A proposed deregulation bill intended to help Ohio’s landline telephone companies is on its way to Gov. John Kasich’s desk, despite critics’ hang-ups that it would open the door to major rate hikes.
House Bill 402, which passed the Ohio House and Senate by large margins last week, would allow annual base rate hikes of up to $2 per month for landlines, instead of the current limit of $1.25 per month. In addition, most, if not all, phone companies could seek state permission for unlimited rate increases starting four years after the bill becomes law.
The legislation would also allow local telephone companies to merge without state approval (though federal permission is still needed), no longer require phone companies to pay triple damages for state violations, and weaken Ohio’s policy to ensure the availability of basic phone service everywhere in the state, among other changes.
As cell-phone use skyrockets, Ohio’s telecom industry says state regulations — which haven’t been touched since 2010 — need to be upgraded to keep help local telephone companies in business. A 2017 Ohio Telecom Association report found that phone companies in the state have lost 80 percent of their landline customers since 2000.
“The bill modernizes state policy and helps level the playing field for all providers in response to explosive competition we’ve seen in the past decade,” said Jon Kelly, outside counsel for AT&T, in written Ohio Senate Public Utilities Committee testimony late last month. “When many of the current rules were written, companies like the OTA members were treated as monopolies. They no longer fit that monopoly, public utility model.”
Brian Hill, a Zanesville Republican who introduced the bill in the Ohio House before being appointed to the state Senate last week, testified to the Senate committee that local landline phone companies are at a competitive disadvantage with wireless companies, who don’t have to follow the state’s “outdated, burdensome regulations.”
Ohio is the only Midwestern state with such a tight cap on rate hikes, Hill continued, making it difficult for phone companies to pay for service upgrades.
“This bill will provide Ohio’s local phone companies with the ability to increase their service offerings to customers and expand investment into their networks in many underserved areas,” Hill said in written testimony.
But Terry Etter with the Office of the Ohio Consumers’ Counsel told the committee that telephone companies have already won significant deregulation over the past 30 years or so.
“The bill’s elimination of the law’s remaining bare-bones price protection for consumers is not needed for telephone companies,” Etter testified. “And it would be bad for Ohioans who use and depend upon basic phone service.”
Basic service customers are often the elderly or the poor who are able to afford the service through federal discounts, Etter added.
The Office of the Ohio Consumers’ Counsel, as well as AARP Ohio, have each sent a letter to Kasich asking him to veto the bill.
“This bill is a step backward …and demonstrates that the opinions of phone corporations, able to make campaign contributions, are more important than addressing Ohio’s barriers to widespread broadband adoption,” AARP Ohio State Director Barbara Sykes stated in her letter to the governor.