Telecommunications policy in Maine is at a crossroads. For more than 100 years, telecommunications service has meant voice service over copper lines operated by monopoly companies. But that world has changed, and Maine public policy is changing with it.
Since competition was ushered into the marketplace in the 1980s and 1990s, innovation has flourished, and customers now can choose from a wide variety of advanced telecommunications services — from cable telephone service to mobile phones to Internet-based services such as Skype to satellite phones. As these options have expanded, prices have come down and services have improved.
Two years ago, the Maine Legislature recognized these fundamental market changes by passing a law that deregulated most telephone services. The only remaining regulated service was known as “provider of last resort” service, but the scope of this service was not well-defined. The hope was that deregulation would encourage competition and lower prices in Maine while protecting Maine consumers who don’t have access to competitive telecommunications services.
In many respects, deregulation has met its goals. However, a filing with the Maine Public Utilities Commission last November by FairPoint Communications exposed a significant gap in the provider-of-last-resort law that needs to be addressed. This gap could cost Maine telephone consumers tens of millions of dollars and set back Maine’s efforts to expand access to broadband service.
FairPoint’s filing had two parts. The first part was a proposal to raise rates by $2 per month on the 29,000 customers receiving provider of last resort service from FairPoint. The second part was a proposal to raise “universal service fund” fees by $5 per month on all phone users in Maine — including wireless, cable and landline. In accordance with existing statute, Fairpoint’s filing asserted that this increase was needed to maintain nearly 300,000 poles throughout Maine, just in case someone wanted to buy provider-of-last-resort service from FairPoint.
The total cost of FairPoint’s request: $67 million. The members of the Legislature’s Energy, Utility and Technology Committee recognized this as a staggering sum for Maine people to pay for a type of phone service that, in most cases, they don’t use. We wanted to have the ability to hit the “pause” button on a fee increase that is not truly a rate case but that is, in essence, a policy change.
Deregulation of a complex and essential industry such as telecommunications is, by nature, a multistep process. We recognized that, in this case, further redefining what it means to be a provider of last resort is the logical next step in that process. Given the complexities of the issue, though, the EUT Committee needed more information to begin crafting those policy changes.
So, we drafted legislation — LD 1479 — that would allow the state to develop policies that better enable the transition to newer technologies such as broadband. LD 1479 also forestalls any potential increase in universal service fund fees until late 2015 — which gives the Legislature enough time to take action to mitigate or avoid any unreasonable fee increases on Maine phone customers.
In February, the committee passed LD 1479 on a 10-3, bipartisan basis. We were pleased to vote with the majority. We are now encouraging our colleagues in the House and Senate to support LD 1479.
LD 1479 protects the interests of Maine phone customers and gives us the tools to move Maine telecommunications policy into the 21st century.
We hope our colleagues agree and will work with us to bring the bipartisan LD 1479 to the governor’s desk.
Reps. Sara Gideon, D-Freeport, and Lance Harvell, R-Farmington, are members of the Legislature’s Energy, Utilities, and Technology Committee.