PA Deregulation Bill Will Hurt Rural Broadband Access and Increase Phone Rates

Stephen Herzenberg |

There has been a wave of deregulation bills introduced in statehouses across the country in recent years, and the latest in Pennsylvania is targeting landline telephone service. The plan could end up limiting access to broadband service in rural parts of the commonwealth and sharply increasing telephone rates.

Those are two of the findings in a new report from the Keystone Research Center on HB 1608, which gets a public airing next week before the Pennsylvania House Consumer Affairs Committee.

Like similar bills in other states, HB 1608 is structured to increase the profits of telecommunications companies while raising phone rates and putting quality telephone service at risk in Pennsylvania. It also leaves rural parts of the commonwealth on the wrong side of the digital divide by threatening their access to broadband. Pennsylvania needs next-generation broadband in all communities, not deregulation that locks in substandard rural service.

Phone deregulation in other states has led to significant increases in rates for consumers. In neighboring Ohio, rates have increased $1.25 per month (the maximum rate allowed) since passage of the state’s 2010 deregulation law. In Illinois, another state similar to Pennsylvania, AT&T increased line charge rates by up to 63 percent following passage of a deregulation law. In California, some rates increased by several hundred percent.

The bill allows telephone companies in Pennsylvania to raise rates with only one day’s advance notice by largely eliminating the Public Utility Commission’s oversight of basic telephone service in Pennsylvania. After years of price stability for Pennsylvania telephone consumers, it will likely lead to significant price increases across the state.

The bill also:

  • abandons rural communities by permitting telephone carriers to eliminate service to consumers they do not want to serve, beginning in 2018;
  • eliminates critical consumer protections, reporting requirements that allow consumers to compare phone rates, auditing requirements that ensure phone company accountability, and quality of service requirements; and
  • removes public oversight of telecommunications companies’ mergers and acquisitions.

Like many forms of rushed deregulation, HB 1608 is a bad deal for Pennsylvanians, and lawmakers should reject it. It will raise phone rates for consumers, undermine effective consumer protections, and take away the ability of state regulators to ensure Pennsylvanians have competitive options over the long term.