April 14, 2008

Qwest Proposes to Deregulate and Raise Phone Rates

Oregon's largest phone company, Qwest, has proposed a radical plan to immediately raise rates and deregulate phone services over the next three years. Once rates are fully deregulated the phone company would be able to add additional rate hikes. Of course, the company pretends that their proposal does not deregulate rates, but that is nonsense. Under Qwest's plan, the Public Utility Commission of Oregon would no longer have the power to establish rates that are "just and reasonable," which has been the basis for establishing regulated utility rates for decades.

Under Qwest's proposal, rates for basic local phone service would be allowed to increase immediately by $2/month or 15.6%. Rates for Extended Area Service would remain where they are and all other retail services would be deregulated, allowing unlimited rate increases.

While Qwest does not specify what it would do with these prices after deregulation, we know that they intend to raise rates. In Washington, Qwest got a similar plan passed and immediately raised rates significantly. Based on the Washington experience, these are the increases that CUB expects would happen were the Qwest proposal to be approved.

Service & Increase
* Residential Telephone Line: 15.63%
* Residential Measured Telephone Line: 11.17%
* Call Forwarding Variable: 22.45%
* Call Waiting:100.00%
* Call Waiting ID: 20.00%
* Caller ID - Name and Number: 26.05%
* Caller ID - Number: 36.36%
* Last Call Return: 33.90%
* Selective Call Waiting: 20.00%
* Three-Way Calling: 18.64%
* Message Toll - Res: 25.00%

Qwest claims that this is not deregulation and that the PUC would have the ability to reregulate rates in the future. But such a claim is deceptive. Their plan would give the PUC the ability to investigate Qwest's rates, but the Commission would be limited in its ability to require rate reductions, as long as Qwest could find a single provider with rates for a similar service that was within 10% of its price. This means that Qwest could raise your phone bill to $70/month as long as it could identify some other provider that was offering a similar set of services for $63/month. If they could identify someone selling phone service for $100/month, they could charge you $110/month.

So, CUB projects that Qwest's plan would raise residential phone bills by more than $20 million per year initially and a much greater amount over time. In exchange for these increases, they are promising to invest an extra $2 million into expansion of DSL service. This does not even come close to being a proposal that is reasonable.

Posted by Oregon CUB at 11:57 AM | Comments (0)

February 05, 2008

Wireless Do Not Call List Rumors Untrue

We love it, here at CUB, when we are able to respond directly to a query and open up a topic for public discussion. Particularly if we can soothe some fears in the process. Such was the case this past week: Bob Jenks met with a CUB ally who asked about the rumors circulating about the necessity of registering cell phone numbers with a separate Do Not Call List. Emails have been asserting that soon cell phone numbers will be released in the form of a national directory for telemarketing. The calls would be bad enough; that wireless users would have to pay for the privilege of receiving telemarketing calls would make it even worse. "If it's true, why isn't CUB talking about it?" she asked, "And if it's not true, why hasn't CUB let people know?" Luckily, it's not true.

The day after the aforementioned meeting, the cell phone Do Not Call issue again came up, this time in a press release from the Oregon Public Utility Commission. The PUC stated that these rumors are untrue, and that cell phones are not about to become fodder for telemarketing. It is true that there has been some discussion among wireless companies of creating a national directory of wireless numbers, but so far this has not occurred, and it remains illegal for companies to use automated dialing to call wireless phones. The FCC, which has a page discussing this issue also, understands that a significant portion of the cost of telemarketing would fall on cell phone users who pay for all airtime, and we believe they will not approve something so inherently unfair.

There is one Do Not Call List, which was begun in June 2003. Over 100 million Americans have registered their numbers on the list, and anyone who wishes to have the extra protection may register their cell phone number on this list. The original plan was to have a 5-year limit on registration, but because it would involve kicking so many millions of voluntary participants off the list, the FTC is talking with Congress about options for extending registration beyond the June 2008 5-year anniversary.

So do not fear the terrible specter of receiving credit card offers and special travel deals while you're waiting in line at the supermarket or rushing to get home for dinner. And if they call you during dinner on your home phone, register that number with the Do Not Call List - soon!

