Consumer groups oppose telecom deregulation

Eight public-interest and consumer groups have asked the U.S. Federal Communications Commission to reject requests by two large telecommunication providers to close off their copper voice and data networks to competitors in 10 U.S. cities.

The groups, including the Consumer Federation of America, Public Knowledge, and the New America Foundation, sent a letter to the FCC Tuesday, saying attempts by Verizon and Qwest to end wholesale price controls on their copper networks would result in "significant rate increases." The two companies are among several telecom carriers that have filed so-called forbearance petitions with the FCC over the past two years.

But there's not enough competition to justify the deregulation, the public-interest and consumer groups argued in their letter. Qwest and Verizon now have few broadband or voice competitors, they argued.

The letter refers to a study, paid for by competitors of the two telecom giants, saying the average cost of household phone service in the six cities covered by the Verizon request would rise by $114 a year.

"Granting these forbearance petitions is likely to eliminate competitive voice and broadband services to the mass market of residential and small business customers," the groups said in the letter. "We urge you to reject these petitions and adhere to the current ... policy that has been shown to promote lower prices and greater investment in broadband services."

Verizon's forbearance request would allow it to stop offering wholesale prices for its copper networks in Boston; New York City; Philadelphia; Pittsburgh; Providence; Rhode Island; and Virginia Beach, Va. The cities covered by the Qwest forbearance request are Denver, Phoenix, Seattle and Minneapolis, Minn.

Verizon disputed the information in the letter. The prices Verizon charges for access to its copper networks are falling, said David Fish, a Verizon spokesman.

"It appears these organizations have been misled by the distortions of a few [telecom competitors]," Fish said. "Those six markets are extremely competitive, and prices have gone down, not up. Let's just say this letter is significantly fact-challenged."

In a Nov. 7 filing with the FCC, Verizon said it has "extensive" competition from cable companies providing voice and data services, and from wireless voice carriers.

But the letter from the consumer and public-interest groups said the two forbearance petitions could affect 17.6 million households in the United States. "Together, these petitions could eliminate competition and raise rates for broadband services for about 40 percent of all the homes in America," the letter said.

Qwest did not immediately respond to an e-mail request for comment.