Frederica Freyberg:
We leave Milwaukee now and head to the state Capitol, where a new bill would change how phone companies do business. Phone companies are known as telecommunication utilities and like water and electricity are regulated by the state. Specifically, the Public Service Commission. Proponents of the bill say regulations based on the days of hard-wired phones keep companies from competing in the wireless age. If the bill passes, phone companies will no longer have to report profits and expenses to the public service commission. Opponents say it ignores the needs of the state's three million hard-wired phone users. Sen. Jeff Plale is author of the bill. He joins us by phone. Barry Orton is a UW-Madison telecommunications professor who has some concerns about the bill. Thanks to both of you.

Frederica Freyberg:
Sen. Plale, are you on a cell or landline?

Jeff Plale:
I am on a hard copper wire out of my kitchen.

Frederica Freyberg:
Good. That's better for us. I read the analysis of this bill and I have to tell you I went virtually cross-eyed trying to get all of the acronyms. Break it down for us. Basically it deregulates traditional phone companies.

Jeff Plale:
Really what it does is it upgrades the statutes to reflect the current telecommunications market. As you mentioned in your lead-in, the telecommunications industry is regulated much like water and electricity. Well, you know, there's a big difference. Most folks in the state of Wisconsin have no option where they get their water, nor do they have any option where they get their electricity, but they have a whole lot of options regarding where they get their telecommunications service. And, you know, here it is 2010, and we still have regulatory models that date back to 1930. So I think really what we're trying to do here and what this bill does is it gets the — it gets telecommunications brought up to — brought up to the current marketplace.

Frederica Freyberg:
And, Barry Orton, what's wrong with kind of leveling the playing field between these traditional phone companies and the new wireless technologies?

Barry Orton:
Well, this bill doesn't level the playing field. It fires the referees. It basically says you can do whatever you want on the playing field. There's nobody in charge of enforcing the rules. Those people aren't necessary. And I totally disagree with that. And I totally disagree that this would upgrade regulations. It would degrade regulations.

Jeff Plale:
Now, Barry, you know as well as I do that this bill puts all the consumer protection at the Department of Ag and Consumer Protection, and really the PSC in reality hasn't regulated telecommunications for quite some time. Somebody asked me the question recently, well, what about that scenario that we had, oh, 10, 12 years ago when all the power, when all the land lines went down during a storm? At the time it was SBC, Ameritech, that was having trouble with then. Back then you had nowhere else to go. Now the consumer is in control. They can turn to Verizon, to just about anywhere and get a telephone service.

Barry Orton:
That would be good if it was true, senator. The problem in this state is there are a lot of people in rural areas that don't have those competitive alternatives and there are a lot of older people who are going to stay with their land lines and not go to wireless no matter what. Those are the people, the people in the telecommunications area, who are the poorest in terms of the resources they have to go to for competition and those are the people whose protections this bill would eliminate, and those are the people I'm really worried about.

Frederica Freyberg:
What kinds of protections, Barry Orton, are you talking about? What would it mean to someone with a land line?

Barry Orton:
I'm talking about basic technical provisions in terms of how good the phone service has to be. Sen. Plale is on a land line now for a reason. He didn't want to risk having the signal while we're taping break up while he's on his cell phone. The reason for those land lines is they are life lines to many, many people. And many people don't have those alternatives. And this throws out the rules that protects those people and that's the real concern here.

Frederica Freyberg:
What about that, Sen. Plale?

Jeff Plale:
And I'm also on a land line because it just happened to be convenient. But for most people, land lines aren't convenient anymore because they don't work out of a central location. They work out of various spots, out of their car, out of their office. And they bring along a hand-held service. And, again, if I didn't have this dinosaur called a land line, I could pick up probably three different phones and call in.

Barry Orton:
But the technical people here would be very worried about the quality of that signal over the time that we're making this tape. You have to admit that's true.

Frederica Freyberg:
Let me ask you, Sen. Plale, what is it that the traditional telephone companies are seeking in this bill that they currently don't have that currently are regulated by the PSC? What is it that they would get from your bill?  

Jeff Plale:
I think what they're seeking is some regulatory parity. I think what they're seeking is, pardon me, to have everybody — every phone company treated the same, to allow them to compete in a truly free market.

Barry Orton:
With no rules?

Jeff Plale:
And I think at the end of the day what we have is a consumer win because — because you don't have to in a certain area just take one certain phone company. And I know that there are certain corners of this state where the marketplace is still limited. What we're trying to do is open that marketplace and allow them to have more options.

Barry Orton:
But this state has so many rural areas where that — even opening it doesn't make any difference because it's not economically feasible for all these big companies to come into the area near Minocqua, for example. There are so many areas in this state. And even islands within the Milwaukee metro area where there isn't that competition and there aren't those alternatives, and there's some people who will never go to the alternatives. And this would remove their protections.

Frederica Freyberg:
And so if there fails to be that kind of competitive nature in some markets, what does that mean for the price the consumers might pay?

Barry Orton:
Well, it means several things. The price can go up. Part of the regulations that Sen. Plale wants to eliminate here concern those prices. And the technical quality can go down. 

Jeff Plale:
In a noncompetitive marketplace, if you have no choices, there is going to be no price fluctuation because if you're the only game in town as XYZ phone company, where's the incentive to compete? The more competition you open it up to, the better the pricing structure is.

Barry Orton:
But aren't the places that are competitive already competitive and the places that aren't competitive, particularly in rural parts of Wisconsin, not going to ever be competitive. And eliminating more regulations doesn't make them competitive, doesn't change the economics of those areas. What it does, it makes the phone companies richer and it takes away protections for consumers. And I disagree with you about Department of Agriculture, Trade and Consumer Protection. They deal with the business side of things, but they have no expertise in the technical side of things, how good the signal has to be, how often the signal has to be replaced and equipment has to be replaced. That's where the Public Service Commission is necessary. The federal law actually lets the Public Service Commissions of the state once it gets to the point of cell phone plurality, as we have now in this state, allows the Public Service Commission to regulate cell phones. I'd argue that instead of eliminating these regulations, we should regulate cell phones the way we do land lines.

Frederica Freyberg:
Wait. So more regulation, not less, senator.

Jeff Plale:
Oh, absolutely. The situation that Barry just referenced regarding call quality and call clarity, good friend of mine lives in Bayview. He had provider X, was having a lot of difficulty getting a signal in one part of his house, and very easily went to a provider Y. Didn't have to go through the Public Service Commission. Didn't have to go through any complaint process.

Barry Orton:
Put him in Bayfield, though.

Jeff Plale:
He changed his provider, and he's got a better service.

Frederica Freyberg:
Very quickly, I just want to get one thing in. We only have about a half-minute left. This bill does repeal price regulation by the PSC of telephone utilities.

Jeff Plale:
It repeals something that hasn't been done in a long time. I mean, right now price structure is set at a competitive marketplace. And, as I said when we came into the interview, I think this bill just reflects reality.

Barry Orton:
This bill was written by AT&T.

Jeff Plale:
That's not true.

Barry Orton:
I've got the notes. I saw who was at the meetings.

Jeff Plale:
Barry, that's not true. This bill was not written by AT&T.

Frederica Freyberg:
We need to leave it there. This will be ongoing. It has a ways to go. Sen. Plale, thank you for joining us.

Jeff Plale:
Always a pleasure.

Frederica Freyberg:
And Barry Orton, thank you.