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Archive for Thursday, January 23, 2003

SBC hopes to avoid state regulation

January 23, 2003

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— Salvos in what could become this year's biggest intra-industry battle at the Statehouse were fired Wednesday as local telephone giant SBC pleaded for immunity from state regulation of its high-speed Internet and DSL services.

SBC-Kansas President Randy Tomlin told members of the House Utilities Committee that unless House Bill 2019 is passed, the company won't spend millions of dollars expanding DSL services in Kansas because the company would lack the "regulatory certainty" to assure return on investment in its broadband infrastructure.

Without the bill the Kansas Corporation Commission would be free to allow SBC competitors to "piggyback" on SBC systems, Tomlin said.

Last week the KCC said it would review rates SBC charges competitors for access to its system.

Tomlin told lawmakers the state would lose millions in investment, jobs and the SBC extension of competitive broadband service into currently underserved rural areas, if the bill fails.

"This bill will spur investment, helping the economy," Tomlin said. "And it won't cost the state of Kansas a dime."

Tomlin and an SBC consultant were peppered by questions from committee members who for the rest of the week will hear only supporting testimony from SBC allies on the bill.

Opponents won't testify until next week, but SBC competitors have already made it clear they will fight the legislation because they say it will give the state's dominant local telephone service provider the power to monopolize the market.

"HB 2019 will have devastating consequences for the already-struggling telecom industry in Kansas. Any company trying to compete with SBC will be in serious jeopardy," said John Ivanuska, chairman of Kansas for Competitive Choices in Telecommunications.

The coalition includes companies large and small; among them AT&T and Worldnet, a subsidiary of the World Company, which also owns the Journal-World.

The committee considering the measure includes Rep. Tom Sloan, a Lawrence Republican.

"How do I prevent a digital divide in my county, state?" Sloan asked Tomlin. "How do rural Douglas County residents benefit" if the bill passes? When does DSL come to Lecompton?"

"SBC would come to rural Douglas County when it's a good investment," Tomlin responded. "Will we go to every Kansas community? No. That might not be the answer that gives you the warm and fuzzy for Douglas County."

But Tomlin told the committee the bill would guarantee SBC would offer DSL services in more than the 24 communities where it is currently offered.

He said after Oklahoma last year passed the same legislation sought in Kansas, SBC began offering the service in 37 additional rural towns. SBC seeks similar laws this year in Missouri and Texas.

The committee, which meets in Room 526-S, will resume hearings at 9 a.m. today and continue until noon. Among those slated to speak: Debbie Snow of the Communications Workers of America, a union that represents many SBC workers.

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