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This time around, phone companies win

Lawmakers approve the deregulation bill. Verizon customers may see up to $5 increases over four years.

MICHAEL SANDLER
Published May 2, 2003

TALLAHASSEE - Phone companies celebrated Thursday as Florida lawmakers sent the governor legislation that could lead to the largest local rate increase in state history.

Gov. Jeb Bush is expected to sign the bill into law.

With a 93-20 vote, the House followed the Senate in approving a telecommunications deregulation bill that allows phone companies to charge more for basic service if they agree to lower access fees for long distance service.

Bush vetoed a similar measure last year, but supports this version because lawmakers agreed to conditions he set: limited authority to the Public Service Commission to oversee rates and expanded discounts for poor people.

Phone companies estimate increases of $3 to $7.25 over the next four years, depending on the company. After that, if the PSC determines competition exists, rates could go up by 20 percent each year.

In the Tampa Bay area, Verizon customers can expect rates to increases by as much as $5 over the next four years, according to a government analysis.

Phone companies wrote the bill, spent millions contributing to political campaigns and hired dozens of lobbyists to smooth its passage.

Supporters of the bill say the higher rates will draw more companies, increasing competition and lowering rates.

"When you give people choice, you empower them," said Rep. Ken Littlefield, R-Wesley Chapel. "So I say give them power, vote for this bill."

Not everyone was convinced. As in the Senate the day before, several House members stood up to object.

Rep. Manuel Prieguez, R-Miami and the chairman of the House Business Regulation Committee, questioned how the bill would increase competition when three companies owned nearly all the existing lines in Florida.

For new companies to enter the market, Prieguez said they would have to work deals to use lines owned by BellSouth, Verizon and Sprint. Otherwise, they would have to build their own, a costly venture.

Prieguez, a seafood exporter, could not understand why phone companies spent so much money to increase competition, something businesses never seek.

"How can we assume for a second this makes any kind of sense?" Prieguez asked.

But supporters said it was time for competition. They discounted the public outcry against the bill, saying they were elected to make tough decisions.

"The people in our districts cannot fall prey to scare tactics," said Rep. Kevin Ambler, R-Lutz. "It's an issue of trust."

The PSC would not approve rate increases. Instead, it could approve petitions by phone companies seeking to lower the access fees they charge long distance carriers.

Then phone companies would be allowed to rebalance their total revenue by increasing local rates to offset the money they lose from lower access fees.

Consumer groups say people who rely on basic service will see only increases, and the bill does not require phone companies to pass along cheaper long distance service.

They say lawmakers have gambled on a mere promise from phone companies.

"Unlike a lot of legislation, where you have to wait to see what happens, this one is going to be very clear when a whole lot of people open their phone bill," said Lyn Bodiford, a lobbyist for the AARP.

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