NC Lawmakers May End Local Phone Company Oversight

"In theory, there is a great deal of competition out there. But most citizens don't know there is an opportunity to change their phone company," said Rep. Paul Luebke, D-Durham. "Why would we want to deregulate. How are we benefiting consumers by deregulation?"

The bill would allow newly freed phone companies to set their own prices, except for stand-alone basic residential service. Rate increases for basic service would be limited to inflation adjustments. Rural customers also could not be charged more than urban customers for basic service.

The Utilities Commission regulates telephone, electricity, natural gas, water and other utilities that are allowed to operate as local monopolies because it didn't make sense for competing companies to each install their own lines or pipes. The regulated companies are guaranteed a fair profit, but only after the commission looks at the firms' costs and decides on a fair rate.

The old monopoly for local phone service no longer exists when the state's 7 million wireless phones are twice as many as all land lines, said Clifton Metcalf, a spokesman for AT&T, the state's largest provider with 1.7 million access lines.

"It's not possible for consumers to get the full benefit of a competitive marketplace when that marketplace is impacted by rules that were in place to regulate a monopoly industry that no longer exists," Metcalf said.