About 93,000 low-income Tennesseans would pay $3.50 per month more for basic landline phone service with passage of legislation moving quickly through the Legislature with support of AT&T, a company now losing money under the present system.
“It ends a mandate to fund social programs without being reimbursed,” said Senate Majority Leader Mark Norris, R-Collierville, in the only reference to the provision within SB1180 during a Senate committee hearing.
The measure — known as “the AT&T bill,” though Norris pointed out that it impacts other telecommunications companies as well — was approved unanimously by the Senate Commerce Committee and awaits a Senate floor vote this evening. A House committee, meanwhile, approved the companion bill last week — sponsored by House Majority Leader Gerald McCormick, R-Chattanooga, unanimously without any discussion.
The provision on “Lifeline” service, intended to assure the poor have access to basic phone service, is part of a package to eliminate what McCormick called in brief remarks to the House committee “obsolete language” and “regulatory underbrush” that could “hinder investment in Tennessee.”
The U.S. Congress last year passed a law that reduces the federal payment toward covering the cost of “Lifeline” service to a flat $9.25 per month, eliminating a separate fund that also subsidized state-mandated “Lifeline” reductions.
In Tennessee, a further reduction of $3.50 per month had been mandated with no state dollars to pay for it, according to AT&T spokesman Bob Corney. With the federal subsidy for reimbursement of the state subsidy gone, phone service providers now absorb the full loss, he said.
Tennessee’s $3.50 per month reduction applies only to landlines and about 93,000 households are receiving the benefit, according to a brief filed with the Tennessee Regulatory Authority by the Consumer Advocate Division of the state attorney general’s office.
AT&T and other providers petitioned the TRA to end the $3.50 reduction last year, but the TRA — substantially overhauled by legislation enacted last year at the urging of Gov. Bill Haslam — has not ruled on the petition. The bill, then, effectively bypasses the TRA by legislative enactment.
The attorney general’s office opposed reduction in the brief filed with TRA, noting it comes with phone rates having increases and another federal subsidy — $35 for installation of basic service — ended. The brief, written by Assistant Attorney General Ryan McGeehee, argues that less drastic alternatives are available — for example, restricting the reduction to apply only to basic service, not for those who add extras such as voice mail, or phasing out the reduction over a period of time.
Asked whether Attorney General Bob Cooper also opposes the Legislation, spokeswoman Sharon Curtis-Flair sent this statement via email:
“The future of Tennessee’s Lifeline has been argued in front of the TRA and a decision is pending…. Since the issue is pending in a proceeding before TRA, which is capable of making an informed decision, we have not taken a position on the legislation.”
Corney said the $3.50 in many cases now goes to customers who bundle services and for them is insignificant.
“For most customers, it’s irrelevant. For us, it’s an unfair cost not borne by our competitors,” he said.
Changes to telecommunications law under the overall bill also includes ending the TRA’s current authority to take complaints from consumers. Norris and Corney said the complaints can now go instead to the attorney general’s consumer advocate division or the state office of consumer advocate, part of the Department of Commerce and Insurance.
AT&T has registered 16 lobbyists for the current legislative session, according to Tennessee Ethics Commission records. The company also operates a political action committee that is among the more generous donors to legislative candidates.
In the past two years, AT&T’s PAC contributed $93,100 to legislative candidates in 2011 and about $177,000 in 2012, including a $21,400 donation to Haslam, according to Registry of Election Finance reports.