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Phone rates on verge of soaring

A bill that would allow companies to raise basic rates as much as $7.25 in the next four years appears headed for the governor's approval.

Published May 1, 2003

TALLAHASSEE - The Florida Legislature Wednesday night was poised to send to the governor legislation setting the stage for the largest phone rate increase in state history.

The Senate approved the bill 27-12 after a brief but spirited debate.

If the House followed suit as expected late Wednesday, Gov. Jeb Bush was prepared to sign the measure into law, one year after vetoing a similar proposal in the face of stiff public opposition.

Phone companies wrote the legislation (SB 654), contributed millions of dollars in campaign contributions and hired dozens of lobbyists to smooth passage.

The bill gives the Public Service Commission limited power to approve or reject higher phone rates.

Basic phone service could rise as much as $7.25 in the next four years, legislative analysts concluded, and as much as 20 percent a year after that.

The phone companies argue that higher rates will increase competition that could eventually lead to lower rates.

Rep. Nancy Argenziano, R-Dunnellon, was one of eight Republicans and four Democrats who voted against the bill.

"This is the biggest suppository legislation we've ever been asked to introduce to the body politic," Argenziano said. "It's the largest rate hike in the state's history."

Bush supports the measure because of the Public Service Commission's limited oversight and an agreement by phone companies to expand discounts to the poor.

More than 1-million people would qualify for the so-called Lifeline program for the poor, but only about 2,000 are currently enrolled.

Phone companies said they would advertise the program but the promise was not included in the bill.

Sen. Gary Siplin, D-Orlando, asked phone companies to guarantee $675,000 for an advertising campaign and include it in the bill. But on Wednesday he took them at their word and voted for the measure.

The governor's obvious intention to sign the bill left consumer groups dejected.

But they aim to keep at him.

"He's made it clear he's going to sign it," said Lyn Bodiford, a lobbyist for the AARP. "We wrote him a week and a half ago and asked him to reconsider. We haven't heard back."

Bush has said he is confident the PSC will follow set criteria when phone companies ask for higher local rates in the name of improving competition.

Rate increases would be allowed only if they are "revenue neutral." That means rate reductions for long distance calls made within Florida would offset increases in basic rates.

There are no guarantees those reductions would be passed along to consumers, however, and even if they were, they do little to help people who use only basic service. The PSC also is limited in its ability to reject requests for higher rates.

Supporters, however, say higher rates will draw more phone companies to offer basic service, increasing competition and eventually lowering rates.

"It's time we trust competition," said Sen. Mike Haridopolis, R-Melbourne, the bill's sponsor.

Argenziano said if the PSC ever concludes that basic phone service really is competitive, the phone companies would be allowed to raise rates for people who get Lifeline discounts. She said she hopes to share her concerns with Bush.

"I think he's misinformed," Argenziano said. "He really should give me time to sit down and show him he's been sold a bill of goods."

Sen. Anna Cowin, R-Leesburg, said if the bill was consumer friendly there would not be "a million and one lobbyists from telephone companies" trying to push it through.

The House took up the Senate bill early in the day, but postponed action after a short discussion suggested many members intended to vote for it.

House Speaker Johnnie Byrd, R-Plant City, said he had no idea when they would get to it, or how his members would vote.

-Staff writer Lucy Morgan contributed to this report.

[Last modified May 1, 2003, 04:06:34]

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