Telecommunications & Telephone
Consumers Bill of Rights

Opinion:
Telecommunications in Pennsylvania

By Dina Mendros, Director of Communications, Citizens for Consumer Justice 

If you are like most Pennsylvanian�s, you depend on having reliable, affordable, quality telephone service. Our telephones are our lifelines. Our most vulnerable populations, like the sick and elderly who can�t easily leave their homes, are especially dependent on their telephones as their link to the outside world. And as the world seems more and more threatening, the reliability of our telecommunications systems become ever more imperative.

But here in Pennsylvania the dependability of local telephone service is at issue. If you�ve had problems with your telephone service and trouble getting it resolved, it comes as no surprise. The Pennsylvania Office of the Consumer Advocate receives numerous complaints from consumers who have trouble resolving service problems with their local telephone service provider. You may even have been a victim of deliberate Verizon PA corporate policies. For instance, there is a internal company program known as �Stop the Trucks� in which dispatchers are encouraged to not send trucks out for residential and small business service calls. By discouraging consumers from requesting service, Verizon PA lowers its operating costs and increases its profit. While Verizon PA, the largest local telephone service provider in the state, has been able to reap unprecedented profits from Pennsylvania customers through deregulation, consumers have suffered increasingly worse service, resulting from the closing of facilities  and workforce reductions. 

How did we get in this mess? In 1993 the Pennsylvania General Assembly enacted Chapter 30 of the Public Utility Code that, in essence, deregulated local telephone service. Under Chapter 30, incumbent local telephone service providers already doing business in the state were allowed to earn unlimited profits, with the understanding that consumers were supposed to get something back in return. One return was to allow competitor local telephone service providers to enter the market, that would ostensibly lead to lower prices. Another return was to be that the increased profit would be reinvested in the building of a high-speed digital broadband network through out our Commonwealth. This high-speed broadband network was to be deployed in rural and urban areas alike, and was to position Pennsylvania ahead of the country as a leader of advanced telecommunications systems. Ideally the outcome would be job creation in the telecommunications sector and other industries that could take advantage of this high-speed Internet access. Instead, the ability to earn unlimited profits led to increasing attention to the bottom line. In order to earn more profit, cost cuts such as the elimination of jobs and the closing of telephone service facilities were put in place. The result for consumers has been declining service. Also, as many know, we haven�t seen the deployment of broadband service in many areas of the state. 

This begs the question, where did the money go? While much of the financial facts are not publicly released, it�s not rocket science to realize that if the promised broadband hasn�t been delivered, and if Pennsylvania facilities have closed and the workforce reduced, the profits must be leaving Pennsylvania and not being used to benefit customers.  Instead, increased profits from hard-working Pennsylvanians have been used to finance investments in other parts of the country and the world many of which have been written off as losses by Verizon PA. Also, despite the company�s ability to earn increased revenue, Verizon PA is now trying to renege on its deal to deploy broadband in areas of the state that are unprofitable and instead wants state government to foot the bill.

Now, our state officials are starting to pay attention.

 The Public Utilities Commission recently instructed Verizon PA to recalculate its wholesale rates for its unbundled network elements (UNE rates). This is the price that Verizon PA charges competitors to lease portions of their network so that consumers can have a choice among local telephone service providers. Competitors claim that the company�s rates are too high and that they make competition unprofitable in all but the most populated areas of the state. Verizon PA, on the other hand, claims that it is selling access to its network at a loss and wants the PUC to increase the rates it charges to its competitors. It is imperative for an independent source to determine the exact costs of the network elements so that the PUC can structure fair UNE rates.

 Also, Chapter 30 will Sunset in December 2003. While that may seem like a long time away, hearings began over the summer to review how the law has worked to date and what if any changes should be made when legislators review the law next year. According to Chapter 30, Verizon PA and other incumbent telephone service providers have until 2015 to build out the digital broadband network throughout the state. Critics are arguing both that the incumbents are far behind in building out the network and also that the network should be completed before 2015.

And finally, consumers are getting involved. Citizens for Consumer Justice (CCJ) is starting a campaign to improve local telephone service in the state and hold Verizon PA and other incumbent telephone service providers accountable to improve service and deploy the digital broadband network they promised almost 10 years ago. If you�ve had problems with your local telephone service provide, CCJ wants to know about it and is taking calls on its toll free number (1-877-841-9976) and emails on its website (www.ccjustice.org).

Pennsylvania ratepayers held up their end of the bargain by paying the phone bills despite declining services, now it�s time for consumers to make the phone companies hold up their end.