Phone companies debate law changes

JEFFERSON CITY, Mo. -- While large phone companies say a bill recently approved by the Missouri Legislature to revise state telecommunications regulations will increase competition and benefit consumers, smaller players say it will have the opposite effect.

Because of tremendous technological changes in the industry over the last decade, supporters of the bill claim many of Missouri's telecommunications laws are obsolete.

Marsha Haskell, the regional director of external affairs in Cape Girardeau for SBC, said consumers will be the winners under the legislation, which Gov. Matt Blunt is expected to sign into law.

"With passage of the bill, now companies like SBC can focus more on consumers and less on regulation," Haskell said.

In general, the measure will give phone companies more flexibility to set rates in markets deemed competitive by the Missouri Public Service Commission, which regulates the industry.

Most of the debate over the legislation revolved around a single word: "existing."

Under current law, phone companies can offer special discounted rates to new customers or to former customers who have switched to another service provider. However, companies are prohibited from offering discounted rates to customers they already have in order to retain their business. The bill will allow companies to extend those special rates to "existing" customers.

The major phone companies behind the change say it will allow consumers greater ability to secure the best deal. Smaller companies and cable providers seeking to enter the voice communications market, however, argue that rather than enhancing competition it will actually stifle it.

New players in a market often build a foothold by offering lower rates than the incumbent company. If established providers can can match the offer to customers thinking of leaving, that will scare off competitors from making the substantial capital investments needed to enter a market, opponents of the change claim.

SEMO Communications president Tyrone Garrett, who testified against the bill before a House committee, said it will prevent competition from developing in many small rural markets.

"That particular word is going to make it difficult for any new entrant in a market to gain market share," Garrett said. "It will cut down on capital investment."

Garrett's Sikeston-based company provides cable and high-speed Internet service in many of Southeast Missouri's smallest towns and will begin to offer phone service through its cable lines sometime in the summer. Because the company has already purchased the necessary equipment, the bill will not alter those plans, Garrett said.

Haskell said consumers are going to gravitate to the company providing the best service at the lowest rate, regardless of size.

"We need to put the focus on consumers and putting consumers in the driver's seat," Haskell said.

One provision Garrett likes clarifies that cable companies, just like other utilities, can install their lines on highway rights of way controlled by the Missouri Department of Transportation. Cable providers and MoDOT had long assumed they had such access until a court recently ruled a state law governing the issue didn't extend to cable companies.

"That was a very important issue to the cable industry that needed to be taken care of," Garrett said.

The bill is SB 237.

mpowers@semissourian.com

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