Telecommunications reform (HB 168) was amended in the Georgia State Senate to protect the Public Service Commission’s authority to resolve consumer complaints against providers of old-fashioned telephone service.
Good politics, perhaps, but PSC jurisdiction for consumer issues is redundant since the Governor’s Office of Consumer Affairs already protects consumers. And although it may sound counterintuitive, PSC authority can actually harm consumers by restraining full and fair competition. That’s because the PSC only has jurisdiction to resolve consumer complaints affecting wireline telephone service, but not wireless or VoIP services with which they compete. If the PSC isn’t careful, it can create unequal marketplace advantages and burdens depending on the type of technology competitors use to deliver their services.
Nevertheless, HB 168 clears away numerous regulatory artifacts which seriously challenge incumbent local exchange carriers from competing and threaten private investment in broadband.
Every resident of Georgia should have access to broadband, which offers new opportunities to get a job or start a business. One study claims that over 70,000 jobs and $3.9 billion in economic impact could be created in Georgia annually from a reasonably-achievable 7 percent increase in broadband adoption. Education, health care and financial services are sectors of the economy which are particularly well-positioned to benefit from increased investment in broadband. Unnecessary and anticompetitive legacy regulation compromises investment by depressing industry valuations.
One of the key features of HB 168 eliminates rural telephone subsidies hidden in the intrastate access charges assessed on long distance calls within the state. The subsidies are unsustainable in a competitive market and must be reduced. HB 168 has been criticized for not moving fast enough. The Atlanta Journal-Constitution, for example, notes that payouts to rural telephone companies will be protected for 20 years in exchange for more PSC oversight. Moreover, the payouts will swell from $1.7 million in 2004 to $31 million per year before ratcheting back down. It should be noted, however, that HB 168 will eventually save Georgia consumers $60 million per year they now pay to subsidize rural telephone service while preventing rate shock in rural areas.
HB 168 is a major improvement compared to the antiquated statutes and regulation Georgia has now. The bill is awaiting concurrence in the House of Representatives and the Governor’s signature.