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Au contraire: Dayton’s stance on Internet voice service is right on the money

Minnesota law, common sense, and reasonable public policy do not support the dismantling of the still relevant assurance through regulation of universal, affordable, and reliable service.

Rep. Tim Sanders’ June 20 MinnPost commentary defends his Voice-over-Internet Protocol (“VoIP”) deregulation bill while characterizing Gov. Mark Dayton’s opposition “unfounded” and Legal Aid and AARP Minnesota’s opposition as “false alarms.” With all due respect, Dayton’s opposition is well-founded and it is Sanders’ deregulation bill that would in fact “burn down the house.”

Rep. Sheldon Johnson

The telecommunications industry continues to serve an essential and enduring public-interest function, fostering economic and social commerce, and protecting the health, safety, and security of all Minnesotans. Sanders’ bill undermines these bedrock public-interest goals.

What Minnesotans could lose

Minnesotans using VoIP phone companies would lose much under his bill: the assurance of reliable service; a dispute resolution forum; protections against price discrimination and illegal bill charges, to name just a few.

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Moreover, there would be no protection against the refusal to serve or disconnect customers a company deems “unprofitable.” This is not speculative. In Mississippi, where a similar bill passed, the phone company there immediately changed its customer contract to allow immediate disconnection – with no notice whatsoever. This is clearly cause for alarm.

In contrast to Sanders’ assertions, all is not well in deregulation land. Complaints about telephone service filed with the Federal Trade Commission since deregulation have skyrocketed, now placing fourth among industries. And in California – touted as the shining example – documented failures to meet basic service restoration times and concerns about whether customers will be able to reach 911 have prompted an investigation by regulators.

Speculative, nonguaranteed promises

The main argument in favor of the bill is its promise to expand rural broadband (and the threat to disinvest in Minnesota if the bill is not passed). But the promises are speculative, unsupported, nonguaranteed, and often do not materialize. In fact, the CEO of the bill’s primary proponent – AT&T – admitted: “[W]e’ve all been trying to find a broadband solution that [is] economically viable to get out to rural America and we’re not finding one to be quite candid.” Let’s recap: the VoIP deregulation bill guarantees loss of universal service, affordability, reliability and consumer protections, but contains no guarantee of any actual investment and no accountability for the failure to invest. What a deal!

The Minnesota Legislature just enacted the Century Link restructuring bill, which provides regulatory relief for incumbent local phone providers to help level the playing field with VoIP and other competitors. The Century Link bill struck the appropriate balance, giving the industry the relief it sought while ensuring every household in Minnesota has access to affordable, reliable local phone service without any loss of consumer protections. The VoIP deregulation bill would undo this compromise, recreating the unlevel playing field the Century Link bill just eliminated. VOIP is not a service; it is a means to provide it. According it special treatment is unjustified.

Deregulation would overturn landmark PUC ruling

Finally, passage of the VoIP deregulation bill would overturn a landmark PUC ruling in the Charter VoIP case. In the middle of the night several years ago, Charter secretly moved all 100,000 of its customers to an unregulated affiliate. The Department of Commerce filed a complaint, and the PUC ruled VoIP phone service is subject to the same rules of the road as other jurisdictional local phone service providers. The cable industry has appealed, and the case is now before the federal courts. Any interference in this judicial process by the Legislature would be an inappropriate jurisdictional encroachment.

The 21st century phone system is technologically changing the way in which telephone service is delivered, but not its fundamental nature. Further, telephone service is a lifeline for older consumers and vulnerable citizens, especially those who rely on their phone for emergency purposes and to stay connected to their family, friends, and communities. Minnesota law, common sense, and reasonable public policy do not support the dismantling of the time-honored and still relevant assurance through regulation of universal, affordable, and reliable service, and of the maintenance of vital consumer protections. If anything, the rapidly evolving technology requires even more vigilance to ensure that these principles do not become collateral damage as the industry evolves.

Rep. Sheldon Johnson, DFL-St. Paul, has chaired several committees focused on telecommunications policy, including the Subcommittee on Telecommunications Regulation and Infrastructure.


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