Consumer advocates prep for looming telecom battle

Staff Report

Top consumer advocates on Tuesday, Dec. 16, united to block an expected legislative push by big telecom companies that would allow for the elimination of low-cost home phone service in Illinois, as polling conducted on behalf of AARP shows strong support for Springfield leadership to protect reliable and affordable home phones.

The poll findings were released as AARP Illinois and the Citizens Utility Board (CUB) launched a “Save Our Service (SOS) Campaign” ahead of the General Assembly’s 2015 session.

The Illinois Telecommunications Act is up for review, and the telecom industry is expected to renew efforts to scrap state requirements to provide access to affordable home phone service. More than 1 million landlines are in Illinois, according to the Federal Communications Commission (FCC), serving some of Illinois’ most vulnerable citizens.

CUB and AARP urged Illinoisans to visit www.SaveOurPhoneService.com to send a message to legislators about this issue.

AT&T, which made $18 billion in 2013, has led the charge in Illinois for phone deregulation. Nationally, the phone industry has pushed a business model that would allow it to stop providing landline service, leaving customers with substitutes that tend to be more expensive and less reliable, such as AT&T’s computer-based U-Verse or wireless alternatives. As part of that strategy, AT&T will likely seek an end to the CUB-created Consumer’s Choice calling plans, which are Illinois’ best local phone deals.

According to the survey conducted on behalf of AARP by Hart/North Star Opinion Research, 64 percent of respondents said they wanted the governor to “protect reliable, affordable landline service in Illinois.” Almost half of the respondents — 48 percent — said they use traditional phone service nearly always or most of the time. That rose to 53 percent for Illinoisans 65-74, and up to 71 percent for older consumers. The survey, conducted in July, polled 802 Illinois residents ages 50 and older who were likely to vote in the Nov. 4 election.

Landlines are lifelines for countless older Illinoisans and their families,” said Gerardo Cardenas, AARP communications director. “This summer, Illinois voters sent a clear message regarding traditional home phone service, and we urge policymakers in Springfield to ensure consumers have access to quality, affordable, reliable landlines, regardless of where they live.”

CUB Executive Director David Kolata said: “Smartphones are wonderful technology, but they don’t come cheap, and anybody who has traveled across Illinois knows they’re not always reliable. Traditional home phone service is the most affordable, reliable option for millions of people, and we shouldn’t take away that choice.”

Consumer advocates are concerned that a revision of the state’s Telecommunications Act would:

• Scrap the “Obligation to Serve” requirement. This mandates companies provide home phone service throughout Illinois. Lifting it would mean top local phone companies, such as AT&T and Frontier, could abandon areas they deem “unprofitable.”

• Abolish “Safe Harbor” calling plans. Currently, Illinois mandates that AT&T offer the no-frills “Consumer’s Choice” plans, which range from about $3 to $20 per month and were originally created by CUB under a legal settlement with AT&T. Designed to match the way most callers use the phone, these plans are under a price freeze mandated by the General Assembly and have saved Illinois consumers an estimated $10 million a year.

Forcing consumers to use computer-based or wireless substitutes as their primary home phones could subject them to higher bills and service degradation that still plague such options, including lack of service in extended power outages, checkered reception, dropped calls and high connection charges (up to $199 for computer-based phones).

For many Illinoisans, a landline is still synonymous with home phone service, particularly among older and more rural demographics. Even in households that also use mobile phones, traditional home service can be the most reliable and affordable lifeline to family, friends and vital services such as 911, home security systems and some medical monitoring devices.

Given 2014 developments in the Internet and cellphone industries, consumer advocates also are concerned about the impact of eliminating key consumer protections in the Telecom Act. Recently, Verizon agreed to pay about $64 million as part of a class-action lawsuit accusing it of overcharging customers on its Family Share Plan. T-Mobile has been sued by the Federal Trade Commission (FTC), which accused the company of making “hundreds of millions” of dollars off fraudulent “cramming” charges added to wireless bills by unscrupulous third parties. AT&T this year entered into a $100 million settlement with federal and state officials, including Illinois Attorney General Lisa Madigan (D), on the cramming issue — and it has been sued by the FTC for allegedly improperly slowing Internet speeds for customers.

In addition, last month, the FCC began a rule-making process that raises concerns about how to protect residential and small-business customers, including their ability to call 911 during an extended power outage. With such concerns being addressed federally, consumer advocates said it’s premature to make a major revision to the Illinois Telecommunications Act.

AARP is a nonprofit, nonpartisan organization, with a membership of nearly 38 million, that helps people turn their goals and dreams into real possibilities, strengthens communities and fights for the issues that matter most to families such as health care, employment and income security, retirement planning, affordable utilities and protection from financial abuse. AARP has staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands. Learn more at www.aarp.org.

CUB is Illinois’ leading nonprofit utility watchdog organization. Created by the Illinois Legislature, CUB opened its doors in 1984 to represent the interests of residential and small-business utility customers. Since then, CUB has saved consumers more than $20 billion by helping to block rate hikes and secure refunds. For more information, call CUB’s Consumer Hotline at 1-800-669-5556 or visit www.CitizensUtilityBoard.org.

From the Dec. 17-23, 2014, issue

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