Pennsylvania Unleashes the Bells p.

By: George Garneau New telecommunications law creates pathway to deregulate phone companies; newspapers, phone companies 'sort of happy with it'
PENNSYLVANIA'S NEW telecommunications law creates a pathway to deregulate phone companies but shifts much regulatory responsibility to the state Public Utility Commission.
The compromise bill balances the interests of phone companies that want to expand into unregulated services against the interests of existing information providers that the phone companies will confront - mainly newspapers and cable television systems.
"Nobody's happy with it, but everybody's sort of happy with it" said Larry Boyle, general counsel for the Pennsylvania Newspaper Publishers Association. In other words, "We didn't lose, and they didn't win."
While newspapers succeeded in scuttling a provision that would have given phone companies automatic rate increases, the bill moves the battle over safeguards from the Legislature to the PUC.
"It sets up a mechanism to obtain [telephone] deregulation but it gives us an opportunity to make our case at the Public Utility Commission," Boyle said. "We're fortunate to have a strong PUC."
Newspapers argue that without strong protections, deregulated phone companies will use their monopoly control over telephone lines and revenue from regulated phone services to squash competing information providers.
To enter unregulated businesses, the law requires phone companies to apply to the PUC and file plans. But, as the saying goes, the devil is in the details, and important ones remains to be decided by the PUC.
Other provisions included:
* A ban on cross-subsidization, or the practice of making phone users pay the costs for their phone company to enter new businesses. The law requires the PUC to establish a formula for allocating costs so ratepayers do not pay for services they do no use.
* Services offered must be "competitive," a criterion judged by "the presence and viability of other competitors, including market shares."
* The PUC can require Bell of Pennsylvania to establish separate subsidiaries to provided unregulated services but only if it finds "substantial possibility" of unfair competition.
* In the interests of user privacy, phone companies are prohibited from disclosing information about individual customer usage and equipment, except in aggregate form.
* The PUC may open local phone service to competition.
* Stronger penalties allow the PUC to deregulate services in the absence of competition.
Two years in the making, the law passed the House and Senate in June and was signed by Lt. Gov. Mark Singel July 8.
The Pennsylvania bill appears to be less favorable to newspapers that its Illinios counterpart but more favorable than California's roughly equivalent to New Jersey's according to PNPA's comparison.
"There are a lot of items in it that do level the playing field," said Stanley Singer, president of the Pennsylvania Cable Television Association.
Bell of Pennsylvania, which expressed satisfaction with the final bill, argued that it needed deregulation in order to raise enough money to encourage investors to fund a new network, most likely of optic cable.
- Information supplemented by AP