Coming Illinois Telecom Rewrite Inspires Lobbying, Emphasis on Technology

The telecom portion of the Illinois Public Utilities Act is to expire July 1, under the 2010 law. The law was “what we call halfway deregulation,” which still contained several safe harbor provisions with an eye toward consumers, said AARP Associate State Director for Illinois Scott Musser. These “bells and whistles” help maintain access to landline phones and are key to affordability and what AARP members might need, he said. Technology changes haven’t justified changing certain regulations, he said, saying 2012’s Superstorm Sandy showed people “need to still have that backbone of the landline telephone."

What concerns AARP is talk that industry wants to remove these safe-harbor plans, encompassing everything from service quality to carrier-of-last-resort obligations, Musser said. “Something could pop and try to move quickly,” he said of a potential rewrite bill. “Sometimes people don’t know about it till it’s already too late.” AARP has developed talking points to emphasize its consumer priorities, but is often at a loss against vague rhetoric from companies pushing for modern reform, said Musser. “Everyone’s waiting around to see.” AARP met with AT&T in January and February, but has heard only “vague, big picture stuff,” he said.

"By adopting a modern communications law, our state lawmakers, without spending scarce taxpayer money, can fuel additional private sector investment in wired and wireless broadband networks that create jobs and improve lives,” AT&T Illinois President Paul La Schiazza wrote in the Rockford Register Star (http://bit.ly/13Olsg4). “Updating the state’s telecommunications law is an easy decision. Our surrounding states have already done it, and a modern law will create jobs and strengthen the broadband networks our families, businesses and public safety officials rely on every hour of every day.” AT&T hopes to answer policy makers’ questions about the industry, the telco’s spokesman said, saying there’s a “long, long way to go” in the legislative session. “But this is an easy issue,” the spokesman said. “Consumers and businesses are defining the industry with their choices. They've decided broadband -- wired and wireless -- is what they want. It provides remarkable consumer opportunities and it creates jobs. The issue is how to attract more private sector investment in broadband networks to meet the needs of consumers, job creators, public safety officials, schools, hospitals and many others.” The spokesman declined to say what the telecom priorities might be beyond the need for laws that reflect “rampant competition and innovation in the marketplace.”

The Illinois Partnership for the New Economy & Jobs has emerged to lobby for what it sees as the proper rewrite. At the end of January, founding member AT&T announced the partnership (http://soc.att.com/Z66mdc) along with a study touting the benefits of mobility and tying those to greater jobs for the midwestern state. It listed coalition members as AT&T, the Illinois Retail Merchants Association, Illinois Manufacturers’ Association, Illinois Chamber of Commerce, Taxpayers’ Federation of Illinois, Women’s Business Development Center, Illinois Business Roundtable, Illinois Black Chamber of Commerce, Illinois Hispanic Chamber of Commerce, Chicago Southland Chamber of Commerce, Greater Springfield Chamber of Commerce, Chicagoland Chamber of Commerce and Illinois Telecommunications Association. At the end of February, AT&T announced more members in the coalition (http://soc.att.com/YQnxU9), with the addition of over 50 small business economic development organizations. That brought the coalition to 70 members total.

"The biggest priority is to see a law that promotes further private sector investment in the state’s internet infrastructure,” said Partnership Chairman David Vite, president of the Illinois Retail Merchants Association, by email. “The challenge here is clear: if our communications laws aren’t attracting more private investment in internet infrastructure, then Illinois misses out on economic opportunities and improvements in education, healthcare and public safety. People understand the world has changed. The internet changed everything."

AARP and others aren’t convinced. Local Union 21 of the International Brotherhood of Electrical Workers has begun meeting with legislators to discuss the telecom rewrite, according to its website. “Quality communications in Illinois depends on the highly skilled unionized jobs our IBEW members perform for our customers in Illinois,” the union said. “Telecom providers have started their lobbying efforts to sway the Illinois legislature. Many representatives are only hearing one side of the story.” The telecom rewrite will impact the union “obviously a lot,” AARP’s Musser said, pointing to how regulation changes may affect facilities. Other stakeholders who are watching and are likely to play a role in debating the legislation include the Illinois Citizens Utility Board and the attorney general’s office, he said. Illinois House Rep. John Bradley (D) introduced House Bill 2385 in February, which would extend the sunset time until July 1, 2016. The bill is still making its way through House committees. Musser said he wouldn’t mind pushing the sunset back, given the safe harbor provisions in the 2010 law. But to delay the rewrite until 2016 would mean turning away economic opportunities, Vite countered. “There will always be naysayers -- there always have been -- but they don’t have an argument here,” he said. “Everyone in this state will benefit from modern communications laws to bring more private sector investment in internet infrastructure."

Principal members of these coalition groups offered statements suggesting modern communications translated into jobs and calling for legislation to match that. Broadband investment had created over 13,000 jobs in the state throughout 2010 and 2011 and nearly 20,000 “mobile app economy jobs,” according to the AT&T-funded study (http://soc.att.com/10uPJKH), done by the managing directors of Navigant Economics, which the telco prominently cited in January. The 26-page policy brief encouraged legislators to kill “anachronistic” legacy regulations that might dissuade providers from investing in broadband facilities. “Investment capital is not an unlimited resource,” the paper said. “Companies allocate their investment resources among competing demands, and regulatory requirements that force capital into the maintenance and deployment of outmoded legacy technologies likely divert resources from more highly valued uses in broadband and other modern technologies. ... It is perverse policy to establish rules that divert resources away from technologies that grow our economy in favor of outmoded infrastructure that fewer and fewer customers want."

The telco’s website refers incredulously to rules that “require investment in 100-year-old technology, the copper landlines that only allow phone calls,” contrasting the technology with broadband. In his op-ed, La Schiazza referred to how broadband plays a role in ambulances and helps doctors. An AT&T ad featured in an Illinois political publication emphasized the wireless needs of emergency communications. But AARP believes “you don’t leave anybody behind,” Musser said, emphasizing his organization’s desire to preserve consumer safeguards. He questioned whether new technologies like AT&T’s Wireless Home Phone equal a landline, pointing to higher costs and a reliability that falls short of landlines. These questions all surround the rewrite, he said. All the state’s consumer advocates are “as engaged with this as much as we can be at this point,” Musser said: That’s without any formal legislation yet present, and with a sunset deadline for current law approaching daily.