On Sunday, Pulitzer Prize-winning investigative journalist David Cay Johnston reported that the telephone is going to become “much more costly and intermittently available in the Garden State, thanks to a backroom deal between New Jersey governor Chris Christie’s administration and Verizon.” David Johnson (NJSpotlight) said that the five Board of Public Utlilities commissioners could approve the agreement as early as today “at the agency’s regularly scheduled monthly meeting.”
Regardless of where you live in America, the New Jersey deal illustrates how the old promise of universal access to telephone service is quietly being replaced with new rules that give all the power to telecommunications giants. From Alabama to Texas, from California to Kentucky, the telephone giants have been pouring millions of dollars into new laws and regulations that strip customers of agency and rights.
Under the New Jersey deal, Verizon will only be required to provide basic landline home and business service, and to continue repairing lines, for the next three to possibly five years. After that Verizon can take its sweet time or altogether refuse to make repairs.
In addition, Johnston said that Verizon could also “impose unlimited charges for any one-time service, such as an installation or upgrade.” He noted, “This way it would be able to turn away any customer it deems unprofitable simply by demanding huge fees.”
According to Johnston, telephone rates would also increase a whopping 36 percent by the year 2019. Johnston said, “If rates were allowed to increase at last year’s inflation rate, the total increase by 2019 would be less than one-tenth of that.” He continued by saying that the huge rate hike was “not listed as a purpose of the four-year-old proceeding under which the backroom deal was made.”
Johnson said that “a public inquiry known as a ‘rate case,’ which includes expert testimony and requires economic analysis, would need to be conducted in order to determine whether any price increases are justified” is typical in deals such as this. He added that the deal “violates the basic economic and legal principle of utility regulation”—noting that owners “are entitled to just and reasonable profits and customers to just and reasonable prices.”
Democratic Assemblyman Dan Benson said that economic damage would be widely felt—especially in lowly populated areas—“if the deal goes through.” He said that small towns without a reliable telecommunications infrastructure are “going to be left behind, as they try to attract jobs and businesses.”
You might think Republicans, as the party that claims to support business, would be looking out for this sort of thing. But so far in New Jersey it is Big Business, with all of its campaign money and perks, like the corporate jets that ferry Christie around the country, that has won the hearts of the Republican governor and Republican state legislators.
This deal to diminish and ultimately take away consumer rights while jacking up prices was done largely without public hearings or much notice to the public at all. (There were two short hearings — three years ago.)
The list of people who received copies of the deal, which was signed May 6, does not include any consumer groups or news organizations. Only state officials, Verizon, and CenturyLink, which serves a small part of the state, were sent copies — a solid indicator that the fix is in.
According to Johnston, the “New Jersey state office that looks out for the interests of telephone customers” was not involved in the Verizon deal. He said that Stefanie Brand, the Director of the Division of the Rate Counsel, “filed a petition Friday protesting the deal, which she said is being done in violation of state law.”
Brand said that based on the original case, “the public would have no way of knowing the central changes being proposed.” She told Johnston that the original case made no mention of “costs and rate increases” or the other changes that go far beyond the issues the public had been told about.
Brand said that the phone system will fail unless there is “continual maintenance to switches and other equipment.” She added that utility workers had told her staff that fewer repairs were being made, “effectively guaranteeing that the system will fail.”
“Defending the old system is not an example of Luddite opposition to new technology,” Johnston wrote. He noted that “Internet calls that use coaxial cables, fiber optic lines, and wireless networks are the future.” He added, however, that the phone giants, “which grew rich as regulated monopolies, want freedom to charge any price, refuse any customer, limit any access as they think best serves their bottom line.”
The need to reach first responders in a medical emergency, fire, or crime, gets no regard under such a system. AARP recorded complaints from people whose relatives died because they could not contact medical help after Christie’s administration relaxed rules that regulated telephone companies in New Jersey.
Mayors have complained that local businesses are being hurt and jobs are being lost because of inadequate and worsening Verizon service.
Spencer Kent (NJ.com):
Opponents of the deal believe it could greatly affect rural areas throughout the state like Cumberland and Salem counties by allowing Verizon to neglect certain service quality standards for landline-only telephone customers. They also claim it could allow Verizon to increase rates by 36 percent over a five-year period.
Hopewell Township Councilman Greg Facemyer said, “The backbone of the phone system was built on the statuary obligation … of (maintaining) the landline system.” He added: “So what is the farmer, the person who lives in a rural area, what are Salem and Cumberland counties going to do, how can businesses, students compete today?”
Kent said that the New Jersey Board of Public Utilities (BPU) that is in charge of authorizing the measure had declined to comment, saying it was a “pending matter.”
Kent noted that the Verizon deal “would remove pricing regulations for residential basic telephone service, single-line business telephone service, nonrecurring charges for residential service connection and installation, and residential directory assistance services.”
According to Kent, “Brand’s biggest concern is her claim that the agreement would remove the BPU’s oversight authority of service quality standards.”
She said seniors, low-income residents, and residents located in rural communities are a large portion of landline-only telephone customers.
“What is going to cause them to lose their service is if the company doesn’t maintain their wires,” she said.
Tim Johnson (NJSpotlight) reported on Monday that consumer advocates were urging the state to scrap the proposed deal “that would reclassify Verizon New Jersey’s basic telephone service and instead schedule extensive public comment on the issue.” He said that critics of the deal argue that “the draft stipulation agreed to by the staff of the New Jersey Board of Public Utilities and the telecom company earlier this month would boost costs for seniors, the disabled, and low-income residents.”
According to Tim Johnson, what really irks the Verizon deal critics “is that they only learned about the stipulation less than two weeks ago and had no part in the private negotiations between the BPU staff and Verizon.”
David Cay Johnston said that up to this point “both individual mayors and the New Jersey State League of Municipalities have been ignored.” The League said that “many New Jersey towns have poor landline telephone service, particularly in those towns that lack FiOS services. When it rains, or when the air is humid, these telephone lines do not work. This deteriorating infrastructure is a security, health, and safety hazard.”
Johnston noted that Verizon has already collected “billions of dollars in increased rates for services that millions of New Jersey residents and businesses will never see.” He added that even though “the state legislature had issued requirements that Verizon wire most of the state with fiber optic service, the Christie administration released the company from those obligations.”
Johnston said that the phone giants’ determination “to get rid of any consumer protection rules across the nation is illustrated by two salient facts.”:
AT&T, the dominant California carrier, hired 120 lobbyists, one for each member of the state legislature, to get the law rewritten in its favor and to the detriment of customers.
In much smaller Kentucky, AT&T hired 37 lobbyists and spent years advancing a bill that stripped customers of their rights. It passed in March and was signed by Governor Steve Beshear, a Democrat.
The New Jersey deal and the efforts to keep the public in the dark about it until it’s too late reveal how much government now exists to service corporations at the expense of the citizenry. That will continue unless people demand responsive government.
NJ Landline Users About To Get Screwed In Secret Deal (Crooks and Liars)
More Than Phones Are On The Line ( The National Memo)