Associated Press Writer
State phone regulators refused Wednesday to throw out a request by the state’s three main local phone companies to raise basic rates by a record amount, beginning at least two days of arguments over the merits of the proposal.
Attorney General Charlie Crist wanted proposals by BellSouth, Sprint and Verizon thrown out for lack of evidence that the requested rate hikes were in line with a new law requiring that consumers see benefits that make up for higher phone bills. Basic local rates would go up by $3 to $6.86 a month, depending on the customer’s local phone company under the proposals. If the increases are approved, long distance companies are supposed to see corresponding savings from certain charges that they pass on to consumers, meaning higher local rates could be offset by lower long distance bills. The Public Service Commission rejected Crist’s motion to deny the requests outright, saying it didn’t meet the high burden for throwing out a rate case without hearing arguments. «If it’s going to be dismissed, at the end of the day I’d much rather dismiss it on the merits,» said Commission Chairwoman Lila Jaber. A skeptical Commissioner Terry Deason cautioned that by going forward with the case, it didn’t mean the phone companies could assume they had a good argument, even suggesting the companies might want to withdraw their requests. The Public Counsel’s office, which is opposing the rate hikes, argues household customers won’t see corresponding benefits, predicting the savings the long distance companies get will be passed on to businesses. «Residential customers will not benefit if you grant these petitions, instead they will be harmed,» said Charlie Beck, of the Public Counsel’s office. Long distance companies have filed numbers for what kind of long distance breaks customers might see, but they are sealed for competitive reasons. AARP, the senior citizens’ lobby, also is against the increase, and was supporting Crist’s motion to have the rate hike thrown out before hearings were even held. Any decrease from long distance rates that residential customers might see will be «smaller than a breadbox,» said AARP lawyer Mike Twomey. «It’s crumbs.» Local phone companies argue that residential customers will benefit from competition in the local phone market, which should drive down prices and increase offerings of various types of services. They often point to the cell phone industry, which has unregulated competition, rather than each company having a geographic monopoly. The companies also argue that commissioners should consider the benefits of competition in and of itself, regardless of what it does to rates. The Legislature determined that competition was a goal when it passed the bill allowing companies to seek higher local rates. The industry argues that low limits on local charges are barriers to other companies getting into the market. George Meros, a lawyer for a company called Knology, said his company would get into the local phone market if the rates were enough to offset the company’s cost. «The granting of these petitions will enhance that competition to the benefit of residential customers,» Meros said. The commission began hearing testimony and arguments over the proposals later Wednesday and was scheduled to finish Friday or Saturday. A decision has to be made by the end of the year.