Ky. May Deregulate Land Line Service Amid Concerns


MANCHESTER, Ky. (AP) â¿¿ Americans are increasingly abandoning their land line telephones â¿¿ but not in Appalachia, where the foothills and peaks swallow cell phone signals.

Landis Cornett can't get service on his iPhone until he drives seven miles from his house.

"Supposedly somebody on the other end of the stretch was going to build a tower," said Cornett, a small business owner. "It never materialized."

Customers such as Cornett are worried about a bill in Kentucky's Legislature that would loosen requirements that telephone companies provide land line service to all customers. While protections for rural areas are built into the bill, opponents worry it could be the first step in a gradual erosion of service for customers in sparsely populated areas that are less profitable for phone companies.

Traditional phone providers such as AT&T argue the requirement is outdated and unfair, burdening them as they compete with wireless and cable companies that offer phone service but lack the same regulation. AT&T says the legislation would free up capital for them to bring more cell phone signals and Internet service to rural areas such as Manchester, which is 90 miles southeast of Lexington.

AT&T is pushing for the bill, which also would affect two other companies that offer land line service in the state, Cincinnati Bell and Windstream.

Lawmakers have until the end of Tuesday, the last day of this year's legislative session, to vote on the bill.

Since 2009, nine states have limited or eliminated basic-service requirements, according to Sherry Lichtenberg of the National Regulatory Research Institute, an organization that serves state utility regulators.

"I'm not aware of any terrible things that have happened so far," she said, referring to fears that rural areas could be left without service. "But I think we need to caveat that because so far is not a whole lot of time."

Lichtenberg said some states have found a way to relax basic-service regulations while maintaining consumer protections.

Missouri, for example, dropped basic-service requirements for the large metropolitan areas of St. Louis and Kansas City, but retained them in less populous areas, according to a 2012 National Regulatory Research Institute report.

Kentucky's proposal frees a telephone company from having to provide basic service except in areas with fewer than 5,000 housing units. In those areas, companies no longer have to provide basic land line service if competitors offer alternative voice services, such as broadband supported phone lines or wireless.

Still, some like Cornett say any weakening of the service requirement is worrisome.

"My feeling on it is that once you start down that slippery slope, it's so easy to pass the next bill that eliminates (the basic service requirement) altogether," Cornett said.

Tom FitzGerald, of the consumer advocate group Kentucky Resources Council, argues that the bill would leave consumers with phone service that is "less reliable and less functional than existing land line phone service."

Others doubt AT&T's commitment to provide land line service or build cell towers in rural areas.

"These areas are expensive to service and they have a low rate of return," said Harold Feld, senior vice president of Public Knowledge, a Washington, D.C.-based consumer rights group. "You just don't make enough money to want to provide anything approaching service that we would consider necessary and decent."

In Kentucky, 11 percent of adults live in land line-only households, according to a Center for Disease Control and Prevention survey published in October.

Meanwhile, across the country nearly 35 percent of households use only wireless phones, according to the survey.

AT&T says it's saddled with the cost of providing basic service while newer competitors, such as wireless carriers and cable companies, don't face those requirements. The company said it won't abandon anybody.

"If a provider can't provide an affordable and reliable service, they're going to lose customers," Brad Rateike, an AT&T spokesman, said. "And that's the last thing they want to do."

Rateike added that the legislation will bring better voice service to rural Kentucky_not less.

"Removing the obligation to invest in old technologies frees up capital to invest in new technologies," he said.

Sen. Paul Hornback, R-Shelbyville, said he wrote the bill in hopes that the rural areas of his district would gain more access to broadband internet and wireless phone service.

"I told opponents to the bill to bring me one person in the other states who has lost their connection and didn't have adequate service," he said. "I've been asking that for 18 months now and they haven't produced that one person."

The bill has cleared the Republican-led Senate. But the House, which has a Democratic majority, has so far blocked it from a vote because of concerns about rural customers.

Sen. Robin Webb, D-Grayson, voted no.

"I'm here to protect all aspects of my citizenry and the population, especially those who are the most vulnerable and can't afford to get broadband," she said.

Folks in Manchester said they would ditch their land lines if they could.

Linda and Doug Abner live 2 miles outside of town, where they have trouble getting reception.

Doug often finds a signal on the porch. Linda goes to an upstairs closet with a window.

"We realize what the future's bringing. And we're all for that," Doug Abner said. "I would love not to have a land line. But at this point I really feel like I need one."

Mark Radford, 33, a youth minister at a local church, lives a few miles farther outside of town. His wife's cell phone catches a signal only at the kitchen counter.

"I don't know anybody who doesn't have a land line," Radford said.

Copyright 2011 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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