A states' rights battle has erupted over new federal rules that free telephone companies from the obligation of providing basic telephone equipment to their customers.
State regulators, represented by the National Association of Regulatory Utility Commissioners, are arguing that the rules, if left unchanged, could undermine basic telephone service in rural and economically depressed areas. As a result, the NARUC is asking the Federal Communications Commission to grant state regulatory bodies authority to force any telephone company to provide basic equipment and wiring to customers requesting such service.
Under federal regulations that took effect Jan. 1, telephone operating companies may abandon their traditional practice of installing phones in customers' homes and businesses and charging a monthly rental, or tariff, for their use. Companies such as Chesapeake & Potomac Telephone Co. and Southern Bell Telephone & Telegraph Co. have frozen their existing inventories in preparation for getting out of the equipment-leasing and maintenance business.
That means customers in many cases will have to buy their own phones and install their own wiring. The idea is to open competition to other telephone-equipment businesses, which once were shut out of the market by American Telephone & Telegraph Co. AT&T is under federal orders to divest itself of its 22 operating companies by Jan. 1, 1984.
The NARUC says in its petition to the FCC that the government's new rules for competition "could have an unintended adverse effect" upon a large number of telephone subscribers.
"Rural, sparsely populated, or depressed areas of the country will not attract telephone equipment competitors. . . . Thus, telephone subscribers in those areas--far from benefitting from increased competition--would suffer from the absence of any source of basic equipment and necessary services," the petition says.
The association said state commissions should have the power to impose "provider-of-last-resort requirements," under which telephone companies would be forced to keep equipment stocks for sale to customers on a request basis. The "provider of last resort" also would have to install and maintain wiring on a flat fee-for-service or contract basis. Also, at the customer's option, companies may be required to make home visits to repair telephones.
The telephone companies don't like the NARUC proposal.
"We just don't believe we have to be a supplier of the last resort," Southern Bell spokesman Larry Shealy said last week. He said the plan could stick operating companies "with the high cost" of maintaining retail branches in unprofitable locations. That cost could force operating companies out of business, further aggravating telephone service, he said.
Southern Bell and 15 other telephone companies have filed a complaint with the FCC alleging that "provider-of-last-resort" proposals undermine the new federal rules