Kentucky Senate Approves Phone Deregulation Bill

Supporters said deregulation would encourage phone carriers to spend more money expanding high-speed broadband networks rather than maintaining outdated land lines.

by John Cheves, Lexington Herald-Leader / March 3, 2015
The Kentucky Senate voted March 2 to send the long-controversial phone deregulation measure to Gov. Steve Beshear (pictured), who has endorsed it. Flickr/Steve Beshear

(Tribune News Service) — Don't get attached to those land lines.

The Kentucky Senate voted 30-3 Monday to send a long-controversial phone deregulation measure to Gov. Steve Beshear, who has endorsed it. Supporters said deregulation would encourage phone carriers to spend more money expanding high-speed broadband networks rather than maintaining outdated land lines. Opponents said the bill doesn't require any investments by the carriers, and it would force Kentuckians with basic land-line phone service to be upgraded to costlier and less reliable options.

The bill's opponents managed to block it in the House for several years, citing consumer protection concerns. Yet thousands of Kentuckians voluntarily drop their land lines every month in favor of a wireless future, the bill's Senate sponsor, Sen. Paul Hornback, told his colleagues Monday.

"You know, it's been a long time in waiting to get this bill. I've been working on this four years now," Hornback, R-Shelbyville, said. "This bill, by holding it back two or three years, it's untold how many jobs were lost, how many millions or even how many billions of dollars in investment we lost in this state."

House Bill 152 — nicknamed the AT&T bill for the company that lobbied for it — would largely strip the Kentucky Public Service Commission of its oversight of phone service and end the legal obligation of phone carriers AT&T, Windstream and Cincinnati Bell to provide basic phone service in urban and suburban areas, including Lexington, Georgetown, Richmond, Nicholasville and Frankfort. The companies instead could provide phone service through a wireless plan or an Internet protocol-based technology, which converts voices into a digital signal that travels over the Internet and then is reconverted at the other end.

Rural customers could ask to stick with their land lines, but the companies would not be required to extend basic service to new developments.

AT&T has spent more than $183,000 lobbying the General Assembly since January 2014. Its political action committee has given $112,800 to state politicians since 2010, mostly to dozens of legislators and to Beshear. The governor recently described the bill as "an important piece of legislation that strikes a right balance between providing consumer protection and creating economic development opportunities that result from robust broadband accessibility in communities all across the commonwealth."

In a prepared statement Monday, AT&T Kentucky president Hood Harris said: "As the first bill to pass the 2015 General Assembly, the importance of this legislation is abundantly clear. Consumers in Kentucky will benefit from this legislation as it takes an essential step toward increased investment in new technologies in the commonwealth, and as the governor has already expressed his strong support for this legislation, we look forward to his prompt action on the bill."

Tom FitzGerald, director of the Kentucky Resources Council, tried to introduce a wrinkle into the debate Monday. He submitted a letter from the Alarm Industry Communications Committee in Vienna, Va., raising concerns about wireless phone service not being compatible with some phone-connected alarm systems. But most senators dismissed it, first in a specially called vote by the Senate Economic Development Committee and then, minutes later, in a floor vote.

"A lot of the bugaboos we're hearing here are the same bugaboos we were hearing about moving from analog to digital," Sen. Perry Clark, D-Louisville, said during the committee hearing.

One of the few "no" votes came from Sen. Robin Webb, D-Grayson. Webb said the bill was meant to benefit a lucrative monopoly by stripping the state PSC of its oversight authority to protect consumers. Even as AT&T pushes for state deregulation in Frankfort, it is fighting in Washington to weaken the power of the Federal Communications Commission, Webb said.

Even without this legislation, "this monopoly is doing quite well," Webb said. "They've invested in Kentucky, and they'll continue to."

©2015 the Lexington Herald-Leader (Lexington, Ky.) Distributed by Tribune Content Agency, LLC