Federal telephone law brings promise of competition:

"Consumer Bill of Rights" works to ensure safeguards for Indiana consumers in the face of deregulation.

Hoosiers are facing sweeping changes in how they receive and pay for telephone service. Many of these changes are in response to recently passed federal legislation that mandates states to open up the local telephone service market to competition and relaxes regulation on existing telephone monopolies Ameritech and GTE.

As far reaching as the federal bill is, however, much will still depend on how state commissions like the Indiana Utility Regulatory Commission (IURC) implement the federal mandates and on proceedings like the IURC's ongoing investigation into telephone competition.

Perhaps the most significant aspect of the federal legislation is that it requires local telephone monopolies to interconnect with potential competitors and to make their facilities and services available for use by those competitors (called "resale"). Resale would allow companies like AT&T to purchase local telephone service in bulk at discounted rates and then resell that service to customers as if it were AT&T's.

In addition, the federal law removes many of the restrictions and consumer protections that were put in place to curb the abuse of monopoly power by multinational telephone companies like Ameritech and GTE which still hold state franchised exclusive service territories. GTE has already gotten into the interstate long distance business and Ameritech claims it will meet a federal "checklist" by fall of 1996 that would allow it into the long distance market.

These changes bring significant threats as well as the promise of competition. First and foremost is the threat of mandatory Local Measured Service (LMS). Many telecommunications giants like Ameritech, AT&T and GTE want to compensate each other for "interconnecting" based on minutes of use, even. In other words, if an AT&T customer called an Ameritech customer, Ameritech would want AT&T to pay for every minute of that phone call. Of course, AT&T would then want to charge its customer in the same way. This could ultimately force all customers into LMS.

CAC and its allies have taken a stand against "usage based" payment schemes that would lead to LMS because here is no measurable relationship between local minutes of use and costs incurred by the local telephone company. In cooperation with the American Association of Retired Persons and the Office of the Utility Consumer Counselor, CAC developed a Consumer Bill of Rights in the telecommunications marketplace.

Joined by several other senior and consumer organizations including the Indiana Retired Teachers Association and United Senior Action, consumers were able to get a majority of the companies participating on the Executive Committee of the IURC's competition investigation to join in support of the Consumer Bill of Rights and recommend that the IURC adopt it. Ameritech, GTE and AT&T, the biggest proponents of LMS in the IURC investigation, have refused to endorse the Consumer Bill of Rights.

The IURC investigation will continue for many months, most likely with multiple rulings throughout the summer and fall of 1996. CAC will continue to press the IURC to adopt the Consumer Bill of Rights and work to ensure fair and affordable flat monthly rates for telephone service while increasing quality and choices of both services and service providers.

For more information, call CAC at 1-800-201-1210 or e-mail to staff@citact.org.

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