AP: Telecom deregulation bill passes House; heads to Senate

2/19/2013

TOPEKA (AP) — Kansas would lessen its regulation of telecommunications but begin to phase out consumer-financed subsidies for universal land-line service under a bill approved Monday by the state House.

TOPEKA (AP) — Kansas would lessen its regulation of telecommunications but begin to phase out consumer-financed subsidies for universal land-line service under a bill approved Monday by the state House.

The House’s 118-1 vote sends the measure to the Senate, where it also is expected to have bipartisan support.

The bill follows up on laws enacted within the past decade to move Kansas away from regulating rates for telephone service as consumers rely more heavily on wireless devices. The measure also results from an agreement between AT&T Inc., the state’s largest phone service provider, and other telecommunications companies.

“It largely reflects what we’re seeing in society — increased use of cellphones, decreased use of land lines,” said Senate Utilities Committee Chairman Pat Apple, a Louisburg Republican whose panel will take up the measure next. “There are more options, and with more options come competition.”

In the House, the only “no” vote came from freshman Rep. Larry Hibbard, a Toronto Republican, who said land lines are vital in some rural areas, and they could see their rates rise. He also suggested that many elderly Kansans still find wireless devices too confusing to use.

“This bill may come back to haunt rural Kansas,” Hibbard said.

A 2006 state law deregulated prices for bundles of services that included wireless, Internet access, cable television or other video and moved toward deregulating rates for local service in exchanges where competition existed. A 2011 law went further, allowing companies to avoid most state price caps. This year’s bill allows those companies to avoid even the Kansas Corporation Commission’s consumer protection regulations and minimum quality-of-service standards.

The bill also represents a significant shift away from state subsidies to companies so that the firms can bring adequate land lines to even the most remote and sparsely populated rural areas. The subsidies, in place since 1997, are financed with a charge on customers’ monthly land line and wireless bills.

The current universal service charge is 6.42 percent, which is expected to raise almost $63 million from March through February 2014. Under the bill, companies can choose to operate under lesser state regulation but would see their subsidies decline, and some supporters of the bill believe the special charge could disappear altogether in four years.

“We have this mentality, if I don’t have a wire, I can’t make a phone call. That’s not true,” said Rep. Scott Schwab, an Olathe Republican who supports the bill. “That copper line is being replaced with an antenna, and it’s more reliable.”

Republican Gov. Sam Brownback would have to carefully review the measure if legislators pass it, spokeswoman Sherriene Jones-Sontag said.

“However, he does have a long history of pushing for deregulation of telecommunications,” she said.

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