Do customers still want landlines? Telecom industry doesn't want anyone to hear the answer
[Commentary] The deregulation lobby operates on faith — the faith that government regulation is unnecessary because the magic of competition is all that's needed to keep consumer prices under control. But is it so?
California has been running a sort of laboratory test of this theory since 2006, when the state Public Utilities Commission deregulated telephone landline prices. The PUC's rationale was that competition from wireless, cable phone service, and voice-over Internet protocol (VoIP) carriers such as Vonage had become strong enough to keep landline rates in check.
In November 2015, the PUC decided that after 10 years "the time seems ripe" to check on whether its expectations were fulfilled. The commissioners issued an order requiring landline, wireless and other telecommunications providers to deliver data on the price, availability and quality of all forms of competing offerings, including how they service the state's geographically, ethnically and economically diverse communities. AT&T's flat rate for basic phone service rose from $10.69 in September 2006 to $24 in January 2015, according to PUC figures. California's other big landline provider, Verizon, also jacked up its landline prices, although not quite at AT&T's pace.
Consumer advocates want to know whether the big carriers are goading landline customers into shifting to their wireless or Internet plans by raising prices on the traditional service, letting its quality go to hell, and steering unhappy customers to newer, more lucrative and largely unregulated options.