The state is moving to impose a one-year moratorium to prevent Verizon New Jersey from replacing traditional copper landline phone service with new wireless alternatives.
The legislation (A-2459) stems from what happened after Hurricane Sandy, when some customers who lost their landline phone service were told by the telecom giant, its would be replaced by a wireless alternative called Voice Link.
The new service, however, cannot handle many basic data applications, including processing faxes, allowing credit card transactions, and handling alarm company services, according to critics of the system.
“There are still too many unanswered question and too many scary scenarios to force this change on residents without looking at the potential impact,’’ said Assemblyman Daniel Benson (D-Mercer), the sponsor of the bill, which cleared the Assembly Telecommunications and Utilities Committee yesterday.
Verizon executives strongly opposed the measure, saying its offering of the service is similar to what many other companies are now suggesting to consumers, who would not be affected by the legislation. AT&T also opposed the bill.
The dispute demonstrates the rapid changes occurring in the telecom industry, where many consumers are abandoning their traditional phone service for wireless and Internet-based alternatives. According to Verizon, 39 percent of households nationwide only have wireless phones, having abandoned conventional landlines.
But senior citizens and low-income households who cannot afford to move to alternative services should not be left behind by abandoning the state’s requirement that the utility provide basic phone service, critics said. Verizon’s basic service, which provides a dial tone and unlimited local calls is the least expensive in the nation.
“The problem is this transition is happening without stakeholders talking to one another,’’ Benson said. His bill would direct the state Board of Public Utilities to conduct a study on the issue and makes recommendations back to the governor and the Legislature.
“A service outage shows just how vulnerable we are to technology,’’ said Assemblyman Upendra Chivukula, the chairman of the committee and former engineer for AT&T. “Rather than plow ahead with these wireless alternatives, let’s first hear from residents and public safety and figure out what the potential repercussions are.’’
Bob Master, political and legislative director for District One of the Communications Workers of America, said Verizon’s move to convert some areas to wireless is a move to get out of less profitable markets. His union members work for Verizon.
“They are interested in providing high-quality services where it is most profitable to them,’’ Master said, referring to the company’s FiOS system where customers bundle together Internet, telephone, and TV programming into one package. Those bundled offerings are 10 or more times expensive than the basic service used by more than 1 million customers in the state.
The amended bill does not affect Verizon’s efforts to extend its FiOS system.
In the past, Verizon said its Voice Link service was being offered to fewer than 100 customers in Mantoloking, which was among the communities hardest hit by Sandy. At the hearing, company executives acknowledged 1,800 customers around the state have chosen Voice Link as their preferred option for telephone service and said they are very happy with it.
“This legislation is not good public policy,’’ said Leecia Eve, a vice president of state government for Verizon. ”It is not good for our customers. It is not good for New Jersey.’’
Sara Bluhm, a vice president of the New Jersey Business and Industry Association, echoed her comments. “Looking at any time the state sets moratoriums that sets up red flags for the business community,’’ she said.
But Ev Liebman, associate director for AARP of New Jersey, disagreed. “We want to make sure such services are not priced beyond the means of our citizens,’’ she told the committee.