Report: Altering law benefits state

Landline directive at issue for AT&T
Timothy Boone
The Advocate
October 22, 2013
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The Louisiana Public Service Commission is considering a change that would drop AT&T’s obligation to provide landline telephone service to homes, a move that one group said will free up the company to concentrate on improving broadband service

Hance Haney, director of technology and democracy project for the Discovery Institute, a Seattle think tank, said by removing the carrier of last resort provision, AT&T won’t bear the cost of maintaining existing technology.

Telecommunications companies are investing almost half of their annual capital expenditure budgets on legacy technology, Haney said.

Haney co-wrote a white paper with George Glider, a senior fellow at the institute, that said by expanding broadband service in Louisiana, the state can create jobs.

The growth would take place not only in the telecommunications industry, but in manufacturing and service companies, especially in finance, education and health care.

They cite a Brookings Institute study that established methodology to predict 4,000 private non-farm jobs will be created across Louisiana for every 1 percentage point increase in broadband penetration.

According to the report, 30 percent of Louisiana households have broadband connections of 4 megabits or higher, the speed the Federal Communications Commission said is the minimum speed generally required for using video-rich applications and services, while retaining enough capacity for basic web browsing and e-mail.

The bare-bones broadband plans offered around metro Baton Rouge have download speeds between 3 megabits and 5 megabits.

If Louisiana’s broadband penetration were increased from 30 percent to the national average of 45 percent, this would equate to approximately 60,000 jobs created or saved in the state, Haney said.

“Being the carrier of last resort siphons away from broadband,” Haney said. He said traditional telephone switches take up entire city blocks, while a switch for Voice over Internet Protocol is about the size of a refrigerator.

In its filing with the PSC, AT&T said consumers have a range of choices for phone service: wireless, cable and satellite providers all offer the ability to make and receive calls.

And while the number of housing units in Louisiana increased from 8.5 percent from December 1999 to December 2012, residential land lines dropped by 63.1 percent.

In recent years, several states have dropped their universal landline requirement, Haney said, including Florida, Georgia, Tennessee, Illinois, Texas and Wisconsin.

Those efforts have been heavily backed by telecommunications companies.

Some consumer advocates have voiced concern, saying homeowners aren’t guaranteed affordable rates for phone service and residents in rural areas could have problems with dropped calls. But Haney said technological improvements have made the quality of service more dependable, even in remote areas. “It’s virtually impossible to tell if you are talking on a VoIP,” he said. “The service is that good.”

The PSC staff is set to issue its final recommendation on AT&T’s request to drop the carrier of last resort provision on Nov. 1. That would allow the issue to come up for consideration at the Nov. 13 meeting.

AT&T officials would not discuss how much they would invest in broadband if the carrier of last resort provision is overturned.

“AT&T Louisiana has its own history of responding proactively to this positive and competitive environment,” said Bob Corney, a company spokesman. “In the last three years alone, AT&T has invested more than $1.2 billion in our Louisiana wired and wireless networks.”