Posted by Oregon CUB at 03:15 PM | Comments (2)

January 24, 2008

Victory for Truth in Wireless Billing

If you are one of the millions of Americans who uses a cell phone, chances are good that you received an unwelcome surprise the first time you paid that wireless bill. Wireless telecommunications companies have for quite some time gotten away with advertising prices for their cell phone services that did not include taxes and fees (for example, the Universal Service Charge), which are then added to the advertised rates, so that the customer wound up paying more than they had thought they would.

For some customers, this is about to change, thanks to the National Association of State Utility Consumer Advocates. NASUCA, an organization to which CUB belongs, won the court battle against the big wireless companies, who have been told they can no longer hide certain fees in separate line items.

The U.S. Supreme Court Tuesday declined to review an appeal by Sprint and T-Mobile in their bid to prohibit states from placing any restrictions on their billing practices, such as prohibiting adding unadvertised line items. Federal law prohibits states from regulating wireless carriers' rates, but allows them to regulate terms and conditions. Several states are pursuing truth-in-billing laws; but the wireless carriers want to prohibit such regulation, claiming that it somehow regulates "rates." The real issue is that they do not want to allow states to protect customers from unfair business practices, such as hiding costs in line items when advertising a billing rate.

Our (cold-weather) hats are off to NASUCA, and all those who worked long and hard to bring truth in billing to this branch of the huge telecommunications industry. CUB will keep this ruling in mind as we look into options for protecting Oregon's telecom customers. Consumers in states with truth-in-billing laws will have a clearer idea of what they are getting into financially when they sign a wireless contract. Perhaps one day soon consumers in Oregon will, too.

Posted by Oregon CUB at 03:25 PM | Comments (0)

October 29, 2007

Qwest files for phone rate deregulation

Qwest is at it again. Unsuccessful in attempts to move through a plan to deregulate rates (and therefore raise them) for basic phone service on the Governor's Telecommunications Task Force of 2006, and in the Oregon Legislative Session of 2007 (note earlier mention of SB 2621), Qwest has now filed a case with the Public Utility Commission trying to do the same thing. We've looked it over, and it isn't pretty.

Qwest has filed a case with the PUC asking to raise the rate of basic local phone service and erase the price caps on many other additional phone services, as well. Their argument about needing more revenue lacks strength since basic telephone service is a declining cost industry, and has been for several years. Also, although Qwest may have been prohibited from raising their prices for most local services for several years, customers have seen increases on their phone bills, due to the FCC moving more of the costs of the national phone network onto subscribers' local phone service bills.

Qwest's filing would allow them to opt out of their current system of price cap regulation, which they chose out of a range of possible options in 1999, when Senate Bill 622 created the model of price cap regulation for Oregon under which Qwest has been operating. There was an assumption by those involved in the passage of SB 622 that the price cap regulation was a fairly permanent status change, and that only another legislative change would allow a change in that status.

Other options include traditional rate regulation based on the utility's rate of return (generally utilities earn about 10% above their rate of investment; this is the regulation PGE and PacifiCorp operate under); complete deregulation of services, dependent on the utility proving to the Commission that sufficient competition in providing those services exists to ensure a fair market; and an alternative form of regulation, which allows the PUC to set prices without regard to rate of return on investment. Whether Qwest can legally opt out of their current price cap regulation is a primary issue, as far as CUB is concerned.

Qwest is seeking price deregulation under a statute that allows the Commission to set prices without examining a utility's profit. A fundamental question, however, is whether this is legal. The Commission uses its regulatory power to set prices; can it use the same power to deregulate and not set prices? We are skeptical.

What is at stake is, of course, a great deal of customer money, and while the burden of increased rates would fall on every one of Qwest's customers, those hardest hit would be those with the least income who have only a single basic phone line. Those customers would see a $2/month increase sometime in the first 4 years, and then unlimited increases after that. All other phone services would be immediately eligible for unspecified (and uncapped) levels of price increase, including directory assistance, caller id, call waiting, unlisted numbers, and other optional phone services. (Voice mail service has been deregulated for some time and DSL service has never yet been regulated.) So, just for starters, Qwest could earn an extra $2 million per month on basic phone service, with greater increases from these additional phone services, and any increases they add to basic after the 4-year period is up.

What they have offered in return is a $1 million investment in network infrastructure in places that might not have been cost-effective (they say) to build in. And up to an additional $1 million for high speed connections for Oregon K-12 schools -- no base level of investment is guaranteed. We don't mean to be uncharitable ourselves, but do want to point out that a very small surcharge of less than 10 cents per month on existing basic service phone lines in Oregon for one year would give the same million dollars for schools, while Qwest would be pocketing at least an extra $1.9 million per month (or $1.90 per month per line) forever! When they were negotiating SB 622 eight years ago Qwest offered $120 million in network investments; it seems to us their negotiation offers have slipped somewhat.

