SPRINGFIELD—On May 31st, the Illinois General Assembly passed legislation that will keep current telecommunication regulations in place until 2007. Senator Clayborn and Representative Brosnahan’s Telecommunications bill thwarts SBC’s attempt to eliminate consumer protections and critical ICC oversight of the industry.
The National telecom giant SBC pushed the Illinois state legislature to deregulate the local telephone market in Illinois and throw out all the consumer protections and price controls established in the 2001 Illinois Telecommunications Act. SBC’s Telecommunications Deregulations bill would have declared the telephone market in Illinois competitive. This when MCI and AT&T have left the market and the Federal Government is dismantling regulations that give small and medium sized phone service providers access to the local market.
“The General Assembly decided to keep the highly successful consumer protections of the 2001 Telecommunications Act in place at a time when SBC and Verizon are buying competitors, the FCC is making it much harder to compete with SBC, and new technologies are so expensive and unreliable” Illinois PIRG consumer advocate John Gaudette said. "This is a significant victory for the consumers of Illinois. Despite major lobbying by SBC, Verizon, and a number of telecom industry groups, the consumer groups were strong enough to stop them from ramming this through both chambers."
These protections are needed now more than ever. SBC is claiming that it is no longer a monopoly and that it is facing substantial competition from cross-technology competitors, like wireless phones and VOIP over cable lines. The truth is that Illinois’ market is far from competitive.
Basic wireless service is two to three times more expensive than a landline, and the quality of service varies depending on your location and provider. Also, wireless service continues to be a source of significant customer dissatisfaction related to truth in billing and truth in marketing (number one source of complaints to AG and number two source of complaints to Better Business Bureau). Finally, SBC owns the largest wireless company, Cingular, and recently took over AT&T wireless, highlighting the shrinking choices within the wireless market.
Voice over Internet is four to five times more expensive than a landline, requiring high speed internet access. According to the most recent numbers, households with internet access have leveled off at 60%. Of those without internet access, 80% earn less than $50,000 and only 96% earn less than $25,000. Also, of the 98,000 new subscriptions per month to VOiP, an average of 48,000 customers have cancelled service.
Though exciting, Voice over Internet is years away from being a viable alternative for most Illinois consumers. Also, since SBC controls most of the DSL provisioning in Illinois and requires its DSL customers to use SBC voice services, VoiP offers very little in the form of competition.
With the passing of the 2001 Telecommunications Act, we saw a 92% decrease in customer complaints, 32% faster installation time, 50% drop in local phone service monthly costs, and an increase in competition with 29% of businesses and 17% of Illinois households moving to an SBC competitor.
