(UPDATE 2)Illinois Telecommunication Act Introduced Today -- And Boy is it Bad News for the General Public.

On March 3, 2005, Illinois State Senator James F. Clayborne Jr. introduced a major amendment to Senate Bill 1700 that creates massive public subsidies for incumbent telecom companies that will probably far outweigh the costs of every proposed municipal network in the state combined and, at the same time, guts the last vestiges of public service and protections against price gouging.

The crowning example of just how bad this proposed law will be is exemplified in the outright removal of this "controversial" clause:

From page 2:
17 ...in addition, as to
18 competitive telecommunications rates and services, and the
19 regulation thereof, all rules and regulations made by a
20 telecommunications carrier affecting or pertaining to its
21 charges or service to the public shall be just and reasonable

Our elected officials have decided to strike this language from the law -- which seems to me to be an act in direct opposition to the entire purpose of governmental regulation -- our elected officials are supposed to be protecting us, not making it legal for corporations to be unjust and unreasonable in their rates and services.

This law makes a mockery of reality, claiming, for example:

From page 4:
15 (e-20) there is now significant communications competition
16 in Illinois and a continuing convergence of multiple
17 technologies, including facilities-based telecommunications
18 services, cable telephony services, wireless services,
19 advanced information services, high speed broadband transport
20 services, and Internet Protocol enabled voice, video and data
21 services;

Pretty much everyone I've ever talked with about Broadband Service Provision has lamented the lack of choices available to them. And, just two sub-clauses down from this ridiculous statement, we find subclause "g" which states:

From page 4:
29 (g) protection of the public interest requires changes in
30 the regulation of telecommunications carriers and services
31 consistent with the competitive environment and convergence of
32 technologies

But, here's what's been removed from the law (which used to come right after the previous sentence):

From page 4:
32 ...to ensure, to the maximum feasible extent, the
33 reasonable and timely development of effective competition in
34 all telecommunications service markets.

In fact, even while massive evidence exists, providing empirical documentation that the telecom industry has been merging, thus providing residents with fewer choices, the proposed law is full of expurgations and changes stating that a competitive environment exists. What's incredible to me is that this law came out within a couple days of the previous attempt by telecom giants to limit competition... it seems to me that anyone who supports this law has been drinking too much of the SBC/Comcast Kool-Aid.

Another rule that's been removed from the law are exemptions...

From page 8:
18 (c), ...from active
19 regulatory oversight to the extent [the Telecommunication Commission] finds, after notice,
20 hearing and comment that such exclusion is consistent with the
21 public interest

This means, even if the public interest is served by exempting certain telecommunications services, it would now be illegal to do so. Does anyone else think that it's a good idea for laws to act in the public interest?

And "Broadband Service", as defined by this law, only has to be "200 kilobits per second" that's 4 times the speed of a dial-up modem and less than 15% of the speed of a T-1 line. In South Korea, for example, standard service is 8000 kilobits per second (yes, eight thousand) and costs $9 a month. 200 kbps sucks -- it isn't even considered broadband by most IT experts -- but by legislating this definition, this law will create an artificial reality that'll make it sound like Illinois residents are receiving far faster services than we actually do. This is an example of "improving broadband penetration" by lowering the bar -- kind of like legislating that from here on out, any school grade of "D" or better will now be considered an "A".

And we're just getting started... another clause removed from the law, this one which would have the Commission:

From page 12:
11 order all telecommunications carriers
12 offering or providing local exchange telecommunications
13 service to propose low-cost or budget service tariffs and any
14 other rate design or pricing mechanisms designed to facilitate
15 customer access to such telecommunications service, and shall
16 after notice and hearing, implement any such proposals which it
17 finds likely to achieve such purpose;

So the Illinois legislature wants to eliminate the digital divide by removing low-cost service requirements?

Also removed from the bill -- the requirement for telecommunications companies to provide:

From page 16:
2 to
3 any such customer requesting it, once a year without charge, a
4 report describing which local exchange telecommunications
5 service offering would result in the lowest bill for such
6 customer's local exchange service, based on such customer's
7 calling pattern and usage for the previous 6 months. At least
8 once a year, each such carrier shall provide a notice to each
9 of its local exchange telecommunications service customers
10 describing the availability of this report and the specific
11 procedures by which customers may receive it.

WOW! I didn't know I could request this today -- but the idea of removing this clause certainly makes me wonder who's really behind this bill in the first place.

One of my "favorite" additions to the bill in this series of exclusions:

From page 16:
17 Sec. 13-400. The Commission shall not exercise
18 jurisdiction over:
19 (1) advanced services, as defined in Section 13-203.2;
20 (2) broadband service, as defined in Section 13-203.3;
21 (3) any service not commercially available on the
22 effective date of this amendatory Act of the 94th General
23 Assembly;
24 (4) information services, as defined in Section
25 13-203.4;
26 (5) Internet protocol ("IP") enabled services, as
27 defined in Section 13-203.5; and
28 (6) customer premises equipment, as defined in Section
29 13-203.6.

It kind of makes one wonder what the commission actually does have jurisdiction over...

