Advocates warn consumers gain nothing from dereg bill

TRENTON – A couple of hours after Verizon New Jersey spoke highly of a pending Senate bill that would deregulate phone and cable service companies, citizen action groups lambasted the bill, saying it would ultimately raise rates for customers, lower the quality of the service and leave the door open for Verizon to sell off its landline business.

“It gives Verizon everything and consumers nothing,” said Nathan Newman, who served as a consultant to the report, “How To Raise The Phone Bill of The Average New Jersey Family: What S2664 Will Do To NJ Consumers.”

Newman said the bill doesn’t do enough to ensure that Verizon wouldn’t raise rates. He added that New Jersey already has one of the lowest phone service rates in the country.

Richard Brodsky, a former New York assemblyman who worked on the report, called the bill, “a license to raise rates for average families across New Jersey.”

The group said that unlike other states where deregulation of telecommunications companies passed – California, Indiana, and Ohio – the pending deregulation bill in New Jersey is very open-ended and doesn’t place any conditions on Verizon if it decides to one day sell its landline assets.

“Verizon’s New Jersey landline assets will become a cash cow used by any company acquiring  those assets to fund investments required by regulators in other states,” the report predicts. “Higher phone rates could end up funding economic development required by those other states.”

“The law demands no commitments to investment in the state from companies benefitting from deregulation of rates in exchange for its assets,” the report goes on to state.

In Indiana, where a deregulation bill passed in 2006, the state required Verizon and other phone companies to provide broadband service to at least 50 percent of the homes located in areas where it intended to raise telephone bills.

“New Jersey’s S2664 does nothing to promote similar expansion of broadband services or any other gains for its rural counties,” the report stated.

In his own afternoon press conference Wednesday, Gov. Chris Christie said he didn’t have an opinion on the pending deregulation bill, not having looked at it closely. However, he said his “philosophical disposition” is to lower regulations, adding that there needs to be “an appropriate balance” between deregulation and the rates a consumer would pay.

Advocates at the consumer coalition press conference recommended that language be inserted in the bill that Verizon agrees not to sell off any of its assets.

Verizon New Jersey President Dennis Bone said Wednesday the company has heavily invested in New Jersey, adding that the deregulation bill would increase capital investment in the state.

The consumer advocates said, though, that history shows when Verizon expanded its FIOS service in various states, those states sold their landline assets to private companies.  

The study stated that 17 of the 20 states that had adopted telecommunication deregulation laws saw increased phone bills. California, for example, saw a 50 percent rate hike in just two years. The current basic phone plan in New Jersey can’t exceed the Board of Public Utilities’ monthly bill limit of $16.45.

he report also said it could leave customers in the lurch by stripping the Board of Public Utilities of its regulatory authority.  That could result in inadequate service and billing errors, according to the report.

one has said S2664 will provide Verizon with incentive to invest more in the state and provide more options to residents, adding that onerous regulations have stifled competition.

Advocates warn consumers gain nothing from dereg bill