Telecom Deregulation: How Much Is Too Much?

The recent weather-related outages and service interruptions have some Democratic legislators arguing that a bill to deregulate the state's telecom and cable industries goes too far, stripping away consumer protection.

They also say that the proposed legislation can leave seniors and people with disabilities at risk.

Chief among the critics is state Sen. Bob Smith (D-Middlesex). Joined by state Sen. Loretta Weinberg (D-Bergen), as well as representatives of the AARP and New Jersey Citizen Action, Smith yesterday introduced new legislation, S-3062, that he claims will remedy the shortcomings of a bill proposed this past spring and expected to be approved during the lame duck session.

For his part, state Sen. Raymond Lesniak (D-Union) is standing behind the original bill, A-3766, which he proposed.

Both measures aim to make the telecom industry more competitive in New Jersey by removing deregulations that are no longer necessary. Despite that common goal, the bills are very different.

The Lesniak bill does not require companies to provide special low-rate landline service or public access channels. It also eliminates the requirement that companies correct billing errors and provide a credit for cable outages over four hours. It does stipulate that providers continue to offer 911 service.

Backed by business interests around the state as well as Verizon and cable companies, the measure is touted as eliminating burdensome rules that stifle economic growth. Consumer advocates, however, say it will leave customers with no recourse if they encounter problems with service quality, billing, and other issues.

"This is not a matter of eliminating red tape or unnecessary regulation," said Stefanie Brand, director of the Division of Rate Counsel at a legislative hearing on the bill earlier this year. "If the legislature enacts this legislation, it will be leaving consumers on their own when dealing with telephone and cable companies."

Smith's bill, in contrast, requires telecom companies to provide specially priced landline service for low- and moderate-income customers. It also stipulates that companies repair any landline services damaged by extreme weather. Further, it calls for cable providers to continue to offer municipal public access channels. Finally, it preserves the BPU's oversight of the telecomm industry.

For its part, Verizon argues that some of the oversight written into Smith's bill is unnecessary.

Verizon Communications said the fears that deregulation would cause phone companies to raise their rates were unfounded.

What's more, even under Lesniak's plan, elderly and disabled citizens in need of subsidized utilities would still be eligible for the Lifeline program. Verizon indicated it was working to make its voice heard in the legislature about how the relevant legislation could be amended to move New Jersey in the right direction.

Verizon also said that predictions that cable companies would cancel public channels if not legally bound to continue them were unfounded, indicating that offering public channels helps make companies like Verizon be competitive.

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