State Senate Bill Would Further Deregulate SBC
By Mary Wisniewski
Published April 12, 2005
Illinois lawmakers this week will debate a telecommunications bill SBC claims will move Illinois into the modern era -- and consumer advocates fear may lead to higher phone bills.
The bill, which is being discussed in the state Senate this week, would further deregulate what SBC can charge rivals and customers. It would also eliminate Illinois Commerce Commission service-related penalties that apply only to SBC.
To ease the transition, the Texas-based phone giant has propsed a three-year cap on the price of phone service for about half of its customers—those who purchase just a dial tone from SBC or a dial tone plus some common features, such as caller ID. The freeze wouldn't apply to customers who buy a bundled service, like a local phone line plus high-speed Internet service.
"We think it's time for the market to dictate pricing, rather than the government," said Carrie Hightman, president of SBC Illinois.
SBC also wants to ensure that the ICC couldn't force it to lease to competitiors its proposed fiber-optic network, a $4 billion project SBC plans to deploy to 18 million households by 2007. "Project Lightspeed" would provide television, data and voice service.
Hightman said the company can't invest in Illinois if state rules force it to lease the new infrastructure at a below-cost rate. SBC is lobbying for federal law, not state law, to govern how new technology infrastructure like fiber optics should be regulated or not regulated
As of Monday, the bill was before the Senate's Environment and Energy Committee. The Senate is expected to vote on the bill this week.
The Citizens Utility Board, a consumer watchdog group, fears the deregulation would cause prices to creep up for consumers, who are already confused by their phone bill.
"I think we would see a steady increase, because they'll keep raising prices to what the market will bear," said CUB Executive Director Martin Cohen.
CUB said SBC has little competition in local phone service, because it is the dominant player in Illinois, particulary since SBC agreed to buy rival AT&T Corp.
Hightman said SBC's real competition these days comes from cable television companies, cell phones and the growing use of Voice over Internet Protocol, or VoIP. She noted that between January 2000 and June of 2004, customers chose 3.6 million new wireless and 1.2 million broadband connections, while incumbent phone lines dropped 1.7 million. "All the growth is in the areas that are unregulated. We are basically shrinking, and we have regulatory requirements on us," Hightman said.
William Capraro Jr., CEO of business telecommunications provider CIMCO, said that SBC's bill would be a "major move in the wrong direction."
"They're essentially asking the General Assembly to eliminate the Illinois Commerce Commission as a governing body over SBC," said Capraro, whose 20-year-old company is based out of Oakbrook Terrace. "The ICC is there to protect consumers."
Rep. Julie Hamos (D-Evanston), chief sponsor of the 2001 telecommunications act that the new bill would amend, said that Illinois House Speaker Michael Madigan has become very involved in the discussions of the current telecommunications bill, and that legislators are still learning about the issues. "We're very much at the study stage," Hamos said.
Hamos said lawmakers must consider both the need to protect competition in the state, and SBC's desire is to invest in fiber optics.
"Some of us believe maybe we shouldn't do anything," Hamos said. "We'll know more in a year."