Tuesday, June 15, 2010

Quinn signs telecom rewrite

By Jamey Dunn

Gov. Pat Quinn signed a rewrite of the telecommunications law in Chicago today that business leaders and industry insiders say will help bring jobs to Illinois.

The laws will loosen regulations on basic telephone services. The bill also guarantees that the state will not regulate newer technologies, such as cable telephone systems and broadband, for at least three years.

The bill will give companies more flexibility in price and the service packages they offer. Before the change, telecommunications companies had to get approval from the Illinois Commerce Commission (ICC) to change rates or offer a new package of products, such as Internet access coupled with local phone service. They then had to wait up to 45 days after approval to change a rate or launch a new promotion.

They can now do those things immediately. Companies claimed they needed the flexibility to compete in a fast-paced market. If one company releases a new promotion, its competitors would have to wait more than a month to catch up with similar offerings.

When asked whether telecommunications companies’ newfound ability to quickly shift rates and offer different service combinations might upset some consumers, James Zolnierek, director of telecommunication for the ICC, said they could always opt for the most basic packages because those prices are protected by the new law.

“There are safe harbor packages that the prices cannot be increased on. So consumers will always, at least for the life of the bill, will have the choice of going to those safe-harbor packages, where the rates cannot increase. It’s on the more dynamic products like the package services where you buy a lot of features and package it with other products where they will have more flexibility to do things quickly — lower prices, increase prices in some instances,” he said at the Chicago news conference.

Quinn said he would not have supported the bill without such “safe-harbor” protection for “basic, lifeline, low-cost phone service” with fixed prices. “We in Illinois, if we’re going to be prosperous, need to make sure that we have a modern, up-to-date, well-connected telecom system that includes broadband deployment and wireless technologies that are state of the art. But at the same time, we want to protect consumers. People who may be very happy with the phone services they have now, the landline phone. “

Pual La Schiazza, president of AT&T Illinois, says the law will help the industry create jobs, during times that are financially trying for for residents and state government, without any financial support from the public sector. “It will create jobs. It will keep jobs, and it makes Illinois competitive with its neighboring states. … It does incent more broadband investment; it helps to keep and create jobs. But it does it without any subsidies and without any tax credits. It’s good public policy that can be an economic engine for the state of Illinois.”

However consumer advocacy groups such as the Citizens Utility Board, which Quinn helped create, said the law might hinder rural areas’ access to technologies such as broadband.

For a comprehensive look at the telecommunications rewrite, see Rachel Wells’ article in the current (June) Illinois Issues on page 31.


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