(UPDATE 1)

Also removed from the law is yet another clause that would allow the Commission to prevent a telecom provider from disconnecting service if doing so was in the public's best interest. Here's the passage that was removed:

From page 20:
15 The Commission may,
16 upon its own motion or upon complaint, investigate the proposed
17 discontinuance or abandonment of a competitive
18 telecommunications service and may, after notice and hearing,
19 prohibit such proposed discontinuance or abandonment if the
20 Commission finds that it would be contrary to the public
21 interest.

The addition to the law that wins the "stupidest added clause" award goes to the following... originally, the law stated:

From page 24:
1 A service shall be
2 classified as competitive only if, and only to the extent that,
3 for some identifiable class or group of customers in an
4 exchange, group of exchanges, or some other clearly defined
5 geographical area, such service, or its functional equivalent,
6 or a substitute service, is reasonably available from more than
7 one provider

However, the authors added this doozy of a clause, which directly precedes the above language:

From page 23:
18 (a-5) All telecommunications services offered or provided
19 by any telecommunications carrier, including, without
20 limitation, all existing or future telecommunications
21 services, facilities, features, or functionalities, shall be
22 classified as competitive as of the effective date of this
23 amendatory Act of the 94th General Assembly without further
24 Commission review, except as provided in this subsection.

Does this mean that all telecom companies are now "competitive"? Does it mean that they're only "competitive" if they meet the requirements of having a single competitor (as in the first clause)? Or are they always "competitive" since this covers them "without limitation"? More importantly, why make things so incredibly confusing? What's this section trying to hide?

Maybe the answer comes in subclause (e), which originally read:

From pages 25-26:
34 (e) In the event any telecommunications service has been
1 classified and filed as competitive by the telecommunications
2 carrier, and has been offered or provided on such basis, and
3 the Commission subsequently determines after investigation
4 that such classification improperly included services which
5 were in fact noncompetitive, the Commission shall have the
6 power to determine and order refunds to customers for any
7 overcharges which may have resulted from the improper
8 classification, or to order such other remedies provided to it
9 under this Act, or to seek an appropriate remedy or relief in a
10 court of competent jurisdiction.

But then had this little addendum tacked on to the end:

From page 26:
10 This subsection (e) does not
11 apply to any telecommunications services that have been
12 classified as competitive pursuant to subsection (a-5).

That's right, taken together, these two clauses might allow companies to rip off the public, and then exempt them from repercussions. Subsection (f) pretty much mirrors the same thing -- telecom companies can rip off the public, and then are exempted from having to pay restitution.

Here's another ugly change. In the original law, proposed increases in how much you pay would be permitted, "upon the filing of the proposed rate, charge, classification, or tariff" (pages 28-29). Under the new rule, increases would become "effective upon the filing of the proposed rate, charge, classification, or tariff" -- as in, immediately. All of a sudden you might find that the amount you pay just increased, and all your service provider needs to do is send you a piece of mail, OR publish the rate increase in a "newspaper of general circulation," "or equivalent means of notice" (and I have no idea what that means).

See, it used to be that:

From page 29:
12 If a hearing is held pursuant to Section 9-250
13 regarding the reasonableness of an increase in the rates or
14 charges of a competitive local exchange service, then the
15 telecommunications carrier providing the service shall have
16 the burden of proof to establish the justness and
17 reasonableness of the proposed rate or charge.

But under the new regime:

From page 29:
6 any proposed increase or decrease in the rates or
7 charges of non-competitive telecommunications services shall
8 be effective 15 days after filing with the Commission. Prior
9 notice of an increase or decrease shall be given to all
10 potentially affected customers by mail, publication in a
11 newspaper of general circulation, or equivalent means of
12 notice.

Meanwhile, I'm still wondering what happened to the idea that our rates should be "just" and "reasonable" (both of which sound like very good ideas, and both ideas which have been removed from this law).

(UPDATE 2)

But Sec. 13-505 has even more exemptions for telecom incumbents -- they don't have to do any cost studies for such things as "any price increase", "any service package", "any new service offering" (see Subsection c).

In fact, this law just goes on and on and on with special exemptions for major telecom companies. Any self-respecting Illinois resident would have to wonder "Who drafted this law anyway?" -- I suspect that it's the very telecom companies the law is supposed to regulate. "Just and resonable" have (literally) been struck from the law. This law removes the clause that the law's purpose is to "provide for fair, just and resonable rates" in favor of the clause "provide for market-based pricing of telecommunications services" (see page 33 lines 24-27). It's almost as if the people drafting this law didn't feel that these two ideals could co-exist.

In fact, the legislators know that this ammendment delivers less -- they cut the original seven positive outcomes for the plan down to a lame trio.

On page 55-56, the State of Illinois used to have increased interconnection requirements for local exchange carriers -- well, you can kiss these all goodbye. They've been removed -- every last one of them -- Sec. 13-801 now pretty much says that the State of Illinois won't raise the bar and foster a competitive environment in any way above what's already mandated by federal law.

I've only just touched the surface (even with all this information) -- there are far more problems with this proposed law than I would expect all but a few diehards to read through. But in a nutshell:

This is a horrendous law -- one that every legislator should be truly ashamed to support.