Senate Bill 12

Senate Bill 12

I have often stated in this column that the only proper role of government is the protection of its citizens. This can be interpreted broadly to include disparate topics such as police protection and laws against fraud but it can also be interpreted to include laws and rules that preserve the ability of citizens to seek a fair and equitable access to basic services. Basic services can be things like medical care or protection from unfair hiring practices. In this case I want to speak to you of Senate Bill 12 which will relieve telecommunications companies from being required to act a provider of last resort to areas that are not as profitable as others. Specifically, it would relieve companies like AT&T and Windstream from providing basic services to rural areas for which it is less profitable due to terrain, sparseness of subscribers or for locations that would require significant construction to provide service. What we are talking about are land lines to subscribers who desire basic telephone service without the frills. This would include 911 service which has proven to be a lifeline for untold numbers of people. Cell phone service is spotty at best in the mountains of Easter Kentucky and would not be a workable replacement for landline service. Most people receive internet service either by television cable or by phone lines. They would be totally left without broadband or even dial-up service.

The telecommunications giants claim this would free them from unprofitable activities in order to invest in more technologically superior infrastructure. It is unclear just what that infrastructure would be or how much it would cost. What is clear is that it would effectively deny basic life saving service to many of Kentucky’s poor and we have a number of poor people in hard to reach areas. Also, at a time when we are trying to increase broadband coverage to rural Kentucky in order to increase economic opportunity Senate Bill 12 would decrease the primary method of delivering those services which is by telephone lines.

Now, the telecommunications giants say they won't remove anyone from basic service that is already being served but future applicants may not be served or may be required to purchase a telephone package that includes lots of other features that add cost to the monthly bill. For instance, my daughter has a basic service package that costs about $50 per month but I have a package that includes unlimited long distance, all the bells and whistles and broadband service that costs about $100 per month. Kentucky is not a wealthy state and the burden this legislation would place on those least able to pay would be onerous.

Now, you might say that the telecommunications giants have a right to be able to make as much money as they can from their product but there are a few other things to consider. For instance, these corporations are granted franchises (monopolies) to operate in a given area much the same as the electrical providers in order to give them a financial incentive to include the less profitable lines and to make long term investments. In addition, they use public rights of way to string lines and public airwaves to facilitate wireless services. In return the telecommunications giants are granted privileges that are anti-competitive and now, even after all these grants, they want to unload those customers for which the profit margin may be a bit smaller. Further, there have been efforts by other groups and municipalities to offer competing services that have been vehemently beaten back by the telecommunications giants who claim infringement on their franchises and now they want to withdraw service from those areas they no longer want at the price. Maybe they would be interested if the pot were sweeter.

Senate Bill 12 has been reported out of committee favorably. News reports state that when the bill's sponsor, Senator Paul Hornback (R-Shelbyville), testified before the committee he had an AT&T executive on each side of him. In addition, AT&T employs 31 lobbyists in Frankfort and has contributed generously to political campaign funds and has spent an additional $80,000 in lobbying expenses. Even at this these expenses would prove to be miniscule in comparison to the windfall the telecommunications giants would receive in return.

So, here are giant corporations who are attempting to make Kentucky their cash cow while refusing to provide services that would benefit the state as a whole. Through the entire history of this state, Kentucky has had the land raped and the revenue moved out of state. This seems a perfect place for intervention by the state to protect the public interest. Imagine your loved ones, existing on a Social Security check and isolated in the hills and hollows of Kentucky who these telecommunications giants would deny 911 services to thereby risking their lives. Is it too much to expect corporations to be just a little bit socially conscious? Without the telecommunications giants delivering these services it would fall to state government to fill the gap. The downside there is higher taxation to support these services.

My take? This bill should meet a swift death in order to protect the public and to facilitate the efforts to make opportunity equitable. Either that or forgo the franchises and allow entrepreneurial effort to compete for the business with minimum service requirements.