1. Archive

Senate backs local phone rate study

Published Sep. 13, 2005

Despite vocal opposition from consumer advocates, the door is open wider than ever for Floridians to pay more for local telephone service.

If Gov. Lawton Chiles supports a controversial plan that won unanimous approval in the state Senate Wednesday, utility regulators would study the need to raise rates, and lawmakers could vote on an increase in a year.

"I'm very happy," said state Rep. Joe Arnall of Jacksonville Beach, the Republican chairman of the House Utilities & Communications Committee.

Two months ago, Arnall was working with the telephone industry on a plan to double the price of local phone service. Industry members, including GTE Corp., BellSouth and Sprint, argued that they had to subsidize local service since rates are so low.

Higher prices, they said, would encourage competition that would benefit consumers in the end.

But under fire from constituents, consumer advocates, Attorney General Bob Butterworth and a barrage of newspaper editorials, Arnall and his supporters watered down the plan.

The new legislation that passed Wednesday requires the Florida Public Service Commission to hold public hearings and study "fair and reasonable rates" that local companies could charge consumers.

The final measure also would lower by $54-million the per-minute "access charges" that local carriers charge long-distance companies such as AT&T and MCI, passing the savings along to consumers. It also seeks to limit "slamming," when long-distance carriers switch a customer's long-distance provider without permission, and "cramming," when phone companies put unwarranted charges on customers' bills.

But most of the criticism has focused on the Legislature's parameters for the PSC's study. Among other things, the measure requires the commission to consider what is "affordable" for consumers, meaning customers' incomes may be a factor.

But companies' profits will remain largely a secret, because the measure does not allow the PSC to consider the financial information of business affiliates, such as GTE Mobilnet or Internet services.

What's more, some consumer advocates think the PSC's study would limit the public's voice. In a regular formal rate hearing, the five appointed commissioners would make a decision after testimony from lawyers on both sides and the state-appointed consumer lawyer, Public Counsel Jack Shreve.