No one benefits when one company has a monopoly
Point CounterPoint: Unfair phone regulation?


(Published: May 8, 2003)

The Fairbanks Daily News-Miner printed in its May 4 editorial, "Just looking at the latest version of House Bill 111 should make Alaskans shudder at its content and at how fast and with so little public attention it has progressed. ... The bill as it now reads is a piece of special interest legislation aimed at benefiting primarily one company -- ACS."

HB 111 began as a simple bill introduced by Gov. Frank Murkowski to extend the life of the Regulatory Commission of Alaska. Big money politics and closed-door dealing have changed the course of this bill. Alaska Communications Systems has turned to the Legislature to accomplish what it has been unable to do before the RCA, the Federal Communications Commission, the courts or Congress. If ACS succeeds, your phone rates will go up.

HB 111 includes amendments that will permit ACS and all monopoly telephone companies to depreciate equipment faster, resulting in rate increases of up to $100 million statewide. Further, where competition in local phone service has been approved but not necessarily initiated, the monopoly phone company may be fully deregulated, free to raise rates and deny or discriminate in service. At the same time, these monopolies will be able to force competitors to raise rates by increasing the competitors' costs -- all without review by the RCA.

To justify its amendments, ACS will tell you it just wants fair competition. It wants revenues to cover its costs, no matter how high, plus a rate of return. ACS says that the RCA is biased -- the proof being the presence of competition itself. Finally, it even says that without change it is in danger of going out of business -- but that's not what it tells the SEC.

The fact is competition -- as regulated by the RCA and the FCC -- is fair, and it benefits consumers. The U.S. Supreme Court has found the rules for competition to be just and reasonable. ACS is recovering a just and reasonable portion of its costs. As it should, ACS is feeling the pressure to reduce costs and win customers through better service. Frankly, it would rather have a legislative fix.

How can you stop this? Call the governor's office at 1-907-465-3500, or e-mail him at Governor@gov.state.ak.us <mailto:Governor@gov.state.ak.us> and let him know you support the original version of HB 111 that he introduced, extending the RCA without amendments.

Dana Tindall is senior vice president for Legal and Regulatory Affairs at GCI.