The Communications Workers of America says when it comes to “stealthy” bills like S.B. 1611 that deregulate telecommunications in California, “no price is too high — no lie is too big.”

AT&T and the American Legislative Exchange Council (ALEC) are back again fighting for more deregulation of California’s telecommunications industry with a bill that will strip oversight of vital telecommunications services and stop punishing bad actors that leave customers without telephone service, sometimes for weeks.

California legislators are typically not responsive to the wholesale deregulation efforts that seem to draw support in more conservative states, so AT&T’s lobbyists are trying a more “incremental” approach in the state. But AT&T has also inserted “stealth” language into the bill that would dismantle consumer protections, allow companies to abandon unprofitable landlines, and strip away important oversight “checks and balances” needed to ensure good service.

Sen. Padilla’s top corporate contributor is AT&T.

S.B. 1611 illustrates that AT&T can buy its way into any legislator’s office, Democrat or Republican. The bill’s chief sponsor, Rep. Alex Padilla (D-20th Senate District) has received more contributions from AT&T than from any other corporation in both the 2006 and 2010 elections.

The bill ostensibly claims to limit its scope narrowly to “Voice over Internet Protocol” (VoIP) and “Internet Protocol enabled service.” That brings to mind services like “digital phone service” from cable companies or alternative telephone services like Vonage, magicJack or Skype.

S.B. 1611:

The bill would prohibit any department, agency, commission, or political subdivision of the state from enacting, adopting, or enforcing any law, rule, regulation, ordinance, standard, order, or other provision having the force or effect of law, that regulates VoIP or other IP enabled service, unless required or delegated by federal law or expressly authorized by statute. The bill would specify certain areas of law that are expressly applicable to VoIP and IP enabled service providers. The bill would provide that its limitations upon the commission’s regulation of VoIP and IP enabled services do not affect the commission’s existing authority over non-VoIP and other non-IP enabled wireline or wireless service….

To the layperson who generally believes services like Skype and Vonage might not deserve the same oversight as AT&T, Frontier, or Verizon — which provide Californians traditional landline service, consider Section 2 (a)(2) of the bill, which describes and defines VoIP and IP enabled service as anything that:

“Permits a user generally to receive a call that originates on the public switched telephone network and to terminate a call to the public switched telephone network” and “any service, capability, functionality, or application using existing Internet Protocol, or any successor Internet Protocol, that enables an end user to send or receive a communication in existing Internet Protocol format, or any successor Internet Protocol format through a broadband connection, regardless of whether the communication is voice, data, or video.”

This “narrow” deregulation bill just grew as wide as the Gulf of Mexico and can realistically allow any phone company in California to ignore state oversight and regulation forever.

Traditional telephone companies increasingly utilize exactly these technologies for calls placed over ordinary landline phones. Using broadband service to engage in two-way communications also qualifies. With this kind of defining language, virtually every telecommunications service in the state of California would win near-total deregulation and walk away from important oversight. The California Public Utilities Commission certainly understood the implications of this bill when the majority of commissioners came out in opposition to S.B. 1611.

Goodbye Universal Service: S.B. 1611 Allows Phone Companies to Abandon Rural and Economically Distressed California Communities

Several public interest groups also discovered language in the bill that is a perennial favorite of AT&T — eliminating universal service requirements that assure every citizen that wants a telephone line can get one. S.B. 1611 lays waste to Section 709 of the California Code which guarantees: “our universal service commitment by assuring the continued affordability and widespread availability of high-quality telecommunications services to all Californians.”

With that language gone, the state’s phone companies can unilaterally decide to abandon the customers they no longer want to serve. That could spell disaster in rural northern and eastern California, and leave low income residents with nothing but a dead phone line, unable even to call 911 in an emergency.

One AT&T Lobbyist for Every California Lawmaker

The importance AT&T places on influencing lawmakers is readily apparent when one realizes there are at least 120 AT&T lobbyists working in the state capital Sacramento, one for every California lawmaker.

But when one considers the track record of California phone and cable companies in the last few years, is less oversight and regulation the right answer?

