Tennessee: Senate OKs proposal to deregulate AT&T bills

NASHVILLE — Senators voted overwhelmingly Monday night to deregulate prices for AT&T’s basic telephone service in Tennessee, a move critics say could lead to price jumps for elderly consumers who still rely on it and other services such as directory assistance.

The heavily lobbied bill passed on a 22-7 vote despite a request from some lawmakers, uneasy with critics’ contentions, that the bill be delayed to let officials with the Tennessee Regulatory Authority, which currently regulates portions of AT&T’s service, answer questions.

“I’m not going to let it be crammed down my throat,” said Sen. Joe Haynes, D-Nashville, arguing for the bill’s delay, later adding that “the question is what are we trying to cover up?”

Sen. Paul Stanley, R-Collierville, said, “I’m not trying to cram anything down anyone’s throat.” He said he was prepared to answer any questions himself. He and Sen. Dewayne Bunch, R-Cleveland, dismissed assertions the bill would allow AT&T to increase fees as it pleases on regional calling such as calls between Cleveland, which is in Bradley County, and Chattanooga, which is in Hamilton.

The bill is scheduled to come up for debate in the House Commerce Committee today. The lead House sponsor is Rep. Gerald McCormick, R-Chattanooga.

Sen. Stanley, the Senate Commerce Committee chairman, said the century-old monopoly once enjoyed by AT&T is a thing of the past and the company needs to be freed to compete in a fast-changing world where cable, Internet companies and cell phones are eating it its landline business.

“It is a consumer benefit,” Sen. Stanley argued.

But Sen. Charlotte Burks, D-Monterey, countered that TRA officials recently told Senate Commerce Committee members that the legislation could lead to increases. Those same concerns have been raised by Tennessee Attorney General Robert Cooper’s office, which represents consumers before the TRA, as well as the Tennessee Chapter of AARP, a seniors group.

“I think at this time we don’t need to be doing anything to raise rates,” she said.

AT&T says competition with Comcast and Verizon cellular service will keep its rates down.

“We were obviously happy that the bill was passed by the Senate,” AT&T Tennessee President Gregg Morton said. “We’re one step closer to at least getting close to how our competitors are treated here in the state of Tennessee. We’re still going to be more heavily regulated than our competitors, but we’re at least making progress in the new competitive environment.”

In a nod to rural interests, the bill delays for one year any rate changes in most rural areas. After that, AT&T would have to convince the TRA that there was sufficient competition to allow it to move from its current price regulation model. But if the TRA refuses, AT&T could move unilaterally to raise rates in 2015.

The TRA will still hear consumer complaints and will also referee anti-competitive disputes between AT&T and competitors who use AT&T lines.

TRA Director Sara Kyle said in an interview last week that with some of the compromises, the AT&T-backed bill is “better than it was. But still, you’ve seen so much concerns and questions. I still feel the step-by-step process that we have at the TRA would better handle the deregulation.”

She said AT&T “will have the ability to raise rates,” but she said she could not say “whether they will or not.”

AT&T’s Mr. Morton said the company needs to compete with rivals and is not interested in raising rates.

The AARP’s Patrick Willard said that “while the bill has been improved ... I think we still have fundamental concerns that this is going to impact the services that seniors and low-income groups rely on and that these basic services could see an increase in the future.”