Phone companies wasted no time in requesting huge hikes in their basic residential rates under the new phone law Gov. Bush signed in May.
Published August 30, 2003
If Gov. Jeb Bush and the Legislature know the meaning of the word shame, that is what they should be feeling after inviting a massive rate hike by the state's telephone companies. Verizon, Sprint and BellSouth wasted no time in taking advantage of a bill written by phone company lobbyists and signed into law three months ago by Bush.
Verizon is asking for a $77-million increase in what it charges for basic residential phone service over the next two years, a hike of 46 percent for some Tampa Bay area residents. That would mean an extra $2.25 a month the first year and an estimated $2.36 a month the second year. Sprint, which provides local service to Citrus County and parts of Hernando and Pasco, is seeking an even larger increase of between 60 percent and 90 percent.
The hollow arguments made by politicians to justify this giveaway to the phone industry look even more feeble today. Lawmakers said any cost increase in local phone service would have to be offset by an equal reduction in the cost of in-state long distance calls. Yet under the law, that savings won't necessarily end up in consumers' hands.
All the local company has to do is show that it will offset the rate hike with lower access charges to providers of long-distance service. The law is vague on how much of that savings is to be passed on to residential customers, who could end up with little relief on their long-distance bills. In fact, carriers such as AT&T, MCI and Sprint have been adding new fees to their monthly charges.
Gov. Bush opposed a similar bill in 2002, the year he was seeking re-election. This year, he justified his support by saying any rate hike would have to be approved by the Public Service Commission. It remains to be seen whether the PSC will be an aggressive gatekeeper in this matter. Luckily for consumers, interim public counsel Charlie Beck has stepped in and called for public hearings around the state before any rate hike is granted. "The core question is: Will the residential customer benefit from the proposed changes?" Beck asked.
Verizon's answer to that question rests on a ludicrous proposition. The company spokesman says once basic phone service costs more, the potential for increased profits will lure competitors into the local market, and that will be good for consumers. Of course, Verizon won't make any promises that such competition will materialize.
In fact, Verizon and the other phone giants are doing what they can to discourage competition for your local phone business. The companies are fighting a Federal Communications Commission rule that makes them rent their networks to potential rivals at a reasonable cost. If the companies are able to defeat that rule, there likely would be less opportunity for competition, not more.
If the rate hike succeeds, wealthier customers will have other options, such as relying entirely on cellular phones, but that is often not practical. Lower-income residents and retirees on fixed incomes might have to choose between paying higher rates or going without their phones, unless they are poor enough to qualify for subsidized service. All Floridians should feel betrayed by lawmakers who thought it was more important to grant bigger profits to phone companies than to protect consumers.
The following Tampa Bay legislators may not be ashamed of what they did but they can be blamed, because they voted for the hike: Reps. Kevin Ambler, R-Lutz; Johnnie Byrd, R-Plant City; Faye Culp, R-Tampa; Frank Farkas, R-St. Petersburg; Bob Henriquez, D-Tampa; Ed Homan, R-Tampa; Arthenia Joyner, D-Tampa; Ken Littlefield, R-Wesley Chapel; Sandy Murman, R-Tampa; Frank Peterman, D-St. Petersburg. Sens. Dennis Jones, R-Treasure Island; Jim Sebesta, R-St. Petersburg.
