TELCO COMPETITION: THE LACK OF ESSENTIAL CONSUMER PROTECTIONS

1. TELCO COMPETITION: THE LACK OF ESSENTIAL CONSUMER PROTECTIONS Barbara R. Alexander Consumer Affairs Consultant 83 Wedgewood Dr. Winthrop, Maine 04364 (207)395-4143 E-mail: barbalex@ctel.net

2. ACKNOWLEDGEMENT FOR CONTENT • This presentation relies heavily upon and is a reflection of work of others, particularly Susan M. Baldwin and AARP • Those who want copies of recent papers Susan has done for AARP on COLR and VoIP should contact Coralette Hannon at channon@aarp.org

3. TELCO DEREGULATION: WHO IS IN CHARGE? NO ONE Due to federal/state jurisdictional complexity and ILEC moves to “deregulate” COLR obligation, essential consumer protections applicable to many competitive markets are missing: • Disclosures • Service Quality • Customer Service; Complaints • Unfair and deceptive marketing and contract terms

4. CONTRAST WITH ELECTRIC/GAS RESTRUCTURING • State regulators have licensing and consumer protection mandates to oversee conduct of alternative suppliers • Distribution utilities have default service obligation • Customer complaints and service quality oversight is intact with respect to utilities and suppliers

5. COLR AND UNIVERSAL SERVICE • The two are inextricably linked and elimination of COLR threatens achievement of long standing state and federal policy to ensure universal service • While proposals for elimination of COLR and deregulation rely on presence of “competition” and customer choice, in fact trend is toward less competition, not more!

6. DEREGULATION OF VoIP • Again, we have confusing state-federal jurisdictional issues (“fixed” and “nomadic”) • FCC “consumer protections” are insufficient and not a reflection of typical competitive market policies • Providers seek to eliminate state regulations and oversight • VoIP is not a minor niche: 32% of residential market served by non-ILEC providers of VoIP services; 5% ILEC VoIP lines

7. CALIFORNIA REPORT ON “GAPS EMERGE IN TELEPHONE CONSUMER PROTECTIONS” • No oversight or monitoring of prices and competition in fact rather than theory • No real complaint investigations and resolutions; focus on closing cases • No consumer information that allows informed selection of providers • Cramming is rampant; no real regulation of wireless carriers

8. AARP NATIONAL SURVEY: AGE 40 AND OLDER • 52% use landline over copper wires and 34% use cable provider • 80% said were not going to disconnect landline for wireless • Keep landline due to need for emergency and dependability and quality of calls compared to wireless http://www.aarp.org/home-family/personal-technology/info-05-2013/aarp-national-survey-of-residents-age-40---summary-of-opinions-o.html

9. NATURE OF “REFORM” DEBATE IS WRONG • Don’t eliminate COLR; redistribute its obligations • Restore market oversight with licensing and consumer protection policies for all carriers • Require service quality standards and reporting from all carriers • Unify and promote customer complaint handling

10. AGENDA • Adopt proactive regulatory structure for competitive market • The elimination of price regulation should not eliminate regulation • Retain price regulation of basic local service • Use licensing as gatekeeper and enforcement mechanism • COLR is crucial and should be retained, but obligation distributed

11. AGENDA (CON’T) • Adopt strict regulations and enforce prohibitions on cramming, slamming, rate increases without proper notice and consent • Service quality oversight for all providers • Ensure stand alone purchase for basic service • Resist obligation to purchase “bundle” to get what consumer wants • Effective complaint resolution