The Bellsouth Bill - Deregulating Telecom in Alabama

As advancing technology continues to transform the telecommunications industry, it is becoming more and more apparent that government regulations have not kept up with the revolutionary changes that have occurred. A market that was once dominated by monopolies providing traditional landline services has broadened and become increasingly competitive. In most local markets, cable, wireless, and satellite providers now compete directly with telephone companies to meet the demand for voice, video, and data communications.

However, the combination of federal and state regulations currently in effect largely assume a market that is still dominated by monopolies. This highly-regulated environment discourages new market entrants, penalizes innovation, creates market uncertainty, and restricts competition.

One proposal winding its way through the state legislature this session would take a big step towards deregulation of the telecommunications industry in Alabama. Called the Communications Reform Act of 2005, it would remove the Alabama Public Service Commission’s power to regulate broadband services and “bundled offerings” by local exchange carriers. (“Bundled offerings” are packages consisting of basic telephone service plus “premium” services like call waiting, voice mail, caller ID, internet service, etc. Local exchange carriers are companies that provide traditional landline telephone communications.)

The PSC would retain its authority to hear complaints, enforce contractual obligations, and set standards for new market entrants. It would also retain the authority to regulate basic telephone service, and rate increases for basic service would be limited to the inflation rate.

Even so, all three members of the PSC, two of whom are Republicans, have announced their opposition to the bill. Commission Chairman Jim Sullivan says, "We believe that this legislation will guarantee rate increases." Commissioner George Wallace, Jr. brought up the memory of dear old dad in expressing his opposition:

Wallace said he rode with his father back to the Governor's Mansion after the elder Wallace in 1986 announced he was retiring from politics. The governor asked the state trooper driving the van to stop along Dexter Avenue so he could look at the Capitol and reflect on the past, Wallace said.

"And the only thing he said in that moment was, "Don't let the rich and powerful take over at the expense of the people.' And I think this bill will do that," Wallace said.

The senior George Wallace left the Governor's office in 1987. It's possible that Alabama's current telecom regulations would have been well-suited for the market as it existed then. However, the Legislature should recognize the realities of 2005, and should pass this bill into law.