Setting the Record Straight on the Consumer Choice and Protection Act

Apr 24, 2009

My View: Examine AARP’s interest in telecom debate
Guest editorial by Jim Martin, President, 60 Plus Association

It is clear that the AARP wants you to cut the cord—choose it as your wireless carrier—but keep the “red tape” for the local telephone companies.

It is time to set the record straight on SB2626/HB1465, the Consumer Choice and Protection Act. Many of the media reports about this legislation have been factually incorrect, and critics have been far less than truthful, and that includes the AARP.

To start, the bill does not raise land-line telephone rates 20 percent. In fact, this provision that AARP has stated as its main reason for opposition has existed in state law since 1995. But competition has required companies to keep rates constant.

Knowing this, state Sen. Mike Haridopolos and Rep. Will Weatherford have worked with the telephone companies, consumer and senior advocates, and their colleagues in the House and Senate to cut this allowance to 10 percent. That is consumer protection, and that is certainly good for senior citizens, most of whom live on fixed incomes.

The rate cap is not the only consumer protection in this bill. Even more will come in the form of increased competition.

That is why the 60 Plus Association has testified in support of this bill in Tallahassee. And as Florida is my home state, I have a keen interest in this legislation for seniors.

Some critics argue that this legislation will cause a decrease in service quality, but the reality of the market is that competition drives service quality and price. There are so many choices and options today. For companies to keep customers, they must provide the most competitive price with the best service. They can’t afford not to—the options for customers are too great.

Opponents of this legislation don’t give Floridians, especially seniors, credit. They are savvy enough to shop and compare. Competition keeps rates down and keeps companies on their toes—answering to their consumers on technology, service and price.

This bill is about the consumers, choice and consumer protection. It promotes competition, adds protections for consumers and now extends Lifeline eligibility from 135 percent to 150 percent of the U.S. poverty guidelines, potentially providing this valuable service to more than a half-million additional Floridians.

AARP has said that expanding the Lifeline program is just a smokescreen. How can allowing more consumer choice and competition to flourish be a bad thing? How can cutting the rate cap allowance in statute in half be a bad thing? And how can expanding the eligibility of Lifeline to more than a half-million Floridians be a bad thing?

AARP has been a vocal opponent of this bill and has made misleading claim, but what would you expect from a telephone competitor. As reported by the St. Petersburg Times, what AARP has not mentioned in the debate is that it partners with a wireless cellular company, exempt from Public Service Commission oversight, to offer its members cellular service at a discount. Is AARP acting as an advocate or a competitor trying to kill good legislation that protects consumers and promotes competition?

AARP Services Inc., a wholly owned, for-profit subsidiary of AARP, collected nearly a half-billion dollars in royalties and fees from partner companies — that is almost double AARP’s annual revenues from memberships. By selling its logo and endorsing these companies, AARP makes millions of dollars to fund its advocacy program. I don’t have a problem with AARP’s business practices, but I ask you, whose smokescreen is it?

If you actually read the bill and examine the underlying motives behind those opposed, you will see that this bipartisan legislation is good for the state and good for Florida consumers and seniors.

Times have changed, technologies have changed, service providers have changed, and now we need to change Florida law so that all telephone service providers can fairly compete for our business. Florida’s red tape needs to be cut, consumers need increased competition, and we all need lower prices, better choices and more options for service.

Reprinted from the Tallahassee Democrat

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