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Consumer Protection & Corporate Accountability

Landline Phone Deregulation to Deny Protection to Illinois Consumers

Illinois has enacted a law that will take away a necessary protection for landline phone consumers. SB 107 strips away the authority of the Illinois Commerce Commission to ensure that landline phone users — residing in 78 percent of households in the state - receive reliable and affordable phone service. Under the law, Internet-based phone services would be completely unregulated. The ICC has been instrumental in promoting universal access to telecommunications services in the state, as mandated by the state’s Telecommunications Act that was last updated in 2001. It required a service provider to offer high-speed Internet access to at least 90 percent of homes outside of the Chicago Metropolitan area. This newly enacted law eliminates such requirement and the ability of Illinoisans to access affordable High-Speed Internet services. Consequently, the law threatens to reduce investment in broadband that could make the state more competitive in the global market.

Banks Take Advantage of States in Fiscal Crisis

The same large banks whose unregulated actions were primary contributors to the economic downturn have also been manipulating state and local governments to profit from budget deficits for years.  Essentially, banks are alluring states with the promise of a means to cut borrowing costs and increase returns through the use of an interest rate swap.  The mechanism is a derivative that allows cash-strapped municipalities and states to exchange interest payments on a variable bond deal for an allocation of funds from a bank.  So, the bank would establish a fixed rate on the bond and swap for the variable "interest rate of the bond that was set by larger macroeconomic forces, such as the Federal Reserve."  Unfortunately, the results have been disastrous.