Asbury Park Press

NJ Telecommunications Deregulation Proposal, Backed By Verizon, Draws Fire

Asbury Park Press — Sunday, March 20, 2011

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It seems simple enough: Craft legislation that moves regulation of the telecommunications industry from an era when Ma Bell ruled and into a world where rotary phones are obsolete.

But despite some high-powered support in the Legislature, the Market Competition and Consumer Choice Act, set to be voted on by the state Senate today, has set off a firestorm of criticism and an expensive media blitz focusing on the bill's alleged ills and benefits.

Consumer groups have claimed that the bill, S-2664 in the Senate, is a sweetheart deal for telecommunications companies, specifically Verizon, and would allow them to degrade customer service and raise prices. Verizon — a telecommunications giant that provides Internet, cable television and phone service to vast swaths of New Jersey — disagrees.

"These 100-year-old regulations were put on the books when telephone service was a pure monopoly," Dennis Bone, president of Verizon New Jersey, said last week. "This is about creating jobs, creating investment, creating a better business investment for New Jersey. (Verizon invests) capital in states where we get the best return. New Jersey is notorious for its onerous sets of regulation."

Among those regulations that could be eliminated: Forcing companies to give credits for telephone outages that last more than 24 hours and to provide for public access cable television for municipalities.

On Wednesday, Verizon and a gathering of advocacy groups — including New Jersey Policy Perspective, New Jersey Citizen Action and AARP — held dueling news conferences to highlight the bill, which passed the Assembly, 66-7, without much fanfare Jan. 25.

While Bone argued that the bill merely upgraded the law to reflect the competitiveness of the market, advocates claimed that similar laws in other states had had a disastrous effect on service and on consumer protection.

"The states that have deregulated similar to this bill have seen rates increase and seen drops in service quality," said Nathan Newman, the author of a report that paints the bill as a bad deal for New Jerseyans.

Bone, who served on Gov. Chris Christie's transition team after his 2009 election, previously has said that competition and the desire to keep customers from switching to another provider will keep service levels high.

A published report on Saturday said that Bone promised in a letter to Senate President Stephen M. Sweeney, D-Gloucester, Senate Minority Leader Tom Kean Jr., R-Union, that the company would not raise rates on basic residential phone service for two years from the date of the signing of the bill.

The New Jersey State League of Municipalities has jumped into the fray as well, stressing the danger the bill poses for municipalities' cable television agreements by, among other things, reducing a company's obligation to provide free cable and internet connections for municipal and school buildings and taking away the public-access mandate.

"Today the League of Municipalities continues to oppose the Market Competition Consumer Choice Act because it will result in the loss of important benefits and services to which communities are currently entitled," said Piscataway Mayor Brian Wahler, chairman of the league's telecommunications committee.

The bill is being sponsored in the upper house by Sweeney, Kean and Sen. Raymond Lesniak, chairman of the Senate Economic Growth Committee.

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