The attorney general says "telephone companies are seeking the benefits but ignoring the responsibilities" of a new rate law.
By LOUIS HAU
Published November 18, 2003
State Attorney General Charlie Crist Monday urged the Florida Public Service Commission to dismiss applications by Verizon, Sprint and BellSouth to sharply increase their rates for local basic service, saying the companies haven't shown how the changes will benefit residential customers.
The PSC is scheduled to hear testimony on the applications later this week and to vote on the rate hikes in December. But Crist's motion Monday requests a "summary final order" from the commission that would halt the process and throw out the applications.
"The telephone companies are seeking the benefits but ignoring the responsibilities required by the law," Crist said in a statement. "Any increase in basic rates requires an equal decrease in long-distance rates. Where is the benefit to residential customers? The phone companies can't have their cake and eat it too."
PSC spokesman Kevin Bloom said Crist's motion will likely be considered by the commission during a regularly scheduled PSC meeting, possibly as early as Dec. 2.
Under legislation devised by the phone industry and signed into law in May by Gov. Jeb Bush, local phone companies can sharply increase their rates over two to four years in exchange for corresponding cuts in the access fees they charge long-distance carriers for instate calls. After those initial changes, local phone companies will be free to increase their rates by as much as 20 percent a year without approval from state regulators.
The new law requires long-distance carriers to pass on the savings they reap from access-fee cuts to customers, but it doesn't prohibit them from passing on virtually all of the savings on to business customers, rather than residential ones.
While Verizon, Sprint and BellSouth have specified in their applications that they plan to increase their monthly local basic rates by 30 to 90 percent over the next two years, neither they nor long-distance carriers have provided any information about how much long-distance rates will fall as a result of the access-fee cuts.
Crist's motion to the PSC said the phone companies' applications "indicate residential consumers will be forced to shoulder additional costs for local telecommunications services without receiving any corresponding benefit."
The Republican has made consumer activism on utility rates a hallmark of his political career. When Crist ran for attorney general last year, his TV commercials boasted of a 1997 lawsuit he filed against Florida Power Corp. (now Progress Energy Florida) when he was a state senator from St. Petersburg to prevent the local utility from raising rates.
Earlier this year he intervened in a dispute between Progress and the Office of Public Counsel, siding with public counsel's argument that the utility owed its customers a larger rate refund that it wanted to provide.
But this is the first time Crist has spoken out about the new phone law. During legislative deliberations earlier this year, he decided to neither support nor oppose it once consumer provisions were included, such as allowing the PSC to consider the impact on phone customers before approving local rate hikes.
In September, Crist hired Jack Shreve as a special counsel for consumer affairs. Shreve retired after 25 years as public counsel, the official consumer advocate before the PSC.
- Louis Hau can be reached at hau@sptimes.com or 813 226-3404.
