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from: Daytona Beach News Journal

New Legislation, Same Old Phone Company

April 23, 2007
By Brad Ashwell

Among the things that never seem to change in Florida: The Gators and Seminoles will always feud and our local Bell phone company will always be lobbying Tallahassee for a new rate hike, deregulation bill or clever tax loophole.

In 2003, BellSouth used a phone deregulation bill to raise rates on Florida consumers by $300 million — the biggest price hike in history. And in 2006, it exploited a regulatory loophole to stick consumers with a $34 million bill for repairing their phone network because the company failed to purchase storm insurance. Each time, the details might be different, but the tale is as old as a dial tone — raise rates and reduce consumer value, all while avoiding real competition.

Now, AT&T (formerly BellSouth) wants us to believe that it has become the bulwark of competition, but only for the cable TV and broadband markets. A quick look at the legislation being pushed through the Legislature reveals that this competition flag-waving is really a game; AT&T’s real agenda, it seems, is to eliminate the widely supported non-discrimination laws by allowing the giant telephone monopoly to offer services exclusively to the rich side of town, thus severely limiting competition but fattening its bottom line.

There are good reasons Floridians should be highly concerned about this kind of betrayal by a company whose networks ratepayers have funded for decades. For if it succeeds in ending the non-discrimination laws that require cable television providers to serve all neighborhoods in their service area — and not just cream-skim the affluent ones — it will be a race to the bottom for all providers who will seek to take advantage of the balkanization. At a minimum, AT&T’s effort to repeal the only universal service policy that applies to cable television and broadband providers will, if successful, represent the end of meaningful broadband competition in much of the state. Other providers, taking their cue, will likely retrench their investments and seek to cherry-pick only the higher end communities as well.

Indeed, AT&T has made no secret of its desire to serve fewer rather than more customers in the state. The Bell monopoly told investors that they intend to target so-called “high-value” customers — those who spend over $160 a month on communications services — while only about 5 percent of “low-value” customers — those who spend less than $110 a month — would be able to get the services.

Seeking to divert our attention from the frightening implications of their business plan, the telephone giants suggest that the current local franchising rules are to blame for any lack of competition in the cable market. But it’s clear that local franchising rules aren’t stopping competition, with as many as four providers of multi-channel video service in local markets, including satellite operators that have now earned 30 percent of video customers.

Nor do telephone companies intend to lower cable prices — another common promise they are using to sell Florida legislators on their bill. Their prices for television have already risen nearly 10 percent, and they have admitted that Florida residents should “expect no change” in their monthly bills.

Rather than become supplicant to a narrow corporate agenda seeking a quick buck and disenfranchising our citizenry from the benefits of broadband competition, Florida should be thinking big. Halfway across the world, Kenyan policy-makers took bold steps, dismantling its government-protected monopoly telecom operator and now the country will soon connect to an undersea fiber-optic cable to bring cheap bandwidth and more jobs. Why should Florida do the opposite by letting a reconstructed Ma Bell walk all over us?

The stakes are high — this debate is about how we compete in the future, how we create an educated and empowered public. It’s a shame, then, that your lawmaker is hearing more from the Bell lobbyists than from you — the consumer and constituent. The Bells have unleashed a blizzard of television advertisements and studies, all designed to promote the ruse that local franchises are stopping them from investing. Meanwhile, AT&T has backed phony “non-discrimination” rules lacking any teeth, allowing the company to redline poor neighborhoods so long as they don’t discriminate within rich communities.

Ironically, they’ve offered to repeal the 2003 law that allowed them to raise rates by $300 million in exchange for eliminating real non-discrimination rules. This proposed trade-off should raise serious red flags. Like a used-car salesman who sells you a lemon and then offers a store credit, perhaps Floridians should be demanding a full refund instead.

Ashwell is legislative advocate for Florida PIRG, a public interest research group. To contact your lawmakers, go to www.myflorida.org