LANSING – Consumer advocacy, senior citizen and small business groups gathered Tuesday to criticize the makeup of the telecommunications bills now under legislative consideration. The groups charged that the legislation would reverse marketplace progress made since the 2000 Telecommunications Act and set the stage for a land-line monopoly for the two phone company giants.

The Small Business Association of Michigan, Michigan Consumer Federation and AARP were among the groups asking that legislators consider renewing the current Telecommunications law, rather than make drastic changes in services and removing what they called consumer safeguards.

Since SBC and Verizon already have a hold on the marketplace, small business owners fear what they call a phone monopoly will increase overhead costs.

SBAM Vice President Barry Cargill said the new telecommunication act needs to add service wholesale provisions to keep network access prices lower for phone company competitors, otherwise an overall lack of competition will increase overhead cost for small businesses. That increase could drive businesses out of Michigan.

“When you have fewer choices prices go up,” he said “Our concern is if competitors are not able to enter or stay in the market, we will have less service and higher prices.”

He said the wholesale protection used to exist at federal level to ensure competition can enter the market place and competitors profit from selling services.

John Kreger, spokesman for SBC said there are plenty of services, beyond landlines, that offer competitive services from different providers. “We can’t sell services below cost,” he said. “And the price of services should be based on the consumer. They drive the market.”

Cargill said businesses need landlines because cell phones are temperamental and often businesses need a single contact number.

In an interview, House Energy and Technology Chair Mike Nofs (R- Battle Creek) said, “the medium-sized companies and the big phone companies will be pretty well happy with the bill. The smaller ones, they were hoping we’d be able to protect them and we’re not going to be able to.”

Last week the Senate Technology and Energy Committee sent SB 754 to the Senate floor, while the House Energy and Technogy Committee said it would begin hearings into its version of the bill, HB 5237.

Consumers would also be affected by changes in call package regulations. Currently the law specifies price regulations for phone packages that allow 400 or more calls a month. The bill in House decreases that number tentative to 100 calls, and the Senate allows 200 free calls a month.

“What makes anyone think we would be happy about proposals that cut us off after 100 or 200 calls a month,” said Michigan AARP President George Rowan. “Under current law rate increases can not happen more than once a year, under these laws any added services would mean a rate increase at the whim of the providers.”

Kreger said that consumers should dictate the price and services of the phone company. “[Increased call packages] expands regulation, which is moving in the wrong direction,” Mr. Kreger said, adding that the 50-call plan, which only includes out-going calls, is adequate because most SBC customers with the plan don’t reach the 50-call mark. “If [the law] moves it anywhere beyond 50 it’ll be a rate increase for everyone.”

Communication competitors like Kevin Schoen of ACD.net say the bills will be the demise of competitive communications in Michigan. “I’ll just pick up and move to Phoenix,” he said.

But in a statement, Scott Stevenson of the Telecommunications Association of Michigan said the companies complaining about the bills are choosing to focus their competitive attention on richer communities instead of throughout the state.

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