The Truth-O-Meter Says:
Armstrong

A telephone company will no longer have to provide landline service to customers if there is an alternative provider, including wireless.

Ward Armstrong on Monday, March 21st, 2011 in a House floor speech.

Ward Armstrong says a telecom bill would allow phone companies to refuse laying landlines for new customers

House Minority Leader Ward Armstrong has a contentious relationship with Virginia utility companies.

On Feb. 21, Armstrong took the House floor to oppose a telecommunications bill that updated telecom laws and changed certain regulations faced by landline carriers. Armstrong, D-Henry, disliked provisions in the legislation, which wound up passing the General Assembly.

One was a change that would allow phone companies to refuse to not run new landlines to homes and businesses if there is an adequate alternative that the customer could use, such as cell phone service. Another was a provision in the bill that Armstrong said would erode  the State Corporation Commission’s ability to regulate electric utilities.

Here’s what Armstrong, who is exploring a 2013 bid for statewide office, said on the House floor:

"If you pass this bill, a telephone company would no longer have to provide service by way of a landline facility to any customer, residential or business, who requests such service if there is an alternative provider, either wireless or wire-line. If the service is available through a cell phone, than that is an adequate substitute even if the service does not meet the service needs or pricing requirements of the customer."

We looked at the legislation. It says that "a telephone company shall not have the duty to extend or expand its facilities to furnish service and facilities when the person, firm or corporation has service available from one or more alternative providers of wireline or terrestrial wireless communications services at prevailing market rates."

According to the SCC and Verizon, that means there is no requirement to run a landline to any new customer who can obtain coverage from another source, including cell phones.

Robert Woltz, Jr., the president of Verizon’s Virginia landline division, said his company increasingly faces situations where a developer building a new subdivision signs an exclusive telecom agreement with a cable company, such as Cox or Comcast. If one or two customers in the neighborhood want their landline from Verizon, Woltz said it makes little financial sense for the company to pay for the extensive wiring needed.

"If company ‘X’ serves the subdivision with Triple Play (cable, Internet and telephone service) and I only do voice, I shouldn’t have to invest lots of money to serve a few customers," Woltz said.

The new rules say a company can only decline to provide landline service if there is a "reasonably adequate" alternative. The SCC is now deciding how it will enforce that standard.

"It may just be on a case-by-case basis, unless there are a lot of complaints and the commission decides they need to make a defined standard," said William Irby, director of the  SCC’s Division of Communications.

Woltz said the SCC could check service availability in suburban areas through online searches and contacting cable companies. In disputes over whether wireless service is adequate, he said regulators could make house visits to test reception and ensure a phone works throughout a person’s house.

In his speech, Armstrong warned the bill could affect 4 million Virginians. But anyone who already has a landline should not see any changes. The bill would require landline providers to give any existing customer the option to have a landline repaired if service is disrupted.

"I don’t get to tell existing customers what to do," Woltz said.

Claire Wilker, Armstrong’s chief of staff, said her boss is concerned wireless service would be more expensive than landlines for consumers while offering fewer features.

There is also the concern with prices. The new law requires that the alternative service be available at "prevailing market rates." But Irby said those comparisons occur only in the same group of technology, meaning wireless prices are compared to other wireless services, not landline prices.

Let’s review.

Armstrong said a bill approved by the General Assembly would allow phone companies to refuse to run landlines to new customers if alternative services, including cell phones, are available. He’s right and we rate his claim True.

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About this statement:

Published: Saturday, March 5th, 2011 at 8:00 a.m.

Subjects: Regulation

Sources:

Virginia General Assembly, Senate Bill 1368, accessed Feb. 28, 2011.

YouTube, Del. Armstrong on HB2367 and SB 1368, Feb. 21, 2011.

YouTube, Del. Kathy Byron sets the record straight, Feb. 22, 2011.

State Corporation Commission, Staff analysis of 2011 Telecom Modernization Bill, Jan. 24, 2011.

State Corporation Commission, Electric rates in Virginia, accessed March 3, 2011.

PolitiFactVirginia, Sorting out Ward Armstrong's claim on electricity rates, Jan. 27, 2011.

Interview with Robert Woltz, Jr., President, Verizon Virginia, March 3, 2011.

Interview with William Irby, director, Division of Communications, State Corporation Commission, March 3, 2011.

Interview with Claire Wilker, chief of staff for Del. Ward Armstrong, March 3, 2011.

Written by: Jacob Geiger
Researched by: Jacob Geiger
Edited by: Warren Fiske

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