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Alabama Senate votes to deregulate landline phones

Fri, 04/10/2009 - 8:20am
Phillip Rawls, The Associated Press

MONTGOMERY, Ala. (AP) – Alabama's largest phone company, AT&T Inc., persuaded the state Senate to pass legislation Thursday that would end regulation of home and business phone services and give landline phone rates the same deregulated status as cell phones and Internet-based calling.

The Senate approved the bill 19-8, while a senator who had been filibustering it, Bobby Singleton (D-Greensboro) was outside the Senate chamber. The bill still must be passed by the House and signed by the governor to take effect.

AT&T spokesman Hood Harris said the bill would create a level playing field for landline phone companies with cell phone and Internet-based firms, which aren't regulated by the Alabama Public Service Commission.

Singleton said deregulating phone companies would harm consumers. "They are going to raise your bill as high as they want to raise it," he said.

Harris said AT&T lost 10 percent of its landline customers to other phone technologies last year. That, plus increased competition for landline service, will require AT&T to keep rates competitive, he said.

The bill is the Legislature's second go at deregulation.

In 2005, the Legislature passed a law, at the request of AT&T, to deregulate landline phones for residential customers who buy multiple services, such as phone and Internet, and for businesses with five or more lines.

The new bill, sponsored by Sen. Rodger Smitherman (D-Birmingham) would complete deregulation by ending the ability of the PSC to control prices for basic residential service and for businesses that have four phone lines or less.

Harris said about 20 percent of AT&T's residential customers and 10 percent of its business customers still have regulated phones.

The PSC has required AT&T to charge rural customers the same rates as urban customers, even though installing rural phone lines is often more expensive. Because of that, the three PSC members initially fought the bill.

But the Senate rewrote the bill to mandate that phone companies can't charge rural residents more than they do urban residents. PSC President Lucy Baxley said that took care of a major concern.

Harris said that if the bill passes, AT&T plans to keep its rates the same for all Alabama customers, regardless of where they live.

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•  Alabama Senate votes to deregulate landline phones
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