At&T; Drops Battle On Deregulation Bill

One of the nation’s largest long-distance telephone providers advised lawmakers on Monday that it was dropping its opposition to a telephone deregulation bill on condition that a more specific determination of competition is added to the House-passed version.

“While we have the concerns I’ve expressed, we feel this will be a considerable improvement,” AT&T spokeswoman Linda Adams told the Senate State Affairs Committee.

The committee took two hours of testimony in anticipation of a vote Wednesday clearing the bill for Senate adoption of the change that House State Affairs Chairman Ron Crane, R-Nampa, said he was certain would be ratified by the House.

“There was lots of give and take by all sides,” Crane said. “No side is really happy with the legislation.”

The bill is intended to conform state law to the requirements of federal telecommunications deregulation passed by Congress a year ago to injecting competition into local exchange operations.

Critics claim that it will raise residential rates and undermine the longstanding crusade to achieve universal service. But supporters warned the committee that rates will rise one way or the other because the introduction of competition will end the subsidies residential rates have traditionally enjoyed.

They also called the proposition merely a first step in deregulation with major decisions still to be made on a number of issues including universal service.

“Oversimplified greatly, this bill makes competition legal. It doesn’t make it a reality,” former state Public Utilities Commission member Joe Miller, now representing MCI, told the committee.

Among the bill’s major provisions:

The Public Utilities Commission will regulate rates for local telephone service until it determines that effective competition is present. Then rates will be deregulated.

Revenue from other sources, such as the Yellow Pages, may not be used to subsidize the cost of providing local services.

Rural telephone companies are essentially exempt for up to five years to give them time to accommodate the prospect of outside competition.

Outside companies have two ways to get into a local market. They can build their own facilities or they can buy access from the existing carrier at 15 to 25 percent below the carrier’s normal charges as set by state regulators.

The change to be made by the Senate specifically states that effective competition must include more than the mere presence of a company willing to resell the access they buy at discount from the local exchange.

Regulators must determine that a significant number of customers have both service provider and options choices and that competition be substantive and meaningful.