When state lawmakers want to put makeup on ugly legislation, they phony up the name. But calling a bad telephone deregulation bill the "Consumer Choice and Protection Act" cannot cover up its flaws. It is designed to boost the telephone companies' bottom lines, not protect consumers who are looking to expand their choices. A key Senate committee, which killed and then resurrected the bill this week, should kill it for good.
The legislation (SB 2626/HB 1465) would make it easier for phone providers to charge their customers more by narrowing what constitutes basic phone service. Now customers who opt for no-frills service have their rate increases capped at no more than the annual inflation rate minus 1 percent. With some carriers, customers can have basic service plus caller ID or call waiting within that price class. But the bill would automatically bump basic customers who add a feature, such as caller ID, into the "nonbasic" pricing category. That is where providers under current law may raise rates on one day's notice by between 6 percent and 20 percent a year. The bill would also bump all businesses with single lines, and residences with multiple basic lines, into the costlier category.
The bill could force millions of Floridians — especially the elderly and those on moderate incomes — to face the threat of double-digit price increases with little notice. And even as the bill seeks to move more customers into the higher tier, it would remove the state's ability to enforce service standards on these customers' behalf. The bill would remove the Public Service Commission's authority to settle service complaints or to compel repairs for nonbasic services. It would make it easier for phone companies to increase rates and service fees and hide them from the public. Telecom companies could buy and sell their facilities without state approval. The state would no longer cap rates for operator assistance. And phone companies would no longer be required to inform customers of the cheapest plan available unless that customer expressly requested basic service from the start.
The big legacy providers, such as Verizon, argue that the state needs to level the regulatory playing field between traditional carriers and newer telephone service providers in the cable, Internet and other markets. But while the number of traditional land lines is down as more people use their cell phone as their only phone, the state acknowledged last year in its most recent market study that land lines were "still the leading telecommunications choice for households in Florida." And of the 9.3-million land lines in use in Florida, about one-fourth of residential customers manage just fine on basic service. Those customers tend to earn less than $40,000 per year and to be aged 61 and older. So this legislation is penalizing older Floridians of modest means who use the least amount of telephone services.
This handout to the phone industry would be indefensible in a flush economy; it boggles the mind to see it proposed amid a worsening recession. The bill's Senate supporters have offered to reduce the maximum 20 percent rate increases to 10 percent. But discounting the increases by half only shows how much money is at stake and how desperate Senate sponsors are to ram through any pricing scheme that will stick. The proposal to expand discounted services for seniors and the poor also is meaningless; it would come just as the state makes it easier for phone companies to charge these very people more.
Sen. Victor Crist, R-Tampa, was right to vote against the bill in the Senate Commerce Committee this week and effectively kill it. But he showed the wrong allegiance by agreeing to resurrect the bill as a "courtesy" to his colleagues. His allegiance should be to his constituents, not to his standing in the Senate. Crist and Sen. Charlie Justice, D-St. Petersburg, should join to defeat the bill when it comes up again Tuesday in the Commerce Committee.