Alabama's phone deregulation bill close to passage

Thu, 04/16/2009 - 8:10am
Phillip Rawls, The Associated Press

MONTGOMERY, Ala. (AP) – A bill pushed by AT&T Inc. to complete deregulation of phone prices in Alabama is one step away from passing the Legislature.

The bill, which won Senate approval last week (story here), sailed through the House Government Operations Committee 8-1 Wednesday. The bill now goes to the House for a final vote that could come as early as next week.

Much of the traditional landline phone business in Alabama was deregulated by the Legislature in 2005 at the request of Alabama's largest phone company, AT&T. This year's bill would end the state Public Service Commission's regulation of what's left – basic landline phone services for residences and businesses with four phone lines or less.

AT&T spokesman Hood Harris said about 20 percent of the company's residential customers and 10 percent of its business customers have phones regulated by the PSC. The bill would end the regulation on Jan. 1, 2011.

Joan Carter, director of AARP Alabama, said most of the organization's 513,000 members in Alabama have basic residential phone service that is regulated. She predicted deregulation will lead to higher prices because "there will be no oversight by any responsible agency to protect the consumers."

Harris said the legislation puts AT&T in the same position as cell phone companies and Internet phone services, which aren't regulated. He said AT&T lost 10 percent of its landline customers to other technologies last year and wants to avoid further loss.

"We have no choice but to keep our rates competitive," he said.

The Senate passed the bill 19-8 on April 9. Harris said he is "cautiously optimistic" it will clear the House before the legislative session ends in mid-May.

The Alabama AFL-CIO is fighting the bill. Its opposition coincides with contract talks between the phone company and its employees.

"It's typical corporate greed. It's not good for the consumers," said Al Henley, the labor group's secretary-treasurer.

The current version of the bill provides that once deregulation occurs, phone companies can't charge their rural customers more than their urban customers – a provision sought by the Alabama Farmers Federation, the PSC and several other organizations.

The bill would also require state social service agencies to set up systems to enroll low-income Alabamians in the Lifeline and Link-Up programs, which provide subsidized phone installation and monthly bills. Many low-income Alabamians who qualify currently don't participate in the programs.

Barry Spear, spokesman for the state Department of Human Resources, said the requirement would mean more work for already overworked employees in the food stamp program. He estimated it would require workers to spend an extra 30 minutes with each of the 435,000 households in the food stamp program and would cost the agency $4.6 million annually to administer.

Proponents of the bill, including AT&T, say the costs should be much less and Alabama needs to do more to help low-income citizens qualify for reduced phone rates.

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