Rules might change for rural landlines

Pending legislation would deregulate the industry and could change the amount of competition in rural areas

January 4, 2014
Photo illustration by Jim McNutt

Out in parts of East Finley Township where Becky Carson lives, the only means of phone communication is the traditional landline.

That’s why she has concerns about a bill state legislators are considering that would loosen regulations for the telecommunications companies and might bring less competition for rural customers.

That’s not exactly comforting news to Carson, who said cellphone service is spotty at best in her area.

“Out here, a landline appears to be our only option for telephone service,” Carson said. “In much of this area, one has to get in the car and try to find a hill high enough to get reception to use a cellphone. Not exactly something you could afford to do if someone was having a medical emergency.”

House Bill 1608 is still in the early stages, but it would allow to a company to request removing telephone service in rural areas if at least one cellular service and another landline phone service are offered.

Although early fears that rural areas could be without any reliable service appear to be unfounded, the legislation dovetails with the trend of communications companies moving away from landlines.

Grier Adamson, treasurer and chief executive officer for Hickory Telephone Co. in Mt. Pleasant Township, thinks the legislation won’t hurt rural customers as previously thought since they still must offer Internet broadband to those areas. He thinks it will ease some of the redundant regulating and reporting requirements that can be burdensome for small communications companies.

“All (state Public Utility Commission) oversight will remain in place,” Adamson said. “In case someone cannot get telephone service because there isn’t a competitor, the PUC can still order us to go and still offer service.”

The companies must petition the PUC to pull service from certain exchanges if they’re able to demonstrate viable alternatives. The legislation would allow the company to stop service beginning Jan. 1, 2018, or until a customer cancels service before then in the designated exchange.

If customers feel they are being underserved, they can petition the PUC to restore service.

The bill is still in committee, meaning it could take some time before coming to the floor for a vote. State Rep. Jesse White, D-Cecil, represents many rural constituents and has been monitoring the bill to ensure they’re protected.

“This is still very much a work in progress,” White said. “We really have been giving it a lot of attention. There are valid concerns and that’s a big part of the puzzle everyone is working around out here.”

White, who said he doesn’t have a landline at his Cecil Township home, said he understands the need to protect rural customers even though there has been a general progression toward cellphone use.

“If you can’t make everyone accessible, then we have a major problem,” White said. “But if you can demonstrate the technology exists and the costs won’t be passed onto the consumer, I think this is a conversation we’re willing to have.”

He’s also concerned how deregulating the industry could affect rates.

Steve Samara, president of the Pennsylvania Telephone Association that lobbies for rural phone companies, acknowledged that the legislation could have separate effects on rates for different areas. The bill might bring more competition to urban and suburban areas, meaning lower rates, but reduce competition in rural areas.

In 2019, the legislation would remove the “universal service fund” that helps stabilize rates for rural customers where it’s more expensive to offer service. Samara’s group opposes that move and is pushing to keep the service fund.

It’s unlikely rural customers will totally lose landline service because of “safety net provisions” in the legislation, he said.

“It’s not a scenario we expect, but there is that (PUC) provision there,” Samara said. “We agreed that there needs to be some safety net there.”

He admitted that more people are moving away from traditional landlines, but insisted there is still a need with the “shrinking population” that relies on them. Samara hopes the bill doesn’t cause an “extreme pressure on rates” for rural customers.

“There’s been a migration from traditional landline phones to cellphone and other services,” he said. “We expect that to continue, but some people always think there will always be a percent of the population that likes their landline phones.”

Mike Jones has been a news reporter since 2005, covering crime, state and municipal government, education and energy. In addition to working at the Observer-Reporter, he also has spent time at the Charleston (W.Va.) Daily Mail and He holds a journalism degree from West Virginia University.

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