One of the rationales Qwest gives for the attempt to raise local service rates is that they are subject to competition. We aren't disputing the increased competition in the telecomm world. But most of the competition comes from wireless phone services, which offers an increase in portability and convenience, which this filing doesn't address; and from the bundling of basic phone services with options such as cable television and internet, DSL, or wireless together on one bill (Qwest's main competitor in these fields is Comcast), and Qwest is quite capable of competitive bundling without this filing.

We're not impressed with the arguments put forth in Qwest's filing and we're not impressed with their going over well-traveled ground either, repackaging previous failed efforts to deregulate prices. But Qwest has successfully pursued this kind of rate deregulation in other states, and so CUB will file a response that attempts to keep Qwest's hand out of the proverbial cookie jar, once again.

Posted by Oregon CUB at 03:18 PM | Comments (0)

April 05, 2007

CUB Tackles Telecommunications Issues in Salem

We have spoken most recently and most often in CUB Online about the clean energy legislation CUB is advocating in Salem, but we also are working hard at the Capitol on telecommunications issues. Today we want to share with you some information and analysis about two telecom bills that are before the Oregon Legislature.

The good news is that a Telecommunications Consumers' Bill of Rights is back, HB 2008, introduced by Rep. Phil Barnhart and Rep. Diane Rosenbaum. It is long past time Oregon telecommunications customers should have these basic protections, things like "clear and complete information about rates," "right to personal privacy," "accurate and understandable bills," and of course, the right "to select telecommunications providers and vendors and to have those selections respected by telecommunications utilities." In other words, no slamming allowed.

Earlier this week, CUB Executive Director Bob Jenks traveled to Salem to give testimony in support of HB 2008, and we include portions of that testimony below.

Another bill being discussed is HB 2621, and this one is harder to support. This bill, which both Qwest and the Public Utility Commission endorse, would end rate regulation of all telephone rates except basic service. This means that the phone companies could raise rates for many other services and features (such as call waiting, 3-way calling, and business services features) that go along with basic local phone service. In addition, the bill says that the phone company can ask the Commission to raise the rates for basic local service in three years.

The reason the PUC is on board with the bill is that it would also provide increased consumer protection, allowing the Commission to investigate and address complaints having to do with all voice telephone services, including wireless, cable and voice-over-the-Internet (VOIP). Currently, the PUC deals with local phone complaints, has some limited authority to handle wireless complaints, and no authority over cable and VOIP.

We do wholeheartedly endorse the consumer protection aspects of the bill but are troubled by the change to regulatory practice, which would make it difficult if not impossible for CUB to argue against a rate hike if one were to be proposed by the phone companies three years from now.

Currently, we can go to the PUC and argue that this is an industry whose costs are declining, and that companies therefore do not need to charge customers more for the telecommunications services they rely on to connect them to friends, family and necessary services. However, if this bill were to pass, the price of phone service would be "disconnected" from the company's cost, the standards for approving rate hikes would become far more subjective, and we might be forced to see ordinary home and business phone service increase by leaps and bounds. That we cannot support.

So we will continue to monitor HB 2621, and to advocate strongly for HB 2008, knowing that well-protected telecommunications utility services are a cornerstone for the healthy functioning of Oregon families, businesses and communities.

Testimony of Bob Jenks in support of HB 2008, April 4, 2007
House Consumer Protection Committee

I am pleased to be here today to testify in support of HB 2008. HB 2008 is a simple straight-forward bill. If the telecommunications industry was as straight-forward as this bill, a change in the law would not be necessary.

It is time to treat customers with the respect that we deserve.

Posted by Oregon CUB at 04:08 PM | Comments (0)

October 26, 2006

Free Is a Very Good Price: Let's Talk Wi-Fi

There was a time not so long ago when youth supposedly had an edge in technological advances, when our elders were assumed to be "out of it" when it came to computers and other quickly developing gadgetry. Well, it looks as if whatever water that theory held might be dripping away. You might have heard the sound of the drips had you followed CUB Executive Director Bob Jenks to his speaking engagement yesterday at a national committee meeting of the AARP. These retired persons did not want to talk golf, or canning, or even the (somewhat deplorable) state of current medical costs. They wanted to talk Wi-Fi, the broadband access to the Internet that is available by means of an antenna receiving radiowaves.