• Verizon Sued for Providing DSL Speeds (Suitable for VoIP) They Can’t Deliver
• AT&T Gouges California With 25% Rate Increase
• California Landline Nightmare: Residents in Bakersfield in Tears Over Lousy Service
• Southern California Power & Phone Companies Blamed for Devastating Wildfires
• Verizon Bills Dead People: We’ll Settle for Half Because She’s No Longer Among the Living
• Frontier’s Goodbye Kiss: A $680 Final Bill for a Departing Customer
• Calabasas Residents Annoyed by “Corrupt and Deceptive” Charter Cable; Time Warner Cable Also Called Out
• Time Warner Cable Guy Arrives Late to Service Call, Leaves Claiming Homeowner Had “Bad Air”
• More Frontier Problems: Californians Wait Months on Refunds for Disconnected Landlines
• The Many Challenges of Charter Cable: Rate Increases for Seniors, Bankruptcy, Employees Attacked, Customers Hassled
• AT&T’s California Gold Rush: Company Lobbyists Spread the Money Far and Wide

“SB 1161 is a stealth vehicle for the gradual deregulation of telecommunications in California,” the Consumer Federation of California declared on their website. “Consumers need the CPUC to have the power to investigate complaints of bad service or unfair charges on bills, regardless of the technology used to provide phone service.”

Call to Action!

Consumers across California need to get on board immediately to stop S.B. 1611. You can file online opposition courtesy of Free Press, but it is far more effective to also directly phone your own legislator and leave a message to urge this bill be defeated. It literally takes only 2-3 minutes to call and the money and phone service you could save will be your own. Use this district finder to contact your representatives.

S.B. 1161 is scheduled for hearing in the Assembly Appropriations Committee this Wednesday, so time is of the essence!

Your modem needs an expensive upgrade, even if you own your own.

Frontier Communications customers may get less than they bargained for when calling the company about a malfunctioning modem or problem with service. Andrew, a Stop the Cap! reader from Tennessee discovered a simple service call left him stuck with two separate contracts for phone and Internet service, a major broadband speed reduction, and a sense that Frontier is willing to sign up customers without fully disclosing what they are selling.

Andrew reports he originally called Frontier to discuss a possibly damaged DSL modem. Upon hearing the model number, a Frontier customer service representative needed to hear no more — the modem “needed to be upgraded.” In fact, Frontier has been mailing postcards to customers with older modems not subject to monthly rental fees telling them their existing modem was “no longer supported” and needed to be replaced with a new model. In the fine print, the customer learns if they proceed, they will end up paying a monthly modem rental fee starting at $6.99… forever.

But things got much worse for this Frontier customer after he contacted the company to say he’d be keeping his current DSL modem, which turned out to be working just fine:

I was then told there would be about a $20 price drop on my next bill (for July). I asked the agent why and her response was, “oh, our prices are going down.” I said okay, thanked her and hung up the phone.

The next morning, I got an email from Frontier thanking me for my ”recent purchase or renewal of services,” further asking me to click and view the Terms of Service agreement for High Speed Internet (and to submit the PIN number associated with my account).

I then called Customer Service about the email. I was told that I had upgraded my phone service the previous day. It turned out that the agent upgraded my phone service to include their ”Digital Essentials” phone features package and had locked me into two price protection plans for both services. There was a one-year plan regarding the phone service and a two-year plan for the High Speed Internet.

I was shocked and informed the agent that I had made no such changes to my phone/Internet services and that I had simply called about cancelling a support ticket on my account regarding the modem.

He later tried to claim that I had given the previous agent authorization when I said okay after she had informed me about the price drop. I told him that was absolutely ridiculous, especially since she never discussed any upgrades to my phone service or any changes regarding my Internet. I asked him how it could be an authorization when what was done to my account was never fully explained (or asked for).

We’ve got a deal too good to refuse.

The Frontier agent then proceeded to hard-sell Andrew the same plan the former agent already applied to his account. The Frontier representative did not bother to mention the “upgrade” and “savings” he was getting included a drastic speed reduction. Frontier sold Andrew a package that included just 1.2Mbps broadband.   That is less than half the speed of his original 3Mbps service, for which he paid $40 a month with no modem rental fee.

