Cities, Counties Could Soon Face Much Higher Telecommunications Costs

Updated 3:34 pm  

Michigan cities and counties could soon face big increases in telecommunications costs.

Industry onlookers and local government groups point to long-standing special rates for communities – which cities and counties negotiated with the state – that are now going away.

And they say a new law allowing companies such as AT&T to more easily phase out traditional landline service will force them to make hardware upgrades. They say many communities still use traditional landlines for things they depend on to be reliable, such as elevator lines, alarm lines, telephone backup lines, faxes, and DSL.

Dan Aylward is a telecommunications consultant who partners with the Michigan Municipal League and the Michigan Association of Counties. He worries the added costs will catch many communities by surprise.

“They don’t realize these changes are happening,” said Aylward.

“These rates are going to come up really fast on some of these. And we don’t think they’re prepared for the rates to jump up and then replace the hardware necessary there.”

Aylward says some communities going from contract rates to non-contract rates could see costs increase eightfold. But he says it’s hard to say how much costs will increase for each community.

State officials say they also expect the rates to increase.

“We have a contract with AT&T at the state that locals can leverage through our MiDEAL program that is expiring soon,” said Caleb Buhs, a spokesperson for the Michigan Department of Technology, Management and Budget.

“We are currently in the process of reviewing bids to replace the contract and are expecting a rise in costs, for many of the reasons noted (by Aylward).”

AT&T and other service providers say the move away from traditional landline service allows them to invest in more modern technologies.