Industry view of HF1066/SF736: allowing competitive landscape within telecom regulation

I’m pleased to have a guest blog today…

There is a lot of discussion that the telecom industry is trying to deregulate telephone service and this will adversely impact consumers and the deployment of Broadband in Minnesota. HF1066/SF736 is not about deregulation – it is about allowing a competitive landscape within telecom regulation. These bills allow incumbent telecommunication providers to be regulated like our competitors. The regulatory scheme that exists today dates back to the 1980s. Consolidated Telephone Company “CTC” currently serves all of our customers with the same network, yet our incumbent telephone lines are regulated differently than our competitive telephone lines; this just doesn’t make sense today. It is necessary for our governing laws to progress as rapidly as our technology landscape has progressed today. This bill is simple. It allows telecommunications companies to be regulated the same way with the same rules as all landline providers, not just the incumbents.

I continue to hear that price protection would end and incumbent telephone companies would be able to charge and raise prices as they desire. Incumbent carriers are governed by the FCC (Federal Communications Commission). In 2011 the FCC’s Transformation Order forced incumbent telephone companies to raise rates to our landline telephone service. This was governance and regulation that increased the national “rate floor.” Likewise, this is the same situation that happened in all states, including Illinois, Texas and California. Deregulation is not the cause of the rate hikes, yet it was the 2011 FCC Transformation Order that implemented increases. For CTC and many other Telcos, another “rate floor” increase is looming. At CTC, we struggle with the idea of forcing a rate increase based on this Order. Each time this occurs, CTC loses landlines and people migrate to their cell phones, which equates to a loss of revenue for a service that we have been fully invested in with intense capital expenditures. Companies like CTC actively sell and market for landline customers. We certainly do not strategize on ways to churn this line of business.

The key points of this Competitive Market Regulation Bill include:

  • All existing consumer protection is maintained. 911 and assistance for communication impaired and low income persons are maintained.
  • Basic and wholesale telecommunication services and obligations remain regulated.
  • The MN PUC (Public Utilities Commission) will continue to resolve disputes, as they do today, with wholesale and resale providers.
  • The bill establishes a process by which an ILEC (incumbent local exchange carrier) can petition the MN PUC for reduced regulation, the same as their competitors. This process requires the ILEC to provide data to prove there is competition that justifies lesser regulation.

There is known misperception about how consumer protections would remain intact. First and foremost, it is important to stress that this bill only addresses landline telephone service. This bill does not address Internet or Video regulation. With that, it is clear that the PUC in Minnesota would still govern all of the rules, rates and classifications used by a carrier to conduct its local service (Minn. R 7812.2210, subp. 2). The MNPUC would also receive the complaints and has the right to order a carrier to change a price or pricing practice if the commission determines the following:

  • The price or pricing practice unreasonably restricts resale violation.
  • The price or pricing practice is unreasonably discriminatory.
  • The price or practice is deceptive, misleading, and fraudulent or is otherwise unlawful under state or federal law.
  • The price or pricing practice will impede the development of fair and reasonable competition or reflects the absence of an effectively competitive market.
  • The price or pricing practice has caused or will result in substantial customer harm (Minn. R. 7812.2210, subp. 8).

Additionally, all anti-slamming and anti-cramming regulations remain unchanged (Minn. Stat. 237.661 and 325F.693 and Minn. Stat. 237.665).

CTC has been active in pursuing this bill that has bipartisan support. CTC also has the clear understanding that we would be subject to the same governance from the Minnesota Public Utilities Commission as we have been for decades. These bills would simply make it an even playing field for all landline providers while ALL consumer protections are still in place.

Kristi Westbrock
Chief Operating Officer
Consolidated Telephone Company
Brainerd, Minnesota

This entry was posted in MN, Policy, Vendors by Ann Treacy. Bookmark the permalink.

About Ann Treacy

I have a Master’s Degree in Library and Information Science. I have been interested or involved in providing access to information through the Internet since 1994, when I worked for Minnesota’s first Internet service provider. I am pleased to be a part of the Blandin on Broadband Team. I also work with MN Coalition on Government Information, Minnesota Rural Partners, and the American Society for Information Science and Technology.

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