Ohio Consumer Advocates, Industry Battle over New Telecom Rules

The Office of Ohio Consumers Counsel warned that consumers can expect rate increase as the new rules allow telephone companies more flexibility in raising rates for basic telephone services, said OCC’s Marty Berkowitz. The rules allow phone companies to raise monthly rates on basic service by up to $1.25 per month, or a total of $15 a year, said Jeff Jones, chief of the telecom section with Ohio Public Utilities Commission’s legal department. There’s a whole chapter of consumer protection rules under the new law and many protection rules remained, he said. But residential landline customers’ service quality will no longer be protected under the Minimum Telephone Service Standards, first adopted in 1977 by the Ohio Public Utilities Commission, Berkowitz said. Among the protections that were changed: Companies will now have 72 hours to restore telephone service after an interruption, up from 24 hours. Many of the consumer protections apply only to those with basic service from a landline provider and not to those who have bundled services, Berkowitz said.

Consumer advocates also criticized the new Lifeline rules, saying the two-year exemption from rate increase is too short. The new rules extend the Lifeline program to all 42 traditional telephone service providers, up from the current three providers, said Allen Francis, the PUC’s telecom chief. A statewide Lifeline board to develop an outreach program to ensure low-income customers will receive the benefits will be created before the end of first half of this year, he said. The board will include members from industry, the PUC and the consumers office, he said. Additionally, at the end of the exemption period, the program will be assessed by a committee including members from the consumers’ counsel, PUC, the House and Senate leadership and industry representation, he said. The committee will also study the impact of the law and issue its report by Sept. 13, 2014, Berkowitz said. OCC urges consumers to forward information concerning the effects of the new law to its office to be considered as part of its review, he said.

Industry supports the new rules. A major goal of the new law was to better reflect current conditions and ensure competitiveness, said Charles Moses, president of the Ohio Telecom Association. He said the traditional landline providers in the state have lost nearly half of their customers since 2001. Since the new law passed in June, the state has seen some 25 new investment projects related to improving access to new telecom technologies, said Technology for Ohio’s Tomorrow, whose advisory council includes AT&T. Among the largest investors are Frontier, which is deploying broadband at a cost of $150 million over three years, and AT&T, which is building a new $120 million data center, the group said. It said the investment would create more than 8,000 jobs in the telecom industry in the state.

The new rules streamlined the regulatory process, said the PUC’s Francis. The telecom market in Ohio is competitive and the new rules shift from a rate-of-return pricing regime to a market-based one, he said. Meanwhile, the state has a wait-and-see attitude on jurisdiction over VoIP services, Jones said. The commission still has pretty much the same authority over telecom service, but the old law is more restrictive, Jones said. The state has some authority regarding VoIP providers’ contribution to the Universal Service Fund, but on general VoIP jurisdiction issues, the state still has a wait-and-see attitude because it’s an issue that the FCC hasn’t clarified, he said.