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Questions linger over Ill. telecom overhaul bill

Fri, 05/07/2010 - 8:05am
Sophia Tareen, The Associated Press

SPRINGFIELD, Ill. (AP) – This much is certain: For Illinois consumers who want basic landline telephone service, a proposed overhaul of the state's 1985 telecommunications law provides low-cost options.

But what else the modernization plan would do is murky.

Supporters say the overhaul – which would lift regulations from companies that provide landline telephone service – would allow companies to focus on developing newer technologies and bring thousands of jobs to the state. But consumer rights groups say it could lead to higher prices and fewer options, particularly in areas outside Chicago.

"The bill will lead to eroded service quality and open the door for future rate hikes," said Jim Chilsen, a spokesman for the Citizens Utility Board.

The rewrite of the state's telecommunications law, which the Illinois House and Senate passed unanimously, is headed to Gov. Pat Quinn. Legislators say the idea was to update the law, written before cell phones and Internet service were widespread, to capitalize on new opportunities.

"This legislation is the key to opening up investment in the telecommunications industry in Illinois," said state Sen. Michael Bond. "By modernizing our system, we are showing providers that we are worthy of their investment."

But the bill has no specific provision requiring companies to create jobs. AT&T, which provides the majority of landline service in Illinois, led efforts to have the bill rewritten.

Quinn aides have said they'll review the bill before the governor decides whether to sign it.

Even though federal officials say more than 20 percent of American households use cell phones only, the Illinois Commerce Commission says about 6.5 million residents still have landline phones.

For anyone who wants basic landline service, the bill outlines three cheap options, and companies will be capped at those prices.

They range from $3.05 a month for no-frills service in Chicago up to $19.70 a month in other parts of Illinois for service packaged with options such as call waiting and caller ID.

"We were able to fight for consumer protections ... to maintain service quality standards," said Robyn Ziegler, a spokeswoman for the Illinois attorney general's office, which opposed the bill before the options were negotiated.

For Fran Bollitto, 66, a disabled veteran who relies solely on her landline phone in Springfield, that could mean some relief.

Bollitto said she can hardly afford the most basic landline package and pays more than $25 a month. Under the measure, her package would start at $9.50 a month for basic service.

"I can't afford a cell phone, but I have to have something here," she said.

But for consumers who want more options bundled with their landline, like Internet service, the measure doesn't mandate lower rates because the state doesn't regulate Internet service.

Legislators and AT&T have said that's because such markets are competitive enough to keep consumer prices low.

Another area that remains unclear is how broadband DSL Internet service, which can require a landline for installation, will be affected in areas outside the Chicago area.

The new law doesn't change the requirement that AT&T offer DSL to 90 percent of its customers.

But some contend that the company is likely to focus that 90 percent on the Chicago area, leaving some portions of the state with slower and more expensive Internet service options, said CUB analyst Bryan McDaniel.

AT&T Illinois President Paul La Schiazza said other Internet service providers can offer good service in areas his company won't reach. Besides, he said, the bill's emphasis is on bringing jobs to Illinois.

"Illinois is open for business," La Schiazza said. "This is a jobs bill with the recognition of a very, very competitive marketplace."

More Broadband Direct 5/07/10:
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•  Suddenlink adopts Toa workforce management system
•  MetroCast upgrades its Motorola CMTS
•  Comcast strengthens HD hand in Philly area
•  BigBand trims workforce as Q1 revenue drops
•  Tekelec buys Camiant, Blueslice
•  Harmonic snags Omneon for $274M
•  Survey: Silos still chokepoint for deploying services
•  Verizon touts core service, fiber optics
•  Questions linger over Ill. telecom overhaul bill
•  Panasonic reduces losses on sales recovery 

 

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