The AARP wanted to talk Wi-Fi because that technology can dramatically reduce the cost of high speed Internet access and help bridge the digital divide. That makes it possible for low-income Americans to participate in the online information age. They wanted to have that discussion here in Portland, Oregon because Portland (so they say) has it all going on. So, what is going on with Wi-Fi in Oregon and in Portland?

Well, as you may know, quite a bit. Here are four examples of current and upcoming broadband projects in Oregon.

1. Hermiston, Oregon has for almost 2 years been the site of the nation's largest Wi-Fi network, an area that encompasses 600 square miles. Originally created to support the needs of the Port of Umatilla and the nearby Army Depot, it has been offered free of charge to local residents as well.

2. Portland-based Personal Telco Project is a non-profit created to promote the availability of broadband access through Wi-Fi "nodes" or broadcast hotspots set up in various neighborhoods, of which Portland currently has over 100. Bob Jenks lives near one of these nodes and will soon hit his second anniversary of free Internet service at his house.

3. Personal sharing of a broadband signal is also used more informally, often between neighbors who might split the cost of a broadband service and share the encryption code (note: this is forbidden in contracts with some of the larger broadband providers but not by all telecommunications carriers).

4. Portland will soon become one of only two major U.S. cities (the other being Philadelphia) to offer Wi-Fi access throughout the city. Downtown Portland is due to have free broadband in December of this year, with the rest of the city covered within 2 more years. This is a public/private partnership, with the city providing the poles and right-of-way and private sources covering start-up costs. Rather than subscribing to the broadband service, residents will be able to access it for free, with advertisers footing the bill (this is a pilot project for doing advertiser-supported Wi-Fi on this scale).

CUB notes that current prices for the faster Internet connection services such as DSL (offered by Qwest or Verizon), cable (offered by Comcast), or broadband offered by cell phone companies (such as Sprint or Cingular) tend to be on the expensive side, running anywhere from $50 to $75 per month. This prices a lot of people out of the market, particularly those living on a fixed income. In comparison, a card or antenna to receive broadband Internet access can be purchased for $10-$25. After that initial purchase, the consumer, in a place such as Portland, Hermiston, or Philadelphia, could be truly "home free."

This may be one reason that, even though the expansion of Wi-Fi coverage may be the most exciting telecomm topic for everyone from the AARP to the folks at Personal Telco, it does not have a place at the table on the current Task Force on Telecommunications created by Oregon's Senate Bill 17. Bob Jenks sits on the Task Force, as well as 4 legislators, and members of the Incumbent Local Exchange Carriers (the old Baby Bells), and the Independent Oregon Telecommunications Assoc. (smaller local carriers), Wireless Cell Phone Providers, and the Cable Industry. There is pretty broad representation from throughout this industry but the group has not spent 5 minutes on Wi-Fi. The fact that each of these industry segments offers their own broadband at a cost of more than $50 per month could explain why Wi-Fi is not being discussed or promoted within the telecomm industry.

A New York Times article about the Hermiston Wi-Fi phenomenon stated that "Indeed, we need to envision broadband Internet access as just another utility... Other American towns need to follow Hermiston... in ensuring broadband Internet access as reliably as they do water or electricity." Affordability added to reliability makes the prospect really shine.

Posted by Oregon CUB at 02:04 PM | Comments (1)

August 03, 2006

Consumer Advocates Win Wireless Truth-In-Billing Suit

The 11th Circuit Court of Appeals released a decision Monday regarding a "Truth-in-Billing" lawsuit, saying that individual states do have the right to examine cell phone bills, with the intent of regulating the billing practices of this somewhat unregulated industry.

You may have noticed when you received your first cell phone bill that it was a bit larger -- perhaps even quite a bit larger -- than the rate you were promised in an advertisement or by a sales representative. This is because the base rate for cell phone service does not include so-called "line items" on your bill, which can raise the overall fees for wireless service by $5, $10, or potentially even more, per month. What is a line item? Well, just as on your land-line phone, cell phone bills include the FCC Universal Fee: "The FCC Universal Fee is mandated by the FCC and assessed against interstate and international long distance tolls, including calling card and Phone Me tolls. The fee is to reduce telephone costs for low-income persons, to subsidize the cost of connecting schools, libraries and rural hospitals to the Internet, and to lower the cost of rural telephone service." (workingassets.com.) Also, any local taxes levied on cell phone service would be included as line items. These specialized cell phone fee or tax line items are necessary, they should be listed, and are not the problem.