Now Andrew is stuck with two contracts, both which carry early termination fees that will total well in excess of $100, the likelihood of a modem rental fee for a new modem he has never received and does not want, and less than half the broadband speed he used to get.

“I was never told by either agent I spoke with that my Internet speed would be [reduced] once the ‘upgrade’ was performed,” Andrew writes. “This, in my opinion, is fraud. Had I known a slower speed would be the end result of their price drop, I would have never [signed up].”

Now Andrew wants his old plan back and Frontier is stalling.

Frontier has a track record of retiring older service plans and packages, but leaving existing customers grandfathered on them until a representative can convince a customer to switch to something else. Unfortunately, newer plans often come with higher prices and more surcharges than older ones, which is part of the company’s effort to increase average revenue earned from each customer. Once off a discontinued plan, low level customer service representatives typically cannot re-enroll a customer.

But those who complain the loudest can get back the service they used to have, just by becoming a nuisance. Start by calling Frontier and asking to speak to a supervisor or manager. If that fails, ask to be transferred to the department that handles disconnections and threaten to drop all Frontier services if the company does not relent and put you back on the plan you started with.

Customers can also file complaints with their state utility regulators. In Tennessee, that is the Tenessee Regulatory Authority. Their online complaint form is here. Unfortunately, many states have succumbed to deregulation rhetoric and state regulators lack significant enforcement powers. But utilities that routinely filibuster state officials risk generating enough legislative energy to support a “re-regulation” effort, so most utilities will connect complainers to an executive level customer service department that can cut through red tape.

Customers can also file complaints with the Better Business Bureau and their state’s Attorney General. The more noise you generate, the more likely Frontier will satisfy your request.

Frontier customers are advised that anytime a customer service representative asks you to complete an online agreement using your PIN number, it signals you are about to commit yourself to a term contract or other major change in service that could prove costly to undo.

Always ask the Frontier representative to e-mail you a copy of the terms of the plan you are enrolling in, including broadband speeds, phone features, contract length and early termination fees.

Always read the agreement you are being asked to complete online.

If you have any questions, call Frontier before you sign. Some plans include a 14 or 30 day penalty-free cancellation provision. While this alone may not restore your old service, it can prove an important negotiating tool to win back the service you had before.

When the Oasis Therapeutic Foster Care Network in Albany, Ohio opened their April bill from Frontier Communications, they had the shock of their lives.

It totaled $177, 423.

The multi-page phone bill had pages of international calls, all to the same number in Taiwan, most lasting 120 minutes.  A two hour phone call to Taiwan runs Frontier customers $607.20 each, and with more than 450 calls listed on April 22, the agency’s bill ran up fast.

A subsequent bill added another $16,000 in calls to Taiwan the first day of the next billing cycle.

Kay Wheeler, the administrator of the non-profit care network, said that phone bill could have put the agency in financial peril. Oasis almost never makes international calls, and their usual bill runs an average of $250 a month.

Frontier, to its credit noticed the unusual calls, many of which ran simultaneously on that single evening in April, and was able to eventually block them. Frontier also called the agency alerting them to the unusual calls, but that did not stop the company from initially billing Oasis nearly $194,000.

Frontier initially told Wheeler they were willing to negotiate the long distance charges down to $3,000, but the company later credited the non-profit the entire amount.

The company suspects the PBX business phone system Oasis uses was hacked. The system, installed by a third party provider, still had its default password in place. With that password, a hacker could reprogram the phone system in a myriad of ways, including diverting calls abroad.

Unfortunately for Wheeler, and other business customers that wish to avoid international long distance fraud, blocking calls to international numbers does not come free. The price of peace of mind with an international call block: $195.

Wheeler considers it a small price to pay to prevent fraud like this from happening again, but Jim Barnet, a Stop the Cap! reader in Ohio who shared the story, wonders why anyone needs to charge such a high amount to block potentially fraudulent calls.

“It’s a software block, enabled with a few commands on their computer, and it stops fraudulent long distance calls Frontier often has to eat,” Barnet writes. “So why in the world discourage business customers from signing up with a ridiculous $200 fee?”

