AUSTIN—State Representative Harold Dutton, AARP of Texas, along with Consumers Union and TexPIRG oppose the passage of HB 13 by Representative Phil King and SB 5 by Senator Troy Fraser. Giant phone companies have spent millions of dollars lobbying for favorable video franchising and the ability to increase phone rates. Representative Dutton stated that, "this is the fourth time in 2005 SBC has gotten this bill presented in the legislature. Each time I have attempted to highlight the potentially harmful effects on Texas consumers. HB 13 is just as bad as its predecessors. Once again, SBC puts its hand deeper into Texans' pockets, all in the name of competition in the telephone and cable industry. This is the largest give away to any one company in Texas' history. HB-13 is really SBC-13."
Gus Cardenas, State President of AARP Texas, said, "affordable basic phone service is essential for all Texans, particularly for older people. AARP does not believe that competition is developed enough to protect basic phone customers from higher rates and lessened service quality. We have concerns because of the history of what happens to rates once SBC and Verizon are given the power to raise rates. Since the legislature allowed SBC and Verizon to set the price for caller ID, voicemail, and other add-on services in the late 1990's consumers have been hit with price increases of up to 400%."
Tim Morstad of Consumers Union adds, "competitive pressures are virtually non-existent for basic phone service. The basic phone service market is shrinking in Texas as it is nationwide. SBC itself is trying to buy up one of its competitors AT&T, while Verizon attempts to take over MCI. Smaller competitor companies are abandoning residential phone customers or dropping out of the market all together as a result of a recent FCC order. Cell phones and digital phones cost more than basic phone service and shouldn't be over-hyped as offering a competitive alternative for basic phone customers."
Kenneth Hwang with TexPIRG says, "not only will this legislation hurt our poorer communities, since mega-corporations will ignore their needs, but we will all suffer as cities lose the ability to help shape the broadband telecommunications revolution that has the potential to make our media system more democratic, more diverse, and more participatory. Clearly something does need to be done to rein in the worst practices and rising rates of the cable industry, but neither SBC nor this legislation are the answer. SBC already has the right and the incentive to enter this market, and its already been moving fast to do just that. We don't need to give away the farm by taking money and services away from local communities."
