REPUBLICANS KILL CONSUMER TELECOM PROVISIONS
HARRISBURG, November 15, 2004 – Pro-consumer amendments proposed by Senate Democrats to a major telecommunications bill were rejected today in the Appropriations Committee on near party-line votes.
The Republican majority refused to adopt three provisions that would have strengthened the rights of customers and enhanced the benefits of competition in the telecom industry. The votes against the Senate Democrats’ amendments offered to HB 30 were 14-8, 14-8 and 13-9, with just one Republican voting for one amendment. The bill was then reported out of committee to be considered on the Senate floor.
"The Republicans sided today with large telecom giants such as Verizon and against average telephone customers," said Senator Vince Fumo (D-Philadelphia), the sponsor of the amendments. "This is a one-sided bill that entrenches Verizon’s position as a monopoly."
Fumo said Democrats will ask Gov. Ed Rendell to veto the bill if it reaches his desk.
"This is nothing more than a horrible, anti-consumer Republican favor to big business," he said.
The legislation being considered would re-authorize Chapter 30 of Pennsylvania Telecommunications Code, which governs telecommunications. The changes the Democrats sought were as follows:
Remove Application of Inflation-Offset Language upon filing of Network Modernization Plan – In its current form, the bill permits a company that files a network modernization plan to immediately increase its rates for non-competitive services by 2.5% - 3% per year – resulting, in the estimation of the PUC, in a $2.9 billion windfall for Verizon. (It is worth noting that network modernization is something that Verizon committed to provide 10 years ago.) The proposed amendment would allowed the company to increase rates for non-competitive services beyond the inflation off-set limitation only after a determination by the PUC that it has met its commitment to network modernization.
Adds competitive service network unbundling requirement – This amendment would require incumbent telecom companies such as Verizon to sell services "unbundled," or separately, to competitive local carriers. The unamended version of the bill would allow companies such as Verizon to force other companies to buy a package of services in order to gain access to the telecom network. The ability of competitive providers to meet the needs of business customers is entirely dependant on their ability to lease portions of the local exchange providers network system. The failure to include this provision will effectively eliminate the existing business model of these companies.
Eliminate Rate-Rebalancing – This amendment prohibits any local exchange provider from raising the rates of basic service, such as local phone service, in any year beyond a percentage amount that is greater than the rate of inflation. This amendment would prevent local exchange providers from raising the rates of non-competitive services to subsidize or offset the pricing of competitive retail services.