Almost every year in the Missouri legislature there’s a telecom regulation bill up for debate.  The legislature is constantly playing catch-up to the rapidly changing industry.  This year’s battle is the same as last year, when an effort to lower access fee was stalled to death in the Missouri Senate.

At issue is the rate the traditional phone companies charge to connect call to their installed consumers who use landlines.  Wireless companies sending calls resent the fees which are many times the actual cost of connection. These fees are regulated, not market-driven since there’s no competition.

Consumers are largely oblivious to the rates. We don’t see a connection fee on our phone bill, though it could be argued that our bills would be lower if the cost of connection decreased.

The battle has largely been between the small landline phone companies, like Mark Twain, and the wireless companies, like Sprint.

For big telecom companies, like Verizon, with both wireless and landline customers it’s been a doubled edged sword. They both pay out the access fee when their calls are connected through the local networks, recoup some of the cost through fees that they charge for access to their customers.

Still with trend continuing of fewer landlines and more cell phones, the industry heavies seem to be throwing their lot with the pure wireless companies.

Sen. John Griesheimer chairs the Local Government Committee which will work on this issue. He’s convened the combatants for a few gatherings to air their concerns and look for common ground.  But there hasn’t been much movement toward a legislative group-hug.

Griesheimer is known for his “aw-schucks” demeanor.  He’s successfully shepherded several economic development bills through the legislature in his tenure.  But while that works in the arena of economic development, it might not be the right approach in this case.  Economic development bills are really just a basket of goodies being divvied up.  Some people may win bigger than others, but all the players generally walk away winners. And no one is worse off than they were the year before.

In this battle, there could be real losers.  And that make compromise hard.

In fact Griesheimer’s bill is full of pain.  It would mandate a 50% reduction in the rate over the course of five years. A similar bill was successfully filibustered last year by senators who were sympathetic to the plight of the mom-and-pop operators whose business model relies on charging high rates.

However that bill didn’t make it to the floor of the Senate until he second half of the year.  At that point, the backlog of bills makes filibustering easier because senators would rather debate a bill with a chance of passing than one with irreconcilable opposition.

The reformers are trying to move a bill to the senate floor earlier this year and hope that it will be harder to kill because it would force those opposed to hold the floor much longer.  That prospect could spur a compromise.

One potential compromise comes in the form of a bill introduced by Sen. Kurt Schaefer.  It would use the Universal Service Fund (an on-the-books subsidy which originally compensated phone companies for the cost of building out to lower population areas) to “make whole” any losses that the incumbents lose from loser access rates.  To pay for the new subsidy, Schaefer’s bill would require voice over Internet protocol (VOIP) and commercial mobile radio service providers to pay assessments into the USF. 

That, of course, just creates another set of losers