plan, which he said many people pick for things like health-monitoring equipment or home security systems. "We're concerned," he said, "that the companies will start off telling them about something else, then add on feature after feature ... and people will pay for more than they need or want." The AARP was one organization that signed off on a $2 million settlement in 2009 that ended a state investigation into lapses in Verizon's basic phone service. Verizon has since replaced many of its top executives locally and pledged to improve service quality. The state Pubic Service Commission, which would lose authority under the new bills, issued its own report expressing concerns. While proponents of deregulation argue the free market will drive down prices, the PSC pointed to other states where the opposite happened. In Missouri, phone companies raised rates 60 percent since 2007, the FPSC report noted. In Ohio, deregulation passed in 2010 and rates rose 9 percent. In Arkansas, deregulation became effective in 1997, and rates recently rose 19 percent in some markets. In California, residential customers received a 22-percent increase in 2010, after a 23-percent increase the prior year. The PSC also noted other concerns. For instance, the bills would remove current caps on basic phone service prices, eliminate a requirement to offer at least one flat-rate plan, eliminate a state requirement to offer free 1-900 and 1-976 call blocking, eliminate the state's authority to require fixes to damaged phone poles, and removes a prohibition against charging "discriminatory" prices for different customers. The deregulation bills have passed initial committee hearings in the House and Senate on unanimous votes, and could be headed for full House and Senate votes before the end of the current session. "I am one of those people who believe innovations rule the day," said Sen. Jeremy Ring (D-Margate) who voted for the bill in committee. "It's tough for a communications company to compete on the innovation side if they're held back by regulation. And most seniors I know carry their cell phones. They have so many options. It's a different argument than even six or seven years ago." Milsted of the AARP said he's almost resigned to seeing the deregulation bill passed by the Legislature. "I do not see any hope that we can turn this around," Milsted said. "For some reason, this is becoming a bi-partisan fast train moving along, and we don't understand. This could leave 160,000 people potentially without any phone service if they can't afford more." Contact Richard Mullins at (813) 259-7919 or [email protected]. Follow him at http://twitter.com/DailyDeadline. To see more of the Tampa Tribune or to subscribe to the newspaper, go to http://www.tampatrib.com. Copyright (c) 2011, Tampa Tribune, Fla. Distributed by McClatchy-Tribune Information Services. For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com. |