Charlie Crist is doing Floridians a service by standing up to the big phone companies. Last week, the attorney general called on state regulators to reject a hefty rate hike proposal. Crist says the phone companies have failed to show that higher rates will benefit consumers in any way. He is right, and Florida's Public Service Commission should dismiss the request.
By throwing the weight of the state attorney general's office so clearly on the side of consumers, Crist has raised public awareness of the ratemaking process. Commissioners might become more serious about getting their priorities straight. Earlier this month, the PSC rejected a similar call by the seniors' lobby, the AARP, to dismiss the rate request. It's not as easy to blow off the attorney general, whose office serves as the top legal advocate for Florida consumers.
Crist also has further exposed the sham behind the telephone rate-hike bill that his party's own governor signed into law this year. Supporters championed the legislation as a tradeoff: In exchange for higher local rates, telephone companies were supposed to cut the price of in-state long-distance calls. The added revenue was also supposed to attract new providers to Florida, improving service, expanding choices and tempering prices through competition.
But while Verizon, Sprint and BellSouth have detailed how they plan to increase monthly local rates by 30 percent to 90 percent over the next two years, neither they nor the long-distance carriers have said how they would pass on the savings from lower in-state rates. It's not clear how much customers would save, when and how the savings would come or even whether the cuts would benefit residential or business customers. Company executives have not been forthcoming, calling the request for details "premature." They also say disclosure would damage their ability to compete.
This is exactly what consumer advocates had reason to fear would happen when lawmakers passed the phone bill. The public deserves to have this information well before a rate-hike debate even begins. The law, after all, was passed on the argument that the benefits of increasing basic phone rates would be clear and convincing. As Crist said in a statement: "The telephone companies are seeking the benefits but ignoring the responsibilities required by the law."
This is not a dispute over the law itself but the due diligence that needs to come before the commission can consider a rate request. The PSC, which might face the matter next month, should tell the phone companies to re-submit their applications for higher rates once they are ready to level with the public.
