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TELCO COMPETITION: THE LACK OF ESSENTIAL CONSUMER

PROTECTIONS

Barbara R. AlexanderConsumer Affairs Consultant83 Wedgewood Dr.Winthrop, Maine 04364 (207)395-4143E-mail: barbalex@ctel.net

ACKNOWLEDGEMENT FOR CONTENT

This presentation relies heavily upon and is a reflection of work of others, particularly Susan M. Baldwin and AARP

Those who want copies of recent papers Susan has done for AARP on COLR and VoIP should contact Coralette Hannon at channon@aarp.org

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TELCO DEREGULATION: WHO IS IN CHARGE? NO ONE

Due to federal/state jurisdictional complexity and ILEC moves to “deregulate” COLR obligation, essential consumer protections applicable to many competitive markets are missing:

Disclosures Service Quality Customer Service; Complaints Unfair and deceptive marketing and contract

terms

CONTRAST WITH ELECTRIC/GAS RESTRUCTURING

State regulators have licensing and consumer protection mandates to oversee conduct of alternative suppliers

Distribution utilities have default service obligation

Customer complaints and service quality oversight is intact with respect to utilities and suppliers

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COLR AND UNIVERSAL SERVICE

The two are inextricably linked and elimination of COLR threatens achievement of long standing state and federal policy to ensure universal service

While proposals for elimination of COLR and deregulation rely on presence of “competition” and customer choice, in fact trend is toward less competition, not more!

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DEREGULATION OF VoIP

Again, we have confusing state-federal jurisdictional issues (“fixed” and “nomadic”)

FCC “consumer protections” are insufficient and not a reflection of typical competitive market policies

Providers seek to eliminate state regulations and oversight

VoIP is not a minor niche: 32% of residential market served by non-ILEC providers of VoIP services; 5% ILEC VoIP lines

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CALIFORNIA REPORT ON “GAPS EMERGE IN TELEPHONE CONSUMER PROTECTIONS”

No oversight or monitoring of prices and competition in fact rather than theory

No real complaint investigations and resolutions; focus on closing cases

No consumer information that allows informed selection of providers

Cramming is rampant; no real regulation of wireless carriers

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AARP NATIONAL SURVEY: AGE 40 AND OLDER

52% use landline over copper wires and 34% use cable provider

80% said were not going to disconnect landline for wireless

Keep landline due to need for emergency and dependability and quality of calls compared to wireless

http://www.aarp.org/home-family/personal-technology/info-05-2013/aarp-national-survey-of-residents-age-40---summary-of-opinions-o.html

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NATURE OF “REFORM” DEBATE IS WRONG

Don’t eliminate COLR; redistribute its obligations

Restore market oversight with licensing and consumer protection policies for all carriers

Require service quality standards and reporting from all carriers

Unify and promote customer complaint handling

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AGENDA

Adopt proactive regulatory structure for competitive market

The elimination of price regulation should not eliminate regulation

Retain price regulation of basic local service

Use licensing as gatekeeper and enforcement mechanism

COLR is crucial and should be retained, but obligation distributed

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AGENDA (CON’T)

Adopt strict regulations and enforce prohibitions on cramming, slamming, rate increases without proper notice and consent

Service quality oversight for all providers

Ensure stand alone purchase for basic service

Resist obligation to purchase “bundle” to get what consumer wants

Effective complaint resolution

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