The problem is that some wireless companies have also been listing basic costs of doing business, such as their own property tax, in the form of a line item, thus making their advertised basic rate seem smaller. These normal costs should be included upfront in the rates, not hidden from customers in a line item. When companies include what should be normalized costs as add-on line items, consumers have a harder time making comparisons to determine which company has the better-priced service.

So NASUCA (the National Association of State Utility Consumer Advocates) filed a Petition asking the FCC (the Federal Communications Commission) to prohibit cell phone companies "from imposing any separate line item or surcharge on a customer's bill that was not mandated or authorized by federal, state or local law." But the FCC not only refused this Petition, they went one step further and said that states could not prohibit or regulate the usage of line items on wireless bills. NASUCA then filed suit against the FCC, claiming that the Agency had overstepped its authority (since the 1996 Telecommunications Act gave the FCC authority over "rates" but allowed states to regulate "other terms and conditions"), and that its actions improperly protected the industry over the interests of consumers.

This week's ruling supports NASUCA's analysis, and will allow states to examine cell phone companies' billing practices, with an eye to regulating them and making the bills more easily understood by customers. This regulation will make comparison shopping among cell phone service companies more helpful, since companies will not be able to hide basic costs in line items.

Locally, this ruling means that, should the Oregon Legislature wish to pursue a Truth-In-Billing law that applies to wireless companies, they now have that option. Is cell phone billing a problem for you? If you have an issue with your cell phone company's billing practices, shoot us an email, and let us know.

NASUCA (of which CUB is a member) represents utility consumers on a national level as we do on the state level here in Oregon. We congratulate them on their victory in this case. Somebody has to keep an eye on things at the national level, and we're glad that NASUCA is doing such a good job of it. Keep it up!

Posted by Oregon CUB at 01:51 PM | Comments (0)

June 30, 2006

Wyden Cries "Hold!" on Internet Discrimination

Fearing that additional charges on Internet access would greatly harm free growth and access to the Internet, Oregon Senator Ron Wyden announced on Wednesday his intention to place a "hold" on legislation (passed this week out of the Senate Commerce Committee) that could allow such charges.

Wyden explained his strong opposition to the telecommunications legislation, which contains a provision corroding equal access to the Internet, this way: "Without a clear policy preserving the neutrality of the Internet and without tough sanctions against those who would discriminate, the Internet will be forever changed for the worse. This one provision threatens to divide the Internet into technology 'haves' and 'have nots.' This one provision concentrates even more power in the hands of the special interests that own the pipelines to the Internet. This one provision codifies discrimination on the Internet by a handful of large telecommunications and cable providers. This one provision will allow large, special interests to saddle consumers and small businesses alike with new and discriminatory fees over and above what they already pay for Internet access. This one small provision is akin to hurling a giant wrecking ball at the Internet."

Called by some an "Internet Tax," the ability to charge for different levels of speed and service would be a boon to certain telecommunications companies such as Verizon and Qwest, while causing distress among Internet-based companies such as Ebay and Amazon, and a wide assortment of organizations (such as CUB) who use the Internet as a vital communication tool. (According to the Oregonian's David Sarasohn, groups like the Christian Coalition are with Wyden on this issue, because they rely on the Internet to communicate with their many members.)

According to the San Francisco Chronicle (06/29/06): "The debate over net neutrality has become a civil war of sorts in the technology industry. Web content companies, high-tech firms and grassroots groups had hoped to persuade lawmakers to order the Federal Communications Commission to write regulations that would prevent phone and cable companies from levying additional charges on content providers to assure speedier delivery of Internet traffic."

CUB supports the strong stand that Sen. Wyden has taken on protecting net neutrality. As he stated in his floor speech Wednesday: "The Internet has thrived precisely because it is neutral. It has thrived because consumers, and not some giant cable or phone company, get to choose what they want to see and how quickly they get to see it. I am not going to allow a bill to go forward that is going to end surfing the web free of discrimination."

