Flexing its political muscle in Annapolis, Verizon Communications Inc. beat back two bills yesterday aimed at increasing competition in Maryland's local telephone market.
Del. Joan Stern withdrew the bills, one to force a breakup of Verizon and another to set up a task force on competition, after it became apparent that neither would be approved by the House Environmental Matters Committee.
The Montgomery County Democrat said she pulled the plug after committee leaders agreed to form a working group to study the local telephone market, which continues to be dominated by Verizon seven years after the Public Service Commission decided to open Maryland to competition.
Consumer groups and some Verizon customers have complained that the company has dragged its feet on competition in the state so it could continue to collect inflated access charges from other carriers. Verizon denies the allegation.
Among the resulting anomalies in the telephone market is that most customers pay higher rates for in-state long distance calls than state-to-state calls.
In some parts of the state, especially Stern's district in northern Montgomery, local residents are unhappy about the size of local calling areas.
Stern expressed satisfaction with the outcome, saying it was similar to the process the General Assembly used before it passed utility-deregulation legislation two years ago.
"It may take longer, but I think I'll get a better end product," Stern said.
One of the bills, never given much of a chance, would have forced Verizon to set up separate subsidiaries to handle its retail and wholesale phone services. The wholesale unit, which would have owned the network, would have had to treat Verizon's retail business on the same basis as prospective competitors in marketing services to consumers.
The other would have set up a formal task force, including representatives of the Senate and House, the executive branch, businesses and consumers.
Verizon did not oppose the task force bill at its House hearing but testified against it in the Senate after Stern introduced the breakup bill.
Sean Looney, Verizon's chief lobbyist in Annapolis, said the company opposed that bill because the proponents had jumped to the conclusion that a breakup was necessary.
Verizon strongly opposed the breakup bill, arguing that it would cost millions of dollars and thousands of jobs.
The company enlisted the lobbying support of its unions, which testified against the bill.
Stern said the legislation failed because "Verizon is a very successful monopoly."
"I think there was a campaign of disinformation about the task force," she said.
While Stern's legislation failed, it did focus attention on a topic that had been out of the news for several years as the PSC turned its attention to power deregulation.
PSC Chairman Catherine I. Riley has promised a renewed focus on telecommunications issues.