Ohio’s General Assembly (GA) seems to be tripping over itself to accommodate the poor phone companies forced to provider landline services. Any messages from the users of such services seems to not be getting through to the GA. So Senate Bill 271 (SB 271) seems likely to pass fairly soon over the strong protests of the Ohio Consumers Counsel and others. It does make one wonder why more pressing matters to benefit much of Ohio's population don't get the same high priority.
In recent years, this is just one of many such issues relating to Public_choice_theory that seem to be smacking us from all over! And from all levels of government! They will be addressed in one or more future columns.
The position of the landline phone service companies certainly seems reasonable. Business is down because of competition from cell phones. Phone users have overwhelmingly voted, with their wallets, in favor of cell phones. Regulators have voted to prohibit providers of landline service from competing for a share of cell phone business and vice-versa. So why should providers of landline services be required to continue selling something that isn’t profitable especially when they are prohibited from competing in the profitable market? (Score another one for government regulators being blind to easily foreseeable outcomes.)
On the other side, many rural areas of Ohio have no cell phone service. Further, not all cell phones have tracking devices activated so a 911 call could not be traced to its location. And even if that device is on, technical issues still sometimes make exact location a crap shoot. This can be a security nightmare for the unfortunate parties needing emergency help. Imagine the hue and cry from the news media when there’s some tragedy that could have been lessened if only the first responders knew the exact location.
There are also a lot of people in areas that do have cell phone service that are not comfortable with cell phones. For example, many of our increasingly older population simply do not have the vision or eye-hand coordination to use the relative small devices, and there can be other problems as well (e.g.; hearing, misplacing, forgetting).
There are a number of points to the economics of the situation, some of which are:
1) Those of us who just use cell phones do so because it is a (much) better deal. One of the key competitive pressures on cell phone companies-—and there are currently four in Ohio—-is that if their services or products get too bad, cell phone users can always go back to landlines.
2) Which brings up the “carrier of last resort” argument. To use the sports analogy, how many former first-stringers really want to be relegated to the bench until such time as the new starters get hurt. Not many. They’d rather be traded...or resign.
3) So why should they be forced to sell unprofitable services to accommodate a shrinking and therefore increasingly unprofitable market?
In this Examiner’s opinion, deregulating with the proviso that landline and cell phone companies must make both available may be the least bad solution. Two alternatives are: A) To require the landline companies to continue providing service and subsidize them. Subsidies, which usually require some tax increase, are, unfortunately, a long standing American tradition; or B) Pretend the landline users own analog TVs and require them to buy cell phones and provide each with a coupon so this becomes a funded rather than an unfunded mandate. Also then require cell phone providers and landline providers to work together to make sure every square inch of Ohio is covered by cell phone service.
Unfortunately A & B will require some combination of cuts in other state spending or a state tax increase. And in both cases more regulation. Basically everything Republicans say they oppose.
So, barring any last minute change...
What a wonderful time for Ohio’s Democrats to bill Ohio’s Republicans as the party of big business and not caring about people.
** With no apologies to anyone named Rush but with due apologies to attorney Mark Lane. His well-known book is Rush to Judgment. The title seems to fit perfectly with the behavior of Ohio’s General Assembly in this matter of landlines. However, his book tells why he thinks the title describes the inaccurate conclusions of the “Warren Commission” regarding the assassination of President Kennedy.