Tuesday, April 13, 2010

Stakeholders air telecom rewrite concerns

By Rachel Wells

Lawmakers in the coming weeks will work to tweak legislation that would revamp a 25-year-old law, last updated in 2001, that regulates part of the rapidly evolving telecommunications industry. While consumer groups urge caution, most of the telecommunications industry and business sector call the rewrite a jobs creation measure.

HB 6425 would modernize Illinois’ Telecommunications Act and provide opportunities for investment both from the industry and businesses that rely on high-tech telecommunications, proponents of a rewrite say. And more investment means more jobs and more revenue for the state.

“How you resolve [the state’s budget crisis] is certainly paramount on everybody's mind,” said Jeff Mays, president of the Illinois Business Roundtable. “That's another reason that this should happen. This doesn't require the public sector to spend anything, and it also puts out a very strong message ... [It] puts the state out there that we want innovation, we want investment, we want to grow jobs in these areas.”

Paul La Schiazza, president of AT&T of Illinois, one of the major forces behind the call for a rewrite, said that 20 of the 22 states the company serves have already updated their telecommunications laws and that Illinois should do the same.

“[The 1985 law] focused, rightfully so at the time, on opening up markets to competition. It focused on breaking vestiges of a monopoly and providing choice to consumers,” La Schiazza said, adding that it was then “the most forward-thinking” telecommunications law in the nation.

But the world of telecommunications has changed dramatically since then, and competition is now robust, La Schiazza said. He cited AT&T’s decreased market share – from more than 91 percent in 2000 to its current share of 48 percent – in wire line phone service. Its share of emerging technology services is even lower, La Schiazza said.

“This is just a demonstration of the choice that consumers have in all segments of the market,” La Schiazza said. “To those who might say, ‘This is a risky proposition’ … the risk has already been taken out of the question. I believe the time is now. I believe we should stop losing jobs to neighboring states.”

But AARP Illinois says AT&T’s share of basic telecommunications services, those that the elderly and low-income populations are more reliant on than others, is still highly noncompetitive, and some areas only have a choice between the standard local telephone service and a cable service.

AT&T representatives said the Illinois Commerce Commission has twice declared the company’s landline services competitive. But AARP’s Mary Patton said the rewrite proposal’s definition of competitive – important because the state applies price protection measures where competition does not exist – sets the bar too low.

She said the bill would reduce the authority of the Illinois Commerce Commission, which currently regulates basic telecommunications services, and eliminate some reporting requirements she feels are necessary because telecommunications is one of the most complained-about services to consumer advocacy groups.

“The level of regulation and consumer protection must be appropriate to the actual level of competition in the market, including appropriate consumer protection to address … insufficient competition,” Patton said.

Other concerns from various stakeholders include:

  • Preservation of quality standards for basic, copper line service, which according to the Illinois attorney general’s office is still desired by 40 percent of Illinoisans
  • Continued maintenance of payphone networks which emergency responders often rely upon.
  • Rural access.
  • Guarantees that a rewrite will actually result in increased investment, or jobs, in Illinois.


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