Report: Lesniak Legislation Would Bring Higher Phone Bills

STATE – Legislation sponsored by state Sen. Ray Lesniak to deregulate the telephone industry would likely mean higher prices for New Jersey landline telephone customers, according to a report released this week.

The report, produced by Demos and New Jersey Policy Perspective, notes that 17 out of 20 states had phone rate increases between 8 percent per year to 100 percent per year after deregulation. An increase similar to the 50 percent hike in California would cost an extra $100 per year for New Jersey basic phone service customers, the report says.


Current state regulations cap basic phone service at $16.45 per month, or $197 per year.

The bill, S2664, would only allow deregulation in markets where there was competition among telephone service providers. However, since the proposed legislation deems wireless providers competition for Verizon’s landline service, it would apply statewide.

“The reality is that landline phone markets are not really competitive and the alternatives such as wireless and VoIP are too expensive to provide real price competition,” the report concludes. “For this reason, effective regulation of landline local phone services is critical to protect consumer interests and build any form of effective competition in that sector of the telecom market.”

Citing testimony by Stephanie Brand, director of New Jersey’s Division of Rate Counsel, the report warns that consumers could also lose key protections under the deregulation bill, including the rights to have billing errors corrected, receive credit for service outages, and be protected from “slamming” (changing a customer’s phone service without their consent.)

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