Report: Lesniak Legislation Would Bring Higher Phone Bills

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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.

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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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2 comments for “Report: Lesniak Legislation Would Bring Higher Phone Bills

  1. bluebird21
    March 16, 2011 at 4:33 am

    I read about this report you’re referring to yesterday. Did you see who its author is? A little disenchanting to find it was written by Richard Brodsky, the NY politician who has been in bed with the Communications Workers of America for years. Easy to see why a CWA pawn would want to author a report like this. As for the rest of us, I’m pretty confident some deregulation of the cable industry would be good for the state. Some competition could only help at this point

  2. swayzeg
    March 15, 2011 at 10:21 pm

    demos and nj policy perspective are both left-leaning interest groups with close ties to unions. Not that that’s a bad thing, but, they will obviously be unable to objectively “report” on matters such as these due to these ideological biases. i wish that reports, such as these, would be more objective.

    the goal of this bill is to increase competition between companies. it will lower prices and produce jobs – two things new jersey citizens need. it has bipartisan support, a rarity in nj politics. and will do some good for the people of our state.

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