Telecom bill to come off hold

By Margaret Newkirk

The Atlanta Journal-Constitution

A controversial telecommunications bill is expected to move again in the state Senate as early as today.

What’s unknown: Whether and how HB 168’s Senate sponsor, Sen. David Shafer, will amend language that the governor and state Public Service Commission say weakens consumer protections for AT&T phone customers.

The bill was speeding ahead until early March, when Gov. Sonny Perdue signaled displeasure with its consumer protection language.

Current law allows the state Public Service Commission to resolve consumer complaints on AT&T’s land line phone business.

HB 168 says only that it can “receive” those complaints.

In an e-mail Friday, Shafer said the bill’s backers were “working with the Governor and the PSC to make sure customers are fully protected.”

A spokesman for Perdue’s office said the governor had yet to see an amendment but continued to communicate his office's concerns.

HB 168 has become one of the most heavily lobbied bills in this year’s legislative session, pitting an alliance of AT&T and rural telephone companies against the cable industry.

AT&T describes it as a sweeping modernization of the state’s telecommunications industry, which treats all players in the voice communications industry equally.

AT&T's land line business is one of the few voice competitors still bound at least partially by state regulation. It also remains obligated to serve all customers and receives public financial support for doing that.

Company spokeswoman Sage Rhodes said that obligation won’t change under HB 168. But she said AT&T customers will see new promotions and bundled products that the company can't offer under current law, among other changes.

“All participants in a competitive market should be regulated in the same fashion,” Rhodes said. “HB 168 will make sure all voice competitors are regulated on a level playing field.”

AT&T and Shafer have defended the bill's consumer language on the same grounds. The PSC doesn't get involved in consumer cable complaints, for instance.

The cable industry is HB 168's major industry opponent. It says the bill removes too much accountability from AT&T and forces cable to subsidize both AT&T and rural phone companies.

“We are being asked to subsidize the same companies we are trying to compete against,” said Stephen Loftin, director of the Cable Television Association.

The argument stems from the bill’s treatment of rural phone companies.

Originally intended to end a 15-year program of state financial help for rural phone companies, HB 168 morphed in the Senate.

It now preserves state rural subsidies for up to 20 years, but it requires more regulatory oversight in exchange. Cable companies don't want to continue paying for that.

The rural subsidies have grown from $1.7 million in 2004 to $9 million last year, for 15 companies. Rural phone operators asked for nearly $13 million this year.

The bill also reduces the “access” fees rural companies charge AT&T for connecting calls to their systems, which AT&T contends is a much larger, hidden subsidy.

It adds a new transition fund to compensate the rural companies for the revenue loss and requires cable companies to share in the cost of that.

The new fund will swell total direct state subsidies to $31 million in the program's fifth year, before ratcheting back down, according to a PSC bill analysis.

Cable companies say they will pay more for the fund than they benefit from the reduced fees, and that the bill creates "profit insurance" for rural phone companies.

The governor’s concerns emerged the first week of March, when the Senate version of the bill went back to the House.

The PSC also flagged the weaker consumer protection language, which it says would not allow the agency to enforce rules. Of the $323,237 in credits and refunds the PSC got for consumers of all utilities last year, nearly half – or $145,650 – went to AT&T customers, according to the commission.

Sometimes, said commissioner Stan Wise, "we need that hammer."

The consumer group Georgia Watch also wants the law's original language kept intact, saying the bill leaves AT&T consumers with no recourse.