Texas consumer groups dismiss VoIP as antidote to high phone bills

Consumer advocates in the U.S.' second most populous state are fighting legislation currently under consideration in the Texas State House (HB 13) that would, they charge, lead to skyrocketing costs for basic phone service. The legislation (SB5) has already passed the Texas Senate.

In their complaint, which they sent to Texas Senate and House leaders yesterday, Texas AARP president Gus Cardenas and Consumers Union-Southwest policy analyst Tim Morstad also downplayed the effectiveness of VoIP as a consumer alternative to high bills for traditional phone services.

"A key provision in HB 13 / SB 5 has largely flown below the radar. It would allow for unlimited rate increases for customers who want basic phone service with as few as one add-on service (call waiting, caller ID, unpublished number, etc.) starting January 2006," Cardenas and Morstad wrote. " Even more disturbing, phone companies would be able to raise basic-only phone service rates as early as September 2007. Basic-only phone service is essentially a no-frills phone line, without add- ons.

Later in the petition, the advocates then dismissed VoIP as a viable money-saving telecom strategy for most Texans.

"Big phone companies are over-hyping new technologies such as Voice over Internet Protocol / Digital Phone Service (VoIP) and wireless phones as competitive alternatives for basic-only phone customers," they wrote.  "VoIP is not available to most Texans since it requires a high-speed Internet connection. It too (as with cell service) has limited access to 911 and costs significantly more than no frills phone service."

That cost-analysis sounds a bit surprising to me. In the state of Texas There's often only a difference of $2 or $3 a month between basic frills traditional local service and several popular VoIP plans.