Telecommunications services are fast becoming one of the cornerstones of American civic and financial life, and the Internet is the superhighway of our current telecommunications system. We can't afford to stand by as equal and free access to the Internet is eroded. Good work, Sen. Wyden!

Finally, our legislators need to hear from you on issues that you consider important. You can find both Oregon Senators on the web: Sen. Ron Wyden and Sen. Gordon Smith. The Capitol Switchboard at (800) 459-1887 is also effective. Even a few calls on an issue raises the profile, but a few dozen calls really pulls the issue into the forefront.

Posted by Oregon CUB at 02:10 PM | Comments (0)

June 06, 2006

Cable Television Local Control at Risk

Most of us at Citizens' Utility Board wear multiple hats. CUB Organizing Director Jeff Bissonnette, among his many volunteer activities, sits on the Board of Portland Community Media. He therefore is doubly interested in the consumer privacy and local control issues being posed by legislation now in Congress. We have written about this danger to telecommunications customers and Oregon communities in our blog, A Telecomm Bill to Beat.

His Commentary Article appeared in the Insight section of the Portland Tribune today (06/06/06). Here is what he had to say:

Keep local access, control

By JEFF BISSONNETTE
Issue date: Tue, Jun 6, 2006
For the Tribune
----------------------------------------------------------------------
Portland Community Media celebrates its 25th anniversary this year, but it may have a hard time making it another 2 1/2 years if proposed federal legislation becomes law.

PCM has provided equipment and training for thousands of residents in Portland to use the cable system as a means of local community communications. Cable subscribers have had opportunities to watch high school football and city parades, local basketball games and state and city government public hearings on the community channels.

PCM also supported local and state democracy by providing thousands of hours of election coverage -- more time, in fact, than all of the commercial broadcast network affiliates combined.

All of this could end if Congress approves the pending legislation.

The U.S. House of Representatives is expected to vote on the Communications Opportunity, Promotion and Enhancement (or COPE) Act -- a bill that's supposed to encourage more competition to cable companies. The bill would permit multibillion-dollar companies like Verizon, AT&T and Qwest, the bill's major beneficiaries, to cherry-pick the lucrative neighborhoods in a community, leaving the rest behind. And, as soon as one subscriber is signed up by the phone company, the existing cable operator can adopt the national franchise and abandon local public service commitments.

While the bill would not create the competitive marketplace that its sponsors promise, it would do the following:

1. Rely on a one-size-fits-all solution for the whole country. Cities will be forced to spend your tax dollars on expensive Capitol Hill attorneys to defend their legitimate rights-of-way regulations. Local consumers will be left to call a backlogged Federal Communications Commission with complaints. (Try reaching someone at the FCC on the phone.)

2. Allow phone companies to pick the area of a city they choose to serve, abandoning the historic commitment to universal service for all residents. This may result in short-term lower rates for areas with competition, but areas without competition will get no rate relief.

3. Cut funding for public access in cities and towns that currently have more support than what is provided for in the bill. COPE would cut Portland Community Media funding by $360,000. PCM would no longer be able to afford to provide the training, equipment and other support that enables community producers to create the kind of local programming our viewers have come to expect.

4. Replace video franchises, locally negotiated to best serve community needs, with a licensing procedure that would allow virtually anyone -- qualified or not -- to come into a city and begin digging up the streets.

5. Weaken consumer and privacy protections by limiting local governments' ability to adopt and enforce strong standards and rules to protect their citizens.

6. Create a loophole that can be used to sidestep the regulations by redefining services. While it may walk and talk like a duck, the phone companies can call it a goose and walk away from this law.

If you believe in local control, in being able to watch your local government or share local views, and in keeping control of your local rights-of-way, contact the members of Oregon's congressional delegation immediately.

Tell Congress: Don't be fooled again! Stand up for our local communities and for consumers. Say “Nope” to COPE!

Jeff Bissonnette is president of the board of directors of Portland Community Media.

Posted by Oregon CUB at 11:47 AM | Comments (0)

May 12, 2006

Act Now to Stop "Internet Tax"

Many of our traditional means of research and entertainment are being replaced by content provided on the World Wide Web. Though only a few decades old, the web has become deeply enmeshed in many aspects of our lives. And we have become accustomed to a level of equal access to the web. For example, when we consume content from the web, we expect that the material we're viewing or hearing will be provided to us at the same speed, no matter what the website, with the only limitation being the speed of our connection. Likewise, when we post information on the web, we expect that information to be equally available to anyone with an Internet connection, limited only by our ability to attract web surfers to our site.

