States move toward making endangered landlines extinct

WHITEFIELD, Maine -- Peter Froehlich lives at the end of a mile-long dirt road in a part of Maine where pickup trucks share the right of way with wandering dairy cows. The local cable company won't run a line down the road, and his cellphone is useless because he lives in a wireless dead zone.

Now Froehlich, 70, worries a new Maine law eventually will allow the telephone company to unplug him from the plain old telephone service he depends on.

"If they get out of the landline business, I will have no way to connect with anybody else, unless I get in my truck and drive out," he said.

Maine is joining a growing group of states that have passed laws to limit or remove requirements telephone companies provide traditional, price-controlled phone service -- in essence, moving toward a day when plain old landline phone service goes from an endangered species to extinct. Concern is acute in Maine, the most rural state and the one with the oldest average population.

Thirteen states in the past three years have said telephone companies can use alternative technology, such as wireless and broadband internet, to provide basic service. Maine is the first to end basic phone service mandates in communities where there is competition, said Sherry Lichtenberg, principal at the National Regulatory Research Institute.

FairPoint said it still will offer landline service in those areas, but the service quality and price will be left to the free market.

California is considering similar legislation. Ohio, Michigan and Kentucky have passed laws allowing telephone companies to stop offering traditional phone service and are determining how to implement them, Lichtenberg said.

"It will be interesting to see how fast other states follow Maine," she said.

The bill signed last week by Maine Republican Gov. Paul LePage gives the state's largest telephone company, FairPoint Communications, a "level playing field" in the most competitive areas of the state and maintains consumer protection in areas where choices are fewer, said Mike Reed, president of FairPoint in Maine, which has struggled financially since buying Verizon's landline business in northern New England in 2007.

"Maine has recognized the tensions the entire country faces," Reed said.

Consumer groups that fought the bill argued it would allow FairPoint to abandon customers who still use their landline phones because they prefer the call quality and reliability.

The senior advocacy group AARP, which led the opposition, later agreed not to fight the bill after lawmakers added consumer protections that made it harder for the company to abandon service.

Amy Regan Gallant, a lobbyist for AARP, said the group still remains worried about the long-term future of traditional telephone service in Maine, with its implications for older people not using wireless technology.

"We do suspect this is the beginning of the end of landline phones," she said.

The issue resonates in Maine because vast parts of the state have spotty cell coverage and limited access to high-speed broadband service.

But traditional phone companies no longer can afford the high cost of maintaining the legacy phone network in rural areas, and policy makers have yet to figure out a long-term plan for sustaining that network, said Jon Banks, an attorney with USTelecom, a trade group representing broadband service providers.

"It's a rural problem," he said.

He said traditional telephone companies have only an 18 percent share of the voice market, with half of their customers served by wireless networks and the remaining half split between old-style telephone lines and voice-over internet protocol service,

The Maine law phases out state oversight of the old-style service, removing regulations first in seven cities where there is competition among providers and adding more communities until a limit of 22 is reached. The law allows FairPoint to ask regulators for permission to discontinue landline service altogether in those communities if regulators determine the public would benefit.

Elsewhere in the state, the law requires FairPoint to provide basic service to every customer who wants it, but the company is allowed to raise its rates up to 5 percent annually.

The battleground now moves to California. Lawmakers there last week heard testimony on a bill advanced by AT&T that would allowed the company to discontinue legacy phone service in areas where alternative phone services are available.

Consumer groups and the Communication Workers of America, the union that represents workers at AT&T and Verizon, are fighting the bill, saying it would replace regulated landline service with unregulated wireless service. But Lichtenberg said she has seen no evidence to date that ending the mandate has hurt consumers.