Consumer Groups Oppose Ohio Phone Deregulation

Consumer groups banded together Friday to oppose Ohio legislation that would deregulate basic landline telephone service, saying it would increase rates, weaken consumer protections and decrease service quality.

Organizations including the Ohio Consumers' Counsel and AARP Ohio said at news conference that the House and Senate bills — pushed by Democratic and Republican lawmakers — would be most harmful to older Ohioans who live on fixed incomes and rely on basic landline telephone service to remain connected with others, including emergency responders.

But lawmakers and the telephone industry say the deregulation is needed to make Ohio competitive with other states and to create jobs at a time when landline telephones are losing market share to wireless services.

"There's been an explosion in voice competition both in Ohio and across the country," said Ohio Telecom Association President Charley Moses. "Those shifts have been seismic. This bill gets us closer to our competitors."

Moses said the industry has gone from having 7 million landline customers in 2001 to 4 million today, while wireless — which doesn't have to meet the same regulations — now has 9.4 million customers.

Consumers' Counsel Janine Migden-Ostrander said she didn't see the logic in the industry's arguments for the bill because it doesn't make sense to raise rates when increased competition is the goal. She noted that most companies' return for shareholders has been consistently solid each year, while the companies haven't been adding employees.

"There's not one provision in this bill we think is of benefit to consumers," Migden-Ostrander said.

The legislation would enable phone companies to boost their basic service by $1.25 each year without having to show that competition exists in the area, enabling AT&T's basic service, for example, to go from $14.25 to $18 — a 26 percent increase — over three years. Currently, the companies must demonstrate that competition exists before the $1.25 increase — which is a cap — can be approved. Moses said the explosion of growth in wireless service clearly shows that competition exists.