Saying that sufficient competition exists in the Chicago area, SBC last Thursday asked the Illinois Commerce Commission to deregulate basic local measured service in Chicago. The Citizens Utility Board has recommended that the ICC not do so, claiming that SBC will raise local rates.

In Chicago, and much of Illinois, Wisconsin and California, local telephone service is metered on a per-call or per-minute basis, plus a monthly fee for dial tone. This is referred to as measured service. In almost all of the U.S., however, flat-rate (unmetered) local service is available, usually at a higher rate than measured service.

SBC said that it had lost 1.7 million lines to competitors in Illinois since 2001, and that residents in the Chicago area have plenty of choices for local telephone service.

SBC recently won deregulation of local telephone service in several Wisconsin cities.

The Citizens Utility Board, a consumer watchdog group, however, disagreed.

CUB claims the filing is premature because most Illinois consumers still rely on SBC landline service.

“Make no mistake about it, SBC’s plan will mean a huge increase in costs for consumers,” said David Kolata, executive director of CUB. . . .

Kolata said that many SBC services have seen prices increase after being deregulated. For example, 411 service was free when it was regulated but climbed to $1.25 after it was deregulated.

SBC Illinois President Carrie Hightman said that real competition would give customers better value and more choices. She noted that prices in the long-distance market and for wireless service decreased because of competition. — Chicago Sun-Times

The ICC is expected to decide on the request by next summer. We’ll report again as this request moves forward.

While the relevance of basic local service has declined in the face of unlimited local and long distance packages, not everyone needs such a package, and they tend to be much more than some customers are willing or able to pay. Basic local service is going to be around a while longer, regulated or not.