5 things to know about Illinois’ telecom rewrite

Brian Feldt

Lawmakers writing the state's telecommunications law in 1985 weren't thinking of cell phones or the latest smart phone. And when they rewrote it in 2001, widespread high-speed Internet was still down the road.

But with those high-tech advancements and a more wireless world, there's a strong push to update the law this year to speed the technology of today - and tomorrow.

Here are five things you need to know about the state's telecommunications law rewrite pending at the Capitol and how it could affect you:

1. The proposed rewrite

The law was written with landlines in mind and in 2001, AT&T controlled most of the market. Lawmakers responded by regulating prices to control consumer costs.

Now, the landscape of the telephone market is a much different game.

Companies such as AT&T still provide landlines but also have their hands in wireless phones and broadband Internet. These companies say the law treats them unfairly because they face stiff service quality regulations and fines for not meeting those on landlines.

The current law, they argue, diverts money away from more cutting-edge purposes, such as broadband technology - and the state is falling further behind in innovation as a result.

"I can't underestimate the importance of infrastructure of the 21st century," said Paul LaSchiazza, president of AT&T Illinois. "Broadband services and access to broadband, and advanced telecom infrastructure ... these are economic engines and tools that will drive Illinois forward."

But there's a key point: These changes don't affect broadband directly.

Instead, the proposed law - House Bill 6425 - would lift many of the regulations on landline phone companies such as AT&T. That would allow those companies to more strategically invest in broadband services, which they say could create thousands of jobs.

2. The consumer angle

Unless you are using a landline telephone, your service or pricing is likely not going to change.

Right now, the state does not regulate broadband or wireless phones and reemphasizes the point in Democratic Rep. Kevin McCarthy's bill.

But for those that still use landline phones, which represents 40 percent of AT&T's business, the answer is still up in the air. The main issue comes down to finding a balance between re-writing a law that would create jobs while still protecting consumers that have landlines.

Those in favor of the rewrite say a series of safeguards contained within the bill will keep prices down and service up. But those against the change say those same protections aren't enough.

Susan Satter, a senior assistant in the Attorney General's Office, said landline prices have been steadily rising for years but under state regulation. The new bill would lift caps for landline costs to consumers. And safeguards that protect against soaring costs, Satter said, are vague at best.

"We are concerned about the economic climate, but we are also concerned about the effect that price increases have for the lowest level of service and what that will do," she said. 

3. The protections

The proposed changes include a series of consumer protections to keep companies in check with less regulation in place.

Under price protections, consumers would be offered three low-cost basic service phone plans designed by the Citizens Utility Board and approved by the Illinois Commerce Commission. Those plans would range from the most basic plan to a plan with features like call waiting and caller ID.

Newly competitive areas would still be capped, with no price increases for three years. In the fourth year, prices could rise but must be approved first by CUB and the ICC.

Under the service protections, consumers would earn automatic service credits if service quality is not preserved.

Meanwhile, the ICC would retain authority over existing protections such as emergency 911 phone calls, protections for the blind and hearing impaired and the Life Line program for low-income customers.

The ICC has taken a neutral position on the bill for these reasons.

Jim Zolnierek, telecommunications director for the ICC, said a few modifications should be made that would essentially give the ICC more authority over regulating the industry.

4. The jobs and investment

Lifting regulations on companies such as AT&T, they argue, would theoretically allow them to put that money into innovation in broadband technology, creating thousands of jobs.

"In this economy, public policy that does not require private sector investments hurts our ability to compete for and create jobs," McCarthy said. "And declining revenue limits the states ability to address the economic shortcoming through tax cuts or spending increases. (Enabling) private business is the most feasible (solution)."

According to a study by the Communications Workers of America, more than 97,000 jobs would be created for every billion dollars invested in broadband.

And by increasing broadband adoption by 7 percent, LaSchiazza said, Illinois would create or retain 100,000 jobs.

But some remain skeptical AT&T will turn around and invest the money in Illinois, especially given the economy.

Satter said the bill would prevent the ICC from taking action to force companies to fill gaps where broadband access is not available in rural areas.

"Will this bill otherwise incent companies to fill the gap? I can't find it," she said. "I can't find the provision in this bill that says 'this is a good idea, invest here.' The general notion that if the state withdraws completely ... that somehow this investment will happen. It's not going to."

Satter said she would like to specifically see where AT&T would invest before jumping on board.

Doug Dockery, president of the Illinois Telecommunications Association, said the bill is far from perfect but is far better than what the state has now.

"It recognizes a competitive marketplace, creates jobs and spurs innovation, and ensures customers have access to new technologies," he said. "The old form of regulation was an impediment to growth and threatened with the loss of good paying jobs."

5. The future

Right now, the bill is being held in a House committee. But most legislators and interested groups remain optimistic a deal can be struck that would satisfy all parties.

Any re-write would likely contain a sunset provision, meaning the issue will be revisited at some point again in the future.

If they re-write the law, the question will come down to whether or not companies such as AT&T hold true to their word and invest that saved money back into innovation in future technology.

If AT&T does, thousands of jobs could be created while landline users hold their breath. If it doesn't, no jobs will be created and service quality for landlines could plummet.

LaSchiazza said there is no reason for consumers to worry.

"To those who might say this is a risky proposition and we really need to be careful and contemplate what we are doing here, the risk has already been taken out of the question," he said. "The time is now to stop losing jobs to neighboring states and recognize the competitive nature of the market."

Brian Feldt can be reached at 217-782-6292 or