The Iowa Senate this morning (Thursday) approved a bill that would deregulate Qwest, Frontier and Iowa Telecom’s local phone service in Iowa. Senator Steve Warnstadt, a democrat from Sioux City, says the bill opens up the state’s telecommunciations industry to free market principles. “It was just a few short years ago that as I was shopping around for long distance coverage, I had difficulty finding in-state rates for less than 10 cents a minute,” Warnstadt says. “Looking around now, I can call the United Kingdom for three cents a minute. The market has changed considerably and it’s time for the state to take that into account.” Warnstadt says federal deregulation of the cellular phone industry shows what can happen. In the early 1980s, there was a monopoly on cellular phones. A recent U.S. Chamber of Commerce study found per-minute rates for cell phones dropped 80 percent once the cellular market was wide open. In-state long distance service was deregulated a few years ago; this bill gets state regulators out fo the business of setting the rates for local phone calls. Warnstadt says Governor Vilsack has indicated a willingness to move away from price-regulation of the communications industry. Senator Jerry Behn, a republican from Boone, says he “wholeheartedly” backs deregulation. Behn says the lobbyists, legislators and busineses involved worked long and hard on the bill. “I think there are a lot of good things that this bill is going to open up,” Behn says. The bill calls for continued state regulation of single phone lines for businesses or homes for the next three years to ensure phone companies to not raise prices dramatically for Iowa consumers, particularly the elderly, who have just one phone line. The bill passed the Senate on a 47-to-one vote. It passed the House last month, but must be considered again by the House because of some technical changes the Senate made to the bill this morning.
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