Verizon, AT&T push to end universal landline service

Reuters

The guarantee of landline telephone service at almost any address, a legal right many Americans may not even know they have, is quietly being legislated away in U.S. state capitals. AT&T and Verizon, the dominant telephone companies, want to end their 99-year-old universal service obligation known as "provider of last resort." They say universal landline service is a costly and unfair anachronism that is no longer justified because of a competitive market for voice services.


The new rules AT&T (Dallas, Texas, USA) and Verizon (New York) drafted would enhance profits by letting them serve only the customers they want. Their focus, and that of smaller phone companies that have the same universal service obligation, is on well-populated areas where people can afford profitable packages that combine telephone, Internet and cable television.


Sprint (Overland Park, Kan., USA), T-Mobile USA (Bellevue, Wash., USA) and the cell phone divisions of AT&T and Verizon are not subject to universal service and can serve only those areas they find profitable.


Unless the new rules are written very carefully, millions of people, urban and rural, will lose basic telephone service or be forced to pay much more for calls.


Florida, North Carolina, Texas and Wisconsin already have repealed universal service obligations. No one has been cut off yet, but once almost every state has ended universal service it could mean that some parts of the landline system may shut down.


Years of subtle incremental legal changes have brought the telephone companies within sight of ending universal service, which began in 1913 when AT&T President Theodore Vail promised "one system, one policy, universal service" in return for keeping Ma Bell's monopoly.


AT&T wants universal service obligations to end wherever two or more voice services are available, said Joel Lubin, AT&T's public policy vice president. Verizon promotes a similar approach.


State capitals are seeing intense lobbying to end universal service obligations but with little public awareness due to the dwindling ranks of statehouse reporters.


The Utility Rate Network, a consumer advocate group, identified 120 AT&T lobbyists in Sacramento, one per California lawmaker. Mary Pat Regan, president of AT&T Kentucky, told me she has 36 lobbyists in that state working on the company's bill to end universal landline service.


People whose landline service ends would have three options. First would be a cell phone, a reasonable substitute in many areas. But cell phones do not work in many rural expanses. Cell phones cost at least $25 for limited minutes, while lifeline services - which the companies offer to low-income people - start at $2 and, with unlimited local calls, at about $10.


Second would be Internet calling. That requires broadband Internet service. Verizon charges $49.99, plus additional charges by unregulated calling companies like Vonage, whose rates start at $25.99. On top of this $75 expense would be taxes and the cost of buying and maintaining a computer, a device alien to many older and poor Americans.


Third would be satellite service. Thomas Hazlett, a George Mason University economist who studies rural phone costs, says satellite service is "the way to go for service in outlying areas." Although, satellite does requires a computer, costs at least $29.95 and many users have complained about unauthorized charges and connection problems.

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