However, legislation is quickly moving through Congress that would undermine the principle of equal access to online information. Recent committee votes have dealt a serious blow to the basic principle that for the last ten years has fueled the explosive growth of the Internet and powered economic and social innovation. That basic principle is known as Network Neutrality, a concept that guarantees that consumers of Internet services can select any Internet service provider (ISP), access any lawful content, and transmit any lawful information they choose by posting it to a website.

Today's Internet has flourished because government policy has prohibited telephone companies, who controlled the flow of information over their Internet dial-up connections, from interfering with services consumers were trying to reach. Now, telephone and cable companies want to bury this policy in a time capsule and abandon it for their high-speed networks. These powerful interests want to charge creators of websites and Internet services for the right to use the broadband network to deliver content, such as video and telephone service. Think of it as an "Internet Tax." Those who agree to pay up will pass the charges on to consumers in the form of higher prices. Those who can't pay the "tax" will see their websites or services downloaded more slowly and, therefore, get less browser traffic.

In this "pay for access" environment, it is unlikely that the next Google, Amazon.com or ebay would ever be able to get off the ground. Even more frightening, websites run by public interest organizations like CUB or a local social service agency will be at a disadvantage because they will be unable to afford to pay the "Internet Tax" to provide basic information at an acceptable delivery speed (or offer new services, such as video programming, that are still in their early stages). In short, consumers will have fewer choices.

But potential innovators and consumers of their services don't only have higher access fees to be concerned about. Because of Congress's failure to protect the Internet, the cable and telephone companies have every incentive to give preferential treatment to their own high-end services and slow down or block access to others.

The phone and cable companies already charge consumers who choose different Internet service speeds different prices; but once the consumer pays for the connection, s/he should be able to access any content without interference by the operator of the system over which the content travels. Network operators, the telephone and cable companies, should not be able to interfere based on your ability to pay a premium. Consumers -- not network operators -- should determine which Internet services will succeed.

There is a solution to this problem. Congress must restore rules that will ensure Network Neutrality so that we preserve the openness and vitality of the Internet that has transformed our economy and culture over the past few decades. The big telecommunications companies are pushing hard and the legislation is moving quickly. (We only wish consumer protection legislation moved so rapidly through the process!)

The time has come to push back. Don't let the telephone and cable companies destroy Net Neutrality, the quality that makes the Internet such a great resource. Contact your Congressperson and U.S. Senators and tell them to preserve "Net Neutrality." The Internet should remain a great resource for everyone.

Posted by Oregon CUB at 11:25 AM | Comments (0)

February 02, 2006

Cable Rates Make Case for Telecomm Regulation

Did you catch the news about cable rates last week? If not, here's a quick update: Comcast raising cable rates again, Oregonian 01/25/06. "How is this possible," those of you seeing the 7% annual increase, may be asking. The short answer is: they're deregulated.

The Federal Telecommunications Act of 1996 effectively deregulated cable companies and kept wireless telephone companies from ever having to meet regulatory standards. That is why CUB opposed the bill, along with the national organization, Consumer Federation of America. Despite that opposition, the bill passed, and cable bills began to skyrocket. Thank goodness we had better luck when Enron came knocking with their electricity deregulatory scheme back in '97. Thanks to many organizations, with CUB in the lead, we were able to practice a little energy legislation judo on Enron, throwing the weight of their call for change toward an energy restructuring bill, SB 1149, that actually improved the way electricity is regulated and structured in the state of Oregon.

This has been a major fight across the utility industry for a decade or more, with every large utility company asking for deregulation, so that "competitive markets" can bring the price down for customers. A safer way to inject competition into utility markets is a model in which either several private companies vie for shares of a market within a regulated system, or one in which a private company is competing with a publicly owned utility service (for example, note lower local cable rates in Ashland, where the City offers cable service). The unregulated monopoly model is the worst for customers. Regulation of utility services provides a much-needed restraining influence on price and a helpful oversight of the quality of those services.

Other cities have pursued the idea of publicly-offered telecommunications services. The City of Eugene passed a ballot measure, with CUB's support, that allowed the City's public electric utility, EWEB, to explore building its own telephone, cable and broadband network. The Power Crisis of 2001 intervened and postponed the plan, but the city retains the right to move ahead. Portland has also looked into a public-private partnership, such as the one just finalized in Philadelphia, PA, wherein the city offers the right-of-way for wireless broadband network to a private company in return for reduced rates for the city's residents (Philadelphia's contract is with Earthlink).

