Kansas House approves telecom deregulation bill

Kansas would begin to phase out consumer-financed subsidies for universal landline service under a House-approved bill that also would lessen state regulation of telecommunications.

The House approved the measure 118-1 on Monday. The bill now moves to the Senate, where it is expected to have bipartisan support.

With more Kansans relying on wireless communication, the bill represents a significant shift away from state subsidies to companies so that the firms can bring adequate landlines to even the most remote and sparsely populated rural areas. The subsidies, in place since 1997, are financed with a charge on customers’ monthly landline and wireless bills.

The current universal service charge is 6.42 percent, which is expected to raise almost $63 million from March through February 2014. Under the bill, companies could choose to operate under lesser state regulation but would see their subsidies decline. Some supporters of the bill think the special charge could disappear altogether in four years.

“We have this mentality, ‘If I don’t have a wire, I can’t make a phone call.’ That’s not true,” said Rep. Scott Schwab, an Olathe Republican who supports the bill. “That copper line is being replaced with an antenna, and it’s more reliable.”

The bill follows up on laws enacted in the last decade to move Kansas away from regulating rates for telephone service as consumers embrace wireless devices. The measure also results from an agreement involving AT&T Inc., the state’s largest phone service provider, and other telecommunications companies.

“It largely reflects what we’re seeing in society — increased use of cellphones, decreased use of landlines,” said Sen. Pat Apple, a Louisburg Republican and the chairman of the Senate Utilities Committee, which will take up the measure next. “There are more options, and with more options come competition.”

A 2006 state law deregulated prices for bundles of services that included wireless, Internet access, cable TV or other video and moved toward deregulating rates for local service in exchanges where competition existed. A 2011 law went further, allowing companies to avoid most state price caps.

This year’s bill would allow those companies to avoid even the Kansas Corporation Commission’s consumer protection regulations and minimum quality-of-service standards.

In the House, the only “no” vote came from freshman Rep. Larry Hibbard, a Toronto Republican. Hibbard said landlines are vital in some rural areas, and they could see their rates rise. He also suggested that many older Kansans find wireless devices too confusing to use.

“This bill may come back to haunt rural Kansas,” Hibbard said.

Republican Gov. Sam Brownback would have to carefully review the measure if legislators pass it, spokeswoman Sherriene Jones-Sontag said.

“However, he does have a long history of pushing for deregulation of telecommunications,” she said.