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State proposal could spike rural phone service costs; Attorney general opposes local phone deregulation

ST. PAUL — A proposal at the state Capitol to change how local phone companies are regulated would lead to higher prices and reduced service in rural areas, Minnesota Attorney General Lori Swanson said Thursday.

Swanson, accompanied by AARP-Minnesota, former Minnesota attorneys general and senior citizens, urged the legislature to drop the proposal. Swanson contends the proposal being pushed by telecommunication companies would “eviscerate” 100 years of state law protecting consumers, including a requirement that phone companies provide access in far-flung rural areas, Minnesota Public Radio News reported.

“We’re very concerned that they’ll just drop people who are too expensive to serve,” Swanson said. “And we’re very concerned that if they don’t drop you, they’ll say, ‘Great, it will be $250 a month.’”

The proposal’s advocates say less regulation would allow them to stay competitive with newer technologies.

The bills also are opposed by former Minnesota Attorney Generals Skip Humphrey and Mike Hatch, who called it a “metro-centric” bill that would hurt the elderly and the poor.

Humphrey, an AARP Executive Council member, said nearly 90 percent of older Minnesotans still rely on a landline for communications, including medical alert and health monitoring systems, home security and during emergencies.

“Deregulation would undermine their ability to have reliable landline service when it’s needed most,” Humphrey said in a news release.

Minnesota Telecom Alliance President Brent Christensen said he views the proposal more as re-regulation than deregulation. The bills would change the threshold under which landline phone companies are required to provide service and remove some price caps.

“That would allow incumbent carriers to be regulated the same as their competitors if they pass a competitive test,” Christensen said. “It’s a really, really small step.”

But Swanson said the threshold under which phone companies could ask for a change in their regulation status was broad enough that it would include more than 90 percent of phone companies in Minnesota. She said it would allow companies to claim that the Internet and cellphones qualify as competition for landlines.

“Landline is a very unique product market, it’s an exclusive product market, it’s one that you can’t fill in the gap with a cellphone or a computer,” Swanson said. “Try emailing 911 if you’re having a heart attack.”

The Minnesota chapter of the AARP also opposes the bill. Sandi Hagglund, from Stearns County, said she used her landline to call 911 while caring for her husband during a long illness, including one time that he had low oxygen levels.

“Because my home is surrounded by trees and hills, the cell reception there is limited, sometimes nonexistent,” Hagglund said. “If I had to drive that 10 minutes to get cellphone reception, my husband would have died.”