High-need high speed

St. Louis Post-Dispatch editorial

When the phone rings for the mayor at Portage Repair Service on Washington Street in downtown Portage des Sioux, owner Mark Warner steps from under the service rack and puts on his mayor's hat.

Lately, the mechanic-mayor of the small northern St. Charles County community (pop. 520, Mr. Warner guesses) has been getting a lot of calls about high-speed Internet service. "We're more or less a bedroom community," Mr. Warner said the other day. "Lots of people work from home these days, and they need high-speed Internet to do their jobs. I have to tell them it's not available here."

So when state Sen. Chuck Gross, R-St. Charles, contacted Mr. Warner about a bill he was sponsoring that might help bring broadband Internet service to small-town Missouri, Mr. Warner was all ears. He agreed to join other small-town mayors and business people in writing to the Senate Commerce and Environment Committee in support of the legislation. Because it was lawyers for SBC Missouri who actually wrote the bill, the nice people at SBC offered to write the letter, too.

"We're not experts in telecommunications," Mr. Warner's letter read in part, "but we're well-schooled in what's best for Missouri. And we've seen and heard enough of House Bill 1303 and Senate Bill 1069 to know it will help boost the incentive for companies -- like SBC, Sprint, CenturyTel and others -- to invest in new technology in our towns." The specific technology that Mr. Warner and other rural mayors covet is called a "DSLAM," or "digital subscriber line access multiplexer." A DSLAM is the machine that turns regular phone lines into digital subscriber lines -- DSLs -- which transmit data 50 times faster than standard dial-up service.

SLAMs come in many sizes. A small one might have 36 to 72 ports, capable of serving up to 72 customers. An expert at one equipment manufacturer said wiring a small town for DSL would cost between $15,000 and $25,000, but that by the time all the other interface equipment for a full rollout is bought, that price will probably double. It isn't cheap, but it's the kind of stuff that generates revenue.

Small towns haven't had enough customer demand to convince phone companies to extend DSL service to them. But as high-speed Internet access has become a basic business tool, mayors like Mr. Warner see it as vital to their economic futures.

SBC Missouri and its allies are holding out the possibility of DSL service to attract support from outstate legislators for nine bills before the Legislature this year. In one way or another, the bills all loosen restrictions on big telephone company pricing.

Mr. Gross's bill, SB 1069, and its House twin, HB 1303, would allow big companies in competitive markets who install DSLAMs to raise their prices without review by the Public Service Commission. "Competition" is defined as the presence of two other sources of telecommunication services.

A town with a small competing phone company and a cell phone provider -- which is almost all of them -- would be classified as a competitive market.

The seven other bills in the package would either loosen price restrictions or enable SBC to charge competitors more for using their network.

Michael Dandino, the telecommunications expert in the Missouri Public Counsel's office, says the bills are "anti-competitive and anti-consumer." SBC and its allies, he said, "are rewriting the rules to their benefit.

"They want to make it easier to raise prices without PSC oversight. Make no mistake. If these bills pass, prices will go up." But Cynthia Brinkley, president of SBC Missouri, said that without the "incentive" of price relief, her company and others can't afford to invest in DSL service in less populated areas. Wireless carriers are cutting into SBC's business, she said, and Internet-based phone service also looms as a competitive threat.

"We've been hearing from folks all over the state," she said. "This bill represents the best chance of it (DSL service) happening in these rural areas. It's a very important piece of legislation to the industry." There's no doubt that small towns in Missouri and the rest of the Midwest are hurting. Manufacturers have fled for bigger cities or overseas.

Technology has made farming more expensive and reduced the number of farm workers. Retailers have been bulldozed by Wal-Mart. High-speed access to the information highway has become as critical as access to good asphalt highways.

But affordable phone service is vital, too, and that's why it's a regulated utility. It needs to stay that way. In their current form, the telecom bills before the Legislature take away too much of the regulatory authority of the PSC.

Compromise is not only possible, but critical. The Legislature must find a way to make it possible for SBC and its allies to recover the cost of a statewide rollout of DSLs, perhaps by letting towns become partners with the phone company in paying for equipment costs. The PSC should retain authority over price structure, but under flexible rules that allow faster rate relief to firms that make critical investments in Missouri's future.