A state audit of the Public Service Commission would clear up questions about whether it has gotten too cozy with phone companies to be impartial about the rate hikes.
Published October 27, 2003
Florida consumers' final hope for winning relief in an upcoming telephone rate case is a fair hearing from the state's Public Service Commission. The five-member commission will decide if an unprecedented 30- to 90-percent residential rate hike requested by Verizon, BellSouth and Sprint is justified. Yet recent revelations about the cozy relationship between PSC commissioners and the three phone companies raise serious doubts about the fairness of that process.
The PSC hosted a four-day convention at Miami Beach last year, with entertainment that included a dance instructor, golf tournament, deep-sea fishing and boat tour of famous houses, the Orlando Sentinel reported. Listed among the sponsors of the gathering of utility regulators from Florida and throughout the Southeast were Verizon, BellSouth and Sprint, whose representatives also attended. Other utilities gave, as well.
Exactly how much each phone company spent is not clear, because the PSC said it didn't keep records. Sprint denied it had donated money, although it couldn't explain why it was listed as a corporate sponsor on the program. BellSouth acknowledged contributing to the golf outing, as did Verizon, which gave $1,000. Verizon spokesman Bob Elek admitted to the Sentinel that such sponsorship "creates a picture that's a little awkward, just from appearance's sake," but denied any impropriety.
PSC commissioner Braulio Baez, on the other hand, misses the point entirely. "I don't see how it's unethical," he said.
Florida residents, who expect the PSC to treat them fairly in rate cases, could probably open Baez's eyes. When PSC commissioners take gifts from companies they regulate, it not only looks bad but also raises serious questions about the commission's ability to be impartial.
In addition to Baez, current commissioners Rudy Bradley and Lila Jaber attended the conference. There will be plenty of opportunities for schmoozing in the future, as well. Upcoming meetings of the state and national regulatory associations will be held in Charleston, S.C., Atlanta and at the Opryland Hotel in Nashville. In such settings, temptation can be too great to resist. A 2002 audit in Louisiana of that state's comparable commission found that regulated utilities there spent $50,000 on "things of value" for commission members and staff.
Florida Sen. Nancy Argenziano, R-Dunnellon, noted those findings in a request for a state audit of the PSC. If it is found that Florida's regulated utilities have followed similar practices, Argenziano wrote, "we can seek statutory means for prohibiting them, if they are not already banned."
A full audit would clear up one other question: Has the PSC compromised its credibility in the upcoming telephone rate case?