Frontier has released a comprehensive guide to help companies avoid this kind of fraud.

[flv width=”640″ height=”358″]http://www.phillipdampier.com/video/ONN Fraudulent Bill 6-19-12.f4v[/flv]

The Ohio News Network covered the enormous phone bill and talked with Frontier Communications about how this kind of calling fraud happens.  (2 minutes)

The AARP was surprised to learn Idaho was considering loosening the rules imposed on the state’s phone companies to complete repairs on out of service landlines within 24 hours. The organization, which represents the elderly, says the new rules are a serious threat to older Idahoans who are the least likely to have a cell phone and require landlines in case of an emergency.

The Idaho Public Utilities Commission is considering relaxing regulations governing service outages at the behest of CenturyLink and Frontier Communications, two of the state’s largest phone companies. Both phone companies argue that consumers have cell phone alternatives and do not need rapid repair of landline service. The companies also do not want to face penalties from regulators over incomplete or delayed repairs to out of service landlines.

CenturyLink claims the declining number of landline customers justifies the reduced regulations on the state’s phone companies.

But the AARP argued otherwise in opposing comments filed last week:

• Give telephone companies twice as long to repair outages (from 24 hours to 48 hours), and even more time if they occur over the weekend.  Opposing the change, AARP reminds the PUC of the importance of landlines to the elderly, and the fact that home and health emergencies also occur over the weekend.
• Remove any penalties to telephone companies for not restoring service within the allotted period of time.  Currently if service is not restored within the repair interval, customers can receive a one month service credit.  AARP says removing the penalty leaves little incentive for timely repairs and erodes consumer protections.
• Lower benchmark for fixing outages. Currently, at least 90% of service outage reports must be fixed, the proposed changes would lower that to 80%.  AARP says the lower benchmark could mean more consumers going without crucial service for a longer period of time.

Other claims made by CenturyLink – such as the assertion that its ability to deploy broadband suffers because its personnel are unreasonably diverted to repair work – are unproven and largely irrelevant to its obligation to maintain reliable telephone services, says AARP.

The elderly advocacy group argues the little known case is one more example of the need for Idaho to establish a Utility Consumer Advocate Office to ensure residential consumers are represented in complex regulatory matters.  Idaho is the only state in the West without such an office and one of a handful nationwide.

Pendleton County, W.V.

Pendleton County, W.V. residents are frustrated by another landline service outage afflicting Frontier Communications in the eastern panhandle region of the state.

The latest disruption began early Friday morning, leaving limited phone service throughout the county, with customers unable to dial any number that was not within the local 249 exchange.

Customers found cell phone service spotty, as it traditionally always is in the county, leaving some with no way to communicate and frayed nerves.

WHSV-TV reports Rosa Propst was extremely upset by the outage which dragged on for nearly two days. Propst’s father was hospitalized in another county and medical personnel could not reach her to report her father’s deteriorating medical condition.

Her ill father was also upset because he could not reach his daughter — or just about anyone else in Pendleton County over the weekend.

“I would have held Frontier responsible for not giving us an emergency services line where we could get to a hospital or call the hospital,” Propst told the station.

Frontier eventually found the problem — a series of fiber cuts over the length of 1,000 feet of cable. A Frontier spokesperson said the company had to replace about 7,000 feet of cable and had to find workers willing to climb 40 foot telephone poles in what was characterized as a rugged area.

Customers complained this was not the first significant outage for Frontier customers in the area.

The company eventually repaired service early Sunday morning.

Frontier has been accused of lacking network redundancy, letting phone companies bypass damaged lines by switching to backup infrastructure.

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WHSV Harrisonburg Customers in Pendleton County Frustrated Over Limited Phone Service 6-10-12.flv[/flv]

WHSV first reported the major service outage to viewers during the weekend local news, noting customers between Brandywine and Sugar Grove had lost landline service. (2 minutes)

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/WHSV Harrisonburg Family in Pendleton County Frustrated Over Phone Service 6-12-12.flv[/flv]

 In this second report, WHSV talks with the Propst family about the human impact extended service outages can have on customers.  (2 minutes)