Even as broadband has rolled out for many customers around the country, lower-income families still dependent on traditional phone service have faced the quiet threat of "deregulation" bills pushed around the country to raise landline rates and cut consumer protections.
Consumer Groups Block Verizon Legislative Steamroller: The latest round of this fight is in New Jersey where a bill to almost completely life rate regulations and consumer protections sailed through the state assembly in late January and was poised to sail through the Senate until a range of groups ranging from AARP to Citizen Action to the Communication Workers of America mobilized against the bill.
And yesterday, the state Senate voted to delay consideration of the bill while lawmakers rewrite the language
See Loosened Phone Controls Hits Snag - WSJ.com:
Earlier this year, the bill sailed through the state Assembly with bipartisan support. But it stalled Monday in the state Senate after a lobbying campaign blossomed. The AARP warned its members the bill would cause rates to go up and hurt customer service. "This will be a big change," AARP spokesman Douglas Johnston said. This month, 12,000 AARP members made phone calls to their state senators, he said.
We will see how much real change in the language is made, but this was a real victory for consumers.
My Report: This was a campaign I was personally involved in through co-writing a report on behalf of the policy groups, Demos and New Jersey Policy Perspective. The report,
How To Raise The Phone Bill Of The Average New Jersey Family:What S 2664 Will Do To NJ Consumers, detailed how deregulation has hurt consumers in states around the country:
- One national survey found that out of 20 states surveyed with deregulation in place, 17 of those states had seen rate increases ranging from 8 percent per year to 100 percent per year.
- A review of four years of deregulation by the California State Senate found large increases in rates and increases of several hundred percent for some services.
- Higher phone rate increases would follow the pattern of cable Deregulation where lower prices did not result from deregulation.
- One critical loss from phone deregulation in other states has been not just higher rates but also the loss of an effective regulator who can enforce consumer rights.
As big a threat to consumers is the history of Verizon (the main landline phone company in New Jersey) selling off its landline assets to undercapitalized companies which then went bankrupt. Shareholders, creditors and ratepayers have condemned Verizon for the financial manipulations behind these deals as “Enron-style" skullduggery. Customers in some states have suffered outages, poor customer service, and billing problems, which, in many cases, were not restored to pre-merger levels.
Challenging Deregulation Ideology: Telephone deregulation, like banking and electricity regulation, has been driven by ideology, not any evidence that they improve service or benefit consumers. In fact, taking New Jersey as an example, we have a state with some of the lowest phone rates, yet also a state that ranks as essentially as the top state for delivering high-speed broadband to its residents. See
While no doubt the decisive reason for the legislative leaders tabling the bill and hopefully rewriting it significantly were the estimated 20,000 phone calls coming in from AARP members and other groups protesting the likely rate increases, it was nice to see editorial writers in the state rejecting the deregulation myth and attacking the bill, using a lot of the data from my report. See these editorials:
Jam the signal on telecom "Choice Act" - http://www.app.com/article/20110320/NJOPINION01/103200323/Jam-signal-telecom-Choice-Act-?odyssey=mod|newswell|text|Opinion|p
The Record: Over-deregulation- http://www.northjersey.com/news/opinions/118317164_Over-deregulation.html
Don't buy the hype in NJ cable deregulation bill- http://www.mycentraljersey.com/article/C0/20110320/NJOPINION01/110318031/1207/NJNEWS14/EDITORIAL-Don-t-buy-hype-NJ-cable-deregulation-bill-?odyssey=nav%7Chead
HOT TOPIC: TELECOM DEREGULATION - Bill promises higher rates potential loss of landlines- http://www.app.com/article/20110320/NJOPINION06/110319018/HOT-TOPIC-TELECOM-DEREGULATION-Bill-promises-higher-ratespotential-loss-of-landlines
And see this Q&A I did with the Star Ledger -
http://blog.nj.com/...