Proposal to deregulate landline telephone service considered

Certain telecommunications companies could seek relief from landline telephone service regulations under a bill heard Feb. 11 by the Transportation and Telecommunications Committee.

Under LB4, sponsored by Lincoln Sen. Carolyn Bosn, companies that offer local exchange telecommunications services could petition the Nebraska Public Service Commission to deregulate one of the carrier’s exchanges.

If the commission determines that the exchange should be deregulated, a carrier would not be required to fulfill the obligations of a carrier of last resort, which must provide voice communication service upon request to all residential and single-line business customers within a defined area.

Additionally, a deregulated carrier would not be required to file an earnings report with the commission or comply with restrictions on rates or certain standards or reporting requirements related to quality of service.

Bosn said Nebraska’s landline service regulations do not reflect the current telecommunications market, particularly in urban areas with multiple service providers. LB4 would allow an incumbent carrier of last resort to exit the landline market if other providers are present, she said, freeing up resources currently used to maintain copper telephone lines.

In exchange for deregulation, Bosn said, carriers no longer would receive support from the Nebraska Universal Service Fund, which provides funding to telecommunications companies to maintain and upgrade their networks.

“This ensures that market-driven forces primarily determine service quality and availability,” she said.

After a petition is filed, the commission would have 90 days to determine whether an exchange should be deregulated.

LB4 would require the commission to deregulate an exchange if:
• the population in the area included in the exchange is at least 100,000; or
• the population is less than 100,000 and — in addition to the electing local exchange carrier — there are at least two other carriers providing landline service in all of the exchange.

The commission also could determine that an exchange should be deregulated if at least two other carriers are providing landline service in at least 75% of the square miles in the exchange.

Trent Fellers of Windstream testified in support of the bill. As the carrier of last resort in Lincoln, Fellers said, Windstream is required to maintain its outdated copper-based network there even though two other companies provide similar service.

“Eliminating laws that require companies to uphold outdated and unnecessary technologies will boost investment in future broadband networks that consumers and our economy demand,” he said.

Also in support was Peter Gose of Lumen Technologies, Omaha’s carrier of last resort. He said only 5% of Nebraskans still receive telephone service via copper telephone lines.

“It’s just a service customers don’t want anymore,” Gose said, “and forcing the company to maintain that archaic copper network when customers desire more advanced services is a burden and drain on company resources.”

Testifying in opposition to the bill was PSC chairperson Tim Schram. Although LB4 would allow the commission to continue to hear customer complaints against deregulated carriers, he said, the PSC could not require those carriers to refund a customer or restore service.

Schram said LB4 also would supersede a current process under which the PSC can transfer carrier of last resort obligations between companies if it determines that consumers will not be harmed.

“Transitioning [carrier of last resort] responsibilities should be done in a manner to ensure every consumer has access to reliable service and that carriers are accountable to the public they serve,” he said.

The committee took no immediate action on the bill.