Letter-to-the-Editor
(785 words)
"SBC
should hang up the phone on flawed rate hike plan"
"Monopoly"
is a great board game, but as public policy for providing phone service in
the Information Age, it just doesn't work.
When
Texas-giant SBC rammed a bill through the Illinois General Assembly in record
time last May, the effect would have been a doubling in rates for residential
and small-business phone consumers across Illinois, a net job loss, and the
elimination of competition.
The
relentless drive for monopolistic power - reminiscent of the robber barons
who controlled the rail, steel and oil industries in the late 19th century -
threatens everyday consumers. I was present in 1999 when the Illinois
Commerce Commission (ICC) narrowly approved the merger of Ameritech and SBC.
I heard the promises made by SBC and have seen the disregard for those
pledges since.
At
that time, SBC knew the score. It knew the rates it could charge and agreed
to be locked into those rates. Then, after paying more than $123 million in
fines to state and federal regulators for lousy service and anti-competitive
practices, it chose to do an end-run around the ICC by pressing the General
Assembly for a new rate hike.
But
in their haste to drive out competition big and small, SBC steamrollered a
deeply-flawed bill through the State Legislature.
In
a well-reasoned decision by U.S. District Court Chief Judge Charles Kocoras,
the ICC was ordered to refrain from implementing those new sections of the
Illinois Public Utilities Act allowing SBC to double the rates it charges
competitors to use its lines pursuant to the 1996 federal Telecommunications
Act.
Judge
Kocoras cited several reasons for the ruling. First, state utility regulators
such as the ICC have the "professional staffs and expertise" to
make decisions about utility rates, whereas legislative bodies may not have
"comparable expertise".
Judge
Kocoras said the legislation "displaces the ICC's rate-making
authority" and by doing an end-run around the Commission, SBC was
allowed to "avoid its burden of proof" required by federal law to
prove a rate hike is justified. Finally, the judge said the legislation
"conflicts with federal law".
It's
time for SBC to hang up the phone on this flawed rate hike plan once and for
all.
That's why I've asked ICC Chairman Edward Hurley to respect Judge Kocoras'
injunction and decline any appeal of the ruling.
There
is clearly precedent for a state agency to refrain from using taxpayer money
in needless litigation to defend a deeply flawed state law.
The
last time so many lobbyists descended upon the State Capitol was four years
ago, when the "Illinois Wine and Spirits Industry Fair Dealing Act of
1999" was passed, giving one company a distinct edge in the region's
liquor distribution industry. The law was challenged and the Illinois Liquor
Control Commission was named as a defendant. A federal judge issued an
injunction barring the Liquor Control Commission from enforcing the new law
and the Commission opted not to appeal, effectively ending the state's
participation in the litigation and saving the taxpayers thousands of dollars
in legal costs.
Faced
with a severe fiscal crisis, the State of Illinois shouldn't waste a penny of
taxpayer dollars on unneeded litigation. SBC can't win the case. Enough is
enough.
Unlike
the robber barons who operated in the 19th Century Machine Age, we're now in
the 21st Century Information Age, where consumers and entrepreneurs alike are
best-served by having wide choices in the free market, a principle at the
core of our economic democracy. As a society, we are better off with vigorous
competition among telecommunications companies of all sizes in the
marketplace as the best way to ensure quality service and reasonable prices.
Pundits
have made hay of the contrary view Governor Rod Blagojevich and I have of the
SBC issue. Yes, we disagree. As a longtime consumer advocate, I cannot remain
mum on an issue I feel so strongly about. And while Gov. Blagojevich and I
disagreed on this one bill, we still share basic beliefs about strong ethics
in government, and investment in better education, health care, and public
safety for the people of Illinois.
In
1982, I launched a grassroots effort to create the Citizens Utility Board
(CUB). Now celebrating its 20th anniversary, CUB has become a national model
of consumer empowerment, taking on Illinois' giant utilities and winning. CUB
was part of the broad coalition of opponents to SBC's plan, which included
the American Association of Retired Persons (AARP), U.S. Department of
Defense, and Illinois Citizen Action. The SBC juggernaut was stopped by
consumers banding together.
Judge
Kocoras sent a message loud and clear to SBC: your plan to raise rates and
eliminate competition is dead. Hang it up.
Sincerely,
Pat
Quinn
Illinois
Lieutenant Governor
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