Looks like Maryland is jumping on the “stop the IP transition” bandwagon. On January 8, 2014, the Maryland General Assembly will hear the first reading of HB 48, a bill that prohibits certain telephone companies from replacing landline or wireline service with certain wireless telephone service, subject to certain exceptions. The bill also prohibits the Maryland Public Service Commission from authorizing such replacements. The bill appears to provide an out for telephone companies where they can replace landline or wireline service with certain wireless service where the company has received authorization from the customer.
In addition, HB 48 wants telephone companies to document the impact of transitioning from wireline or landline to a wireless system and to provide such documentation to the Maryland PSC for their evaluation.
Sounds to me like the Maryland legislature doesn’t want to spend time waiting on the Federal Communications Commission to get its act together on scheduling IP transition trials. The impact from this bill, in my opinion, is really a rate increase for Maryland’s wireless consumers. Limiting the number of wireless subscribers that a carrier can add to its network increases the marginal cost of providing service to existing subscribers. A wireless carrier will have to pursue pricing schemes necessary for recovering the increased costs.
Prices for wireline customers may go up as well. Telephone companies such as AT&T and Verizon have argued that it cost more to provide service via old legacy telephone networks. Digital networks have greater capacity to provide not only voice but broadband data services. Customers are cutting the cord and moving to wireless only services, accessing the Internet via their smartphones and iPads. Customers like the convenience of being mobile. I’m typing this post right now on my laptop connecting to the Internet via WiFi.
States like Maryland believe they are protecting consumers by skirting 47 USC 332(c)(3), which preempts state regulation of wireless rates. What they are really doing is negatively impacting consumer welfare by forcing telephone companies to provide services over networks that are not the most efficient and these inefficient networks mean higher prices passed on to consumers.
Given the Democratic party’s control of the Maryland legislature, I expect the bill to pass and Governor O’Malley to sign it.