AARP strongly opposes two bills in the Legislature that would eliminate important consumer protections by deregulating “bundled” services for telecommunications customers who choose such services.

In recent years, competition and advances in technology have changed the way people communicate and transformed the single-service telephone industry into a multi-service telecommunications industry. Now, in addition to traditional telephone service, consumers are subscribing to bundled services, such as local service combined with long distance, call waiting, call forwarding, caller ID and Internet access plans.

According to J.D. Power and Associates, 40 percent of American consumers bundled services to some degree in 2003, up from 26 percent just the year before. Service bundling is the new reality of the market. However, competition for local telephone service is still in the early stages. In South Carolina, incumbent local carriers still control more than 90 percent of the market.

This legislation threatens South Carolina’s competitive telecommunications market by paving the way for re-monopolization of the industry. Those customers who choose bundled services would face higher rates and the elimination of valuable consumer protections afforded by the South Carolina Public Service Commission.

Among other things, the PSC would lose the ability to regulate local telephone service if a customer bundles that service with other services. The PSC would also be prohibited from acting on consumer complaints filed by those who receive bundled services. Moreover, customer choice would be severely limited because a carrier could refuse to sell DSL service to customers who do not buy local telephone service from that same company.

If this legislation becomes law, the continued development of a competitive local telephone marketplace in South Carolina will be threatened. By deregulating bundled services, this legislation would deregulate the dominant incumbents, including BellSouth, because the number of consumers who are turning to bundled services as a way to control telecom expenses and meet individual needs is growing. As a result, consumers who choose bundled services, such as local and long distance or local and caller ID, will return to being captive ratepayers, face higher prices and lose protections afforded by the S.C. Public Service Commission.

High-quality telecommunications services and networks are critical to the health, personal welfare and the economy of the country. For older Americans in particular, the ability to contact police, fire, medical and other services in times of emergency is absolutely necessary.

AARP has more than 462,000 members in South Carolina, many of whom depend upon the telephone for their personal health and safety. Our membership has a vested interest in ensuring that local telephone companies provide high service quality, reliability and fair choices at just, reasonable and affordable rates. Our members also join the millions of other residential customers who stand to benefit from the lower prices and greater choice afforded them by a competitive marketplace.

While we are seeing competition develop in the local telephone service market, that competition is still in the beginning stages. For that reason, it is crucial that the South Carolina Public Service Commission retain the authority to oversee rates and enforce valuable consumer protections.

Local telephone competition and its benefits, such as lower prices and more choices, are extremely important to residential consumers. The proposed legislation is certainly not in the best interest of the consumers of South Carolina.

Dr. Roshell is the state director for AARP South Carolina.