Because of Ashland's success in setting up a publicly-offered cable network, we've seen Qwest and Comcast lobby for bills that would prohibit public ownership of telephone, cable, and broadband networks. This kind of activity applies to the telephone market, as well. For years, Oregon's primary telephone providers, Qwest and Verizon, have pushed for deregulation of local telephone service (long distance service has been deregulated for some time).

Recently, a Task Force on Telecommunications Law Revision was appointed by Gov. Kulongoski to investigate issues of the industries (cable, telephone, wireless, broadband). Of the 10 voting members, four are state legislators, five are industry representatives, and one is a consumer advocate. That consumer advocate is Bob Jenks, CUB's long-time executive director.

While the industries continue to push for deregulation in hopes of extracting more profit with less stringent quality checks, Bob will continue to hold the line for customers who want good service at fair costs.

Posted by Oregon CUB at 12:03 PM | Comments (0)

December 12, 2005

A Telecomm Bill to Beat

You hear a lot from CUB about energy but not as much about telecommunications. But CUB works on these important issues, too, even though the telecommunications industry is to a great extent deregulated (largely due to the Telecommunications Act of 1996).

One important telecomm issue is the BITS 2 bill, federal legislation currently before Congress. Senate Bill 1349/House Bill 3146 would allow telecommunications companies to deliver cable and television to people's homes, but without those pesky right-of-way agreements with local governments, or those annoying franchise fees usually charged by city governments to pay for things like community media, public safety information networks, educational programming, etc.

We believe it is extremely important to retain local government control of video franchising. We also believe the programs funded by the franchise fees in question are worth fighting for. If you agree, please take a moment to contact your Congressional Representatives:
Sen. Ron Wyden at (202) 224-5244, Sen. Gordon Smith at (202) 224-3753, Rep. Earl Blumenauer (202) 225-4811, Rep. David Wu (202) 225-0855, Rep. Peter Defazio (202) 225-6416, Rep. Darlene Hooley (202) 225-5711, Rep. Greg Walden (202) 225-6730.

Tell your Senators and Representative that Senate Bill 1349/House Bill 3146 is bad for local governments and even worse for local communities. Tell them to vote NO on Senate Bill 1349/House Bill 3146.

More information about the bill is available on the website of Portland Community Media.

Posted by Oregon CUB at 10:52 AM | Comments (0)

August 19, 2005

Commission Announces New Law Protecting Domestic Violence Survivors

Here is the Oregon Public Utility Commission Press Release announcing the law passed by the Oregon Legislature (and advocated for by CUB and other advocacy groups) during the 2005 Session, a law that will help protect those leaving abusive situations by ensuring them access to telephone service. CUB congratulates our Organizing Director, Jeff Bissonnette, for his hard work over the course of two sessions in working on the passage of this bill.

Commission Adopts Temporary Rules for Victims of Domestic Violence

August 16, 2005

Salem, OR - Effective September 1, 2005 those at risk of domestic violence will not have to worry about having their basic phone service disconnected for unpaid bills.

Today the Oregon Public Utility Commission adopted temporary rules to allow those at risk of domestic violence to go on a payment plan instead of having their service cut off.

Senate Bill 983, which was passed in the recently concluded legislative session, directs the Oregon Public Utility Commission to establish a program that bars local phone companies from disconnecting service if it would significantly endanger a person who is at risk of domestic violence or unwanted contact. It also applies to disabled or elderly individuals at risk of abuse or a victim of stalking.

Clark Jackson, the manager of Consumer Services for the Commission said, "The new program is very similar to our existing emergency medical certificate program, so we will gladly assist the utilities in establishing this new program."

The legislation requires telecommunications utilities to establish procedures for receiving affidavits from customers at risk of domestic violence or abuse. The customer must submit a court issued restraining order with an affidavit to the utility.

SB 983 does not excuse the customer from paying their telephone bill. The law allows the customer to enter into a reasonable payment agreement with the utility if there is an overdue balance.

The Commission expects to have permanent rules in place by February 27 of next year when the temporary rules expire.

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Posted by Oregon CUB at 01:57 PM | Comments (0)