AT&T Wants To Be Let Off the Hook For Kentucky Local Service Requirement

Feb 3, 2015

The so-called “AT&T deregulation” bill is back at the Kentucky General Assembly after failing to make it out of the House last year. It was approved by the Senate.

Among other things, the bill would strip major telephone service providers like AT&T, Windstream and Cincinnati Bell of a requirement to offer basic telephone service in markets of more than 15,000 people. The basic plans include local calls, 911 and operator service.

The companies would still be required to offer services in markets of 15,000 people or fewer.

This year the bill has 22 co-sponsors and one of the bill’s biggest opponents is no longer in leadership. Former House Speaker Pro Tem Larry Clark, a Democrat from Louisville, had opposed the legislation in past sessions, saying it would hurt rural and poor consumers.

The Herald-Leader reported that AT&T spent $108,846 lobbying for the bill last year.

Tom FitzGerald, director of advocacy group Kentucky Resources Council, said that by not offering basic local service, AT&T is trying to force customers onto their more lucrative plans.

“The problem is [AT&T has] customers who only want the basic services and that’s not their business model,” FitzGerald said. “They don’t want to have to serve them anymore. They want to serve the folks who want the product that they can up sell.”

Instead of using phone lines, AT&T wants to transition to phone service using voice over IP (VoIP) technology. Critics like FitzGerald and the AARP lobbied against the law last year, saying that VOIP technology isn’t reliable enough yet. They say landlines are still necessary for home-security systems and some medical alerts.

In an op-ed published on their website, AT&T Kentucky President Hood Harris tried to quell fears that consumers would lose their service.

Despite what you may have heard, this new legislation will not remove landlines from rural homes or businesses. Instead, this legislation puts those customers in charge of deciding which communications services they want and need. If you are a rural customer, for example, you may choose to join the nearly 40 percent of Kentuckians who already have moved on from landline home phones and gone only with a wireless phone, or you may choose a landline phone that’s provided over the Internet (known as Voice over Internet Protocol, or VoIP), or you may choose both a VoIP and a wireless service. But you do not have to – you can keep your existing landline phone if you like. Under this legislation, the choice is yours.

In the present version of the bill, rural users who currently have basic plans will not have their service shut off as long as they remain at the same residence. If the customer moves to a new residence, however, the carrier will only be obligated to provide service if that utility originallyinstalled the landline. In many cases, AT&T purchased those lines from BellSouth.

From the present version of HB 158, Section 1.4.b:

In response to a request for service at a location to which the modifying utility has not installed landline facilities to provide basic local exchange service, the modifying utility shall offer voice service either directly or through an affiliate. The modifying utility is not obligated to offer basic local exchange service at the location.

FitzGerald argued that, as the bill is presently worded, carriers wouldn’t be required to provide basic local service.