Harris says AT&T Looking to Profit Millions at Expense of Rural Telephone Cooperatives

March 4, 2011
Dwayne Page
John Harris, III

Local telecommunications providers including DTC Communications are protesting a proposal that would cut intrastate access fees collected from long-distance carriers that connect to their networks, a move they say could increase costs for rural customers.

Known as the "Uniform Access, Competition, and Consumer Fairness Act of 2011," the legislation is backed by a broad group of telecommunications providers including AT&T, which called the bill a "compromise" that would "modernize telecommunications policy and keep Tennessee moving forward."

Nashville attorney John Harris, III, who represents an association on behalf of seven rural Tennessee telephone cooperatives, including DTC, told WJLE Wednesday that if the proposed legislation is adopted by the Tennessee General Assembly, it could result in higher rates and or cuts in services offered by local telephone companies. "Their (phone cooperatives) concern is that this legislation that primarily AT&T is behind, because they are doing this in a number of other states, is going to be very bad for local government and for local communities that they serve for several reasons."

"The AT&T legislation really deals with a very narrow issue that has to do with how much AT&T, as a long distance carrier, has to pay a local phone cooperative, like DTC to connect an incoming long distance call to a DTC customer," said Harris. "For example, if a call originates out of Memphis, comes to Smithville and gets sent up some hollow somewhere to a rural customer, DTC wants to be paid a portion of the long distance charge because it owns the lines and has to pay for the electricity, the property taxes and it has to pay its employees to go out there and maintain the lines when a storm comes through. It has costs associated with its share of delivering that phone call. Presently, the rural phone cooperatives are charging anywhere from about four cents a minute to about ten cents a minute to connect that call statewide, depending upon the phone company. AT&T is charging its customers, in Memphis for example, as much as forty cents a minute to business customers to place those calls. AT&T is making plenty of profit on the calls," said Harris.

"What AT&T wants to do is to force the local phone cooperatives to accept approximately two cents a minute to place those calls across its network. AT&T's legislation would allow AT&T to benefit to the tune of about $16 million dollars a year in keeping those profits, those cost reductions, because the law that is proposed doesn't require AT&T to pass those cost savings on to its customers," according to Harris.

"From the perspective of the phone cooperatives, their response is that its actually costing them (cooperatives) anywhere from about five cents a minute to as much as nine cents a minute to provide that service and if the legislature is going to force them(cooperatives) to provide a service that costs nine cents a minute to provide and force them to only accept two cents a minute in compensation for that service then they (cooperatives) have to do something on their end to absorb that theft of services," said Harris. " Potentially, what they will have to do is either cut services, raise rates, or reduce the number of employees. It could mean as much as an eight dollar a month increase in cooperative customer basic monthly phone service rates to make up that loss which is really going into the pockets of AT&T," according to Harris.

"All the rural cooperatives are saying concerning this legislation is that we don't mind connecting and delivering the long distance calls. All we're (cooperatives) asking is that if it cost us, based on our calculations seven to nine cents a minute to do that (connect the calls) by the time you add in maintenance, employee salaries, and all the overhead, just pay us a reasonable amount of money to provide the service. AT&T doesn't want to do that," said Harris.

Harris added that the AT&T bill is getting a great deal of support from Republicans in the State House and Senate, except for a few including State Senator Mae Beavers and State Representative Terri Lynn Weaver who are standing with the rural telephone cooperatives in opposition to the legislation. "A real troubling thing about this is there is a perception, and I think it's a valid one, that a lot of the rural communities in Tennessee are part of the reason why the Republicans have now taken control of state government. We saw a shift in 2008 and 2010 in how rural communities are voting and that has given the Republicans the majority in the state house, state senate, and the Governor's office. But it's primarily the Republicans who are carrying AT&T's water at this point and turning on rural Tennessee with no apparent reason or concern for what it's going to do to rural Tennessee," said Harris. "We do have State Senator Mae Beavers and State Representative Terri Lynn Weaver and a lot of good Republicans and Democrats who are trying to look out for rural Tennessee. The problem is the Republican leadership like Mark Norris, who is out of Collierville near Memphis, doesn't have any rural coops in his area so he is not really concerned about rural Tennessee and he is the Senate sponsor of this bill," said Harris.

"AT&T is using it's power, it's size, and influence politically to take advantage of rural Tennessee communities and its critical that people in these rural communities contact their telephone coops and phone companies and ask what can we do to help fight this? Who do we need to call? Who do we need to email? How do we get the attention of Governor Bill Haslam and the State Senate and State House of Representatives to make sure that AT&T doesn't succeed in stealing phone services from rural cooperatives," Harris concluded.

In a prepared statement, DTC Officials have said " If AT&T and the telecom giants are successful, we estimate lost revenue to DTC will be $700,000 per year".

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