Unraveling Ohio's new phone rules

The Ohio Telecommunications Modernization Act - "common-sense regulatory reform," in the view ofGov. Ted Strickland - takes effect Sept. 12. It replaces legislation that's been on the books since1989, the last time telecom regulation was comprehensively considered. That's light-years ago interms of changes in the industry, with more people migrating from landlines to cell phones, andmore companies bundling phone service with cable TV and the like.

Proponents of the bill, including its sponsor, state Sen. Steve Buehrer, R-Delta, say it willcreate a level playing field for traditional local phone companies and the newer competitors,including currently unregulated or lightly regulated providers of wireless, cable and Internetvoice services.

The law makes more low-income people eligible for the Lifeline Assistance program, which helpsreduce the cost of basic telephone rates for low-income customers. Lifeline-eligible customersreceive a discount on their monthly basic telephone service rate, a waiver of all charges forservice connection, are not required to pay a deposit or any upfront charges for establishingtelephone service and receive free toll blocking and 900 or 976 blocking.

Lifeline benefits may be applied to only one type of service - landline or wireless - and applyto only one telephone line per principal place of residence. The amount of the discount varies bylocal telephone company.

Starting in September, people can receive the benefit if their household income is 150 percentof the federal poverty level, up from the current 135 percent. It extends the program to all 42traditional telephone providers in Ohio, up from the current three providers.

The exemption only lasts two years

But while the exemption only lasts two years, at the end of that time it will be assessed by thesame committee that will look at the free voicemail program. The legislation also requires thatphone companies continue 911 emergency service for 14 days after any customer's phone isdisconnected for nonpayment.

"Telephone companies should not be given three days to restore outages," Bridges said. "Withdecreased service quality, Ohio's elderly could be alone and without telephone service for severaldays with no way to call for help."

Those who don't want or can't afford more than basic landline service or live where there isn'tbroadband or good wireless coverage will retain their legal protections, she said.

"For those customers, the basic protections, the status quo protections, those kinds of thingsare still in the new law," Fergus said. "The phone companies have to be truthful in billing; theycan't use unreasonable marketing; they can't mislead you; they can't forget to tell you thingsabout exclusions or limitations."

The major goals of the new law

One of the major goals of the new law was to better reflect current conditions in thetelecommunications business - and make sure traditional landline companies and newer phone-serviceproviders such as cable companies can compete fairly.

"Traditional landline telephone companies have lost nearly 50 percent of their customers since2001," said Charles Moses, president of the Ohio Telecom Association. "Technology and competitionhave forever changed the marketplace. For our companies to remain competitive, we must change theway we do business. We want to look more like our competitors."

The onrush of cell phones

With the onrush of cell phones and bundling of phone services along with Internet and cable TV,the old days of treating the telephone as a protected and strictly regulated public utility shouldbe drawing to a close, industry advocates say.

"Now the law says, 'Here's what the legislature finds is appropriate,'" Fergus said. "Thetelecom companies couldn't say with any certainty what the landscape would be." Because businesseslike predictability, it's a plus for the telecom companies to have a law that articulates what therules are and will likely remain.

"There was an extensive lobbying effort to make sure PUCO had no jurisdiction over VoIP, even iffederal authorities said the state has jurisdiction," Fergus said.

The lobbyists lost

But the lobbyists lost. If the Federal Communications Commission gives authority to the states,something that Fergus sees as more likely under the Obama administration, the PUCO would havejurisdiction.