NASUCA June TELCO COMPETITION: THE LACK OF ESSENTIAL CONSUMER PROTECTIONS Barbara R. Alexander Consumer Affairs Consultant 83 Wedgewood Dr. Winthrop, Maine (207)

ACKNOWLEDGEMENT FOR CONTENT  This presentation relies heavily upon and is a reflection of work of others, particularly Susan M. Baldwin and AARP  Those who want copies of recent papers Susan has done for AARP on COLR and VoIP should contact Coralette Hannon at NASUCA June 20132

3 TELCO DEREGULATION: WHO IS IN CHARGE? NO ONE Due to federal/state jurisdictional complexity and ILEC moves to “deregulate” COLR obligation, essential consumer protections applicable to many competitive markets are missing: Disclosures Service Quality Customer Service; Complaints Unfair and deceptive marketing and contract terms

CONTRAST WITH ELECTRIC/GAS RESTRUCTURING  State regulators have licensing and consumer protection mandates to oversee conduct of alternative suppliers  Distribution utilities have default service obligation  Customer complaints and service quality oversight is intact with respect to utilities and suppliers NASUCA June 20134

COLR AND UNIVERSAL SERVICE  The two are inextricably linked and elimination of COLR threatens achievement of long standing state and federal policy to ensure universal service  While proposals for elimination of COLR and deregulation rely on presence of “competition” and customer choice, in fact trend is toward less competition, not more! NASUCA June 20135

DEREGULATION OF VoIP  Again, we have confusing state-federal jurisdictional issues (“fixed” and “nomadic”)  FCC “consumer protections” are insufficient and not a reflection of typical competitive market policies  Providers seek to eliminate state regulations and oversight  VoIP is not a minor niche: 32% of residential market served by non-ILEC providers of VoIP services; 5% ILEC VoIP lines NASUCA June 20136

CALIFORNIA REPORT ON “GAPS EMERGE IN TELEPHONE CONSUMER PROTECTIONS”  No oversight or monitoring of prices and competition in fact rather than theory  No real complaint investigations and resolutions; focus on closing cases  No consumer information that allows informed selection of providers  Cramming is rampant; no real regulation of wireless carriers NASUCA June 20137

AARP NATIONAL SURVEY: AGE 40 AND OLDER  52% use landline over copper wires and 34% use cable provider  80% said were not going to disconnect landline for wireless  Keep landline due to need for emergency and dependability and quality of calls compared to wireless /aarp-national-survey-of-residents-age summary-of-opinions-o.html NASUCA June 20138

NATURE OF “REFORM” DEBATE IS WRONG  Don’t eliminate COLR; redistribute its obligations  Restore market oversight with licensing and consumer protection policies for all carriers  Require service quality standards and reporting from all carriers  Unify and promote customer complaint handling NASUCA June 20139

AGENDA  Adopt proactive regulatory structure for competitive market  The elimination of price regulation should not eliminate regulation  Retain price regulation of basic local service  Use licensing as gatekeeper and enforcement mechanism  COLR is crucial and should be retained, but obligation distributed NASUCA June

AGENDA (CON’T)  Adopt strict regulations and enforce prohibitions on cramming, slamming, rate increases without proper notice and consent  Service quality oversight for all providers  Ensure stand alone purchase for basic service  Resist obligation to purchase “bundle” to get what consumer wants  Effective complaint resolution NASUCA June