SPRINGFIELD - SBC would be able to charge its competitors a higher fee for leasing its lines, under a controversial bill the Illinois House passed Wednesday on a vote of 66 to 39.
State Rep. Joe Lyons, D-Chicago, called the bill "ultimate special interest legislation" and said it would help SBC at the expense of other telecommunications businesses that operate in Illinois, hurting competition and driving some companies out of business.
The result would be higher rates for residential and business customers, said David Doty, a vice president at AT&T.
But SBC Illinois President Carrie Hightman said rival companies could absorb the higher wholesale rates without raising their prices, and the legislation would correct an unfair pricing situation.
"Reform is needed because, currently, the system that's in place gives competitors, especially MCI/WorldCom and AT&T, a guaranteed 56 percent profit margin, while we are not even allowed to recover our costs through the rates we charge for the wholesale service we are required to provide," she said. "The system has hurt consumers, has hurt employees and is not good for the state. What the bill will do is move us to a more fair-pricing system."
Some lawmakers questioned the speed with which the measure passed, having been introduced as an amendment Tuesday and called for a vote in the full House the very next day, and said the General Assembly should not intervene with the Illinois Commerce Commission, the agency charged with setting telecommunications wholesale and retail rates.
A case regarding SBC wholesale rates is currently pending before the commission, with a decision due later this year.
"This is the most egregious end run around not only our process, but around the Illinois Commerce Commission, our regulatory body," said state Rep. Julie Hamos, D-Evanston.
State Rep. Naomi Jakobsson, D-Urbana, voted no, saying she believed it would lead to higher rates for residential and business customers.
But state Rep. Bill Black, R-Danville, who voted yes, pointed out that AT&T, MCI and other SBC competitors cannot raise their retail rates without approval from the Illinois Commerce Commission.
He said SBC built the vast network of lines, poles and other telecommunications infrastructure over the years at great cost and continues to maintain it and improve it, and the company should be able to charge competitors a fee that reflects that.
The measure now heads to the Senate for consideration.
You can reach Kate Clements at (217) 782-2486 or via e-mail at email@example.com .