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Landline Phone Deregulation to Deny Protection to Illinois Consumers

Illinois has enacted a law that will take away a necessary protection for landline phone consumers. SB 107 strips away the authority of the Illinois Commerce Commission to ensure that landline phone users — residing in 78 percent of households in the state - receive reliable and affordable phone service.

Under the law, Internet-based phone services would be completely unregulated.  The ICC has been instrumental in promoting universal access to telecommunications services in the state, as mandated by the state’s Telecommunications Act that was last updated in 2001. It required a service provider to offer high-speed Internet access to at least 90 percent of homes outside of the Chicago Metropolitan area. This newly enacted law eliminates such requirement and the ability of Illinoisans to access affordable High-Speed Internet services. Consequently, the law threatens to reduce investment in broadband that could make the state more competitive in the global market.

Supporters of the law say that it will create competition and profits that will in turn translate into the creation of new jobs and services. However, a review of the bill reveals that employment generation is nowhere in its contents. Labor representatives in other states have confirmed that deregulation of telephony has driven down employment in the industry.

Moreover, a decrease in oversight is likely to result in higher costs for phone usage.  Even supporters have acknowledged that prices for services could increase. Quality will also be affected by the law. Instead of requiring repair of landline service within 24 hours, the waiting window will be extended to 30 hours. Further, consumers will be unable to lawfully demand service quality standards from telecommunications companies.

Other Deregulation Attempts Blocked in Colorado and Wisconsin:  A similar bill in Colorado, which was thankfully vetoed by the Governor, threatened to deregulate basic telephone service and negatively affect pricing and service quality. HB 1281 would have removed all authority from the Colorado Public Utilities Commission to regulate phone services. The bill would have also stripped away price and service-quality guarantees overseen by the Colorado PUC. In Wisconsin, SB 469 was introduced to also deregulate landline telephone business and leave residents, especially from rural areas, without adequate service.  Consumer groups in Wisconsin have also voiced their concern that less regulation could lead to less investments in broadband infrastructure.

Massive Rate Hikes in California Following Deregulation:  After abandoning oversight of the telecommunications, California consumers experienced hikes ranging from 50 to 276 percent in the following features: select custom calling services, local directory assistance, fees for returned checks, local toll rates, fees for having an unlisted numbers, and fees for late payments.  And the promise to a competitive playing field that would create jobs and increase customer choices has not occurred.

Resources:
Citizens Utility Board - Talking points on rewriting Illinois’ Telecommunications Act
Chicago Tribune - New Illinois Law Relaxes Phone Regulations
Denver Post - Consumer Group Fears Bill May Spur Phone-Service Deregulation
Public News Service - AARP Blasts “Future of Phone Service” Deregulation Bill on Gov’s Desk
Utility Consumers' Action Network - California's Telco Deregulation Fiasco: Finding Alternative Phone Service in a Competitive Wasteland
Stop the Cap! - Wisconsin Deregulation Follies: AT&T Wants State to Make the Same Mistake All Over Again