After rejecting a call to dump phone company applications for rate increases, commissioners signal concern for their effect on consumers.
By LOUIS HAU
Published December 11, 2003
TALLAHASSEE - The state's big phone companies won an initial skirmish Wednesday before the Florida Public Service Commission.
The regulatory panel unanimously rejected a request by Attorney General Charlie Crist that it throw out applications by Verizon, BellSouth and Sprint for increases in local basic rates.
But the commissioners also sent clear signals that they will consider the impact on residential customers when they vote on the applications.
One commissioner, Terry Deason, even suggested that the phone companies consider rewriting their applications, implying they should make them more consumer-friendly.
Critics of the phone rate increases chalked up the day as a partial victory. "You're supposed to make lemonade out of lemons," said public counsel Harold McLean, whose office had supported Crist's motion. "They gave us lemons, but they gave us some sugar, too."
The PSC opened hearings that are supposed to culminate in a vote on the applications for rate increases of 30 percent to 90 percent in basic local phone rates throughout the state. Although the hearings had been scheduled to run no longer than Friday, PSC Chairman Lila Jaber said Wednesday that they might extend into Saturday.
Under a law signed by Gov. Jeb Bush this year, the phone companies are permitted to raise rates over two to four years provided they make equal cuts in the access fees they charge long-distance companies. And that's supposed to lead to savings for consumers on their instate long-distance calls.
Once these rate hikes have been completed, the law permits the phone companies to increase their local basic rates by as much as 20 percent a year without further tradeoffs or PSC approval. Before the new legislation, annual increases in local phone rates were restricted to one percentage point less than the rate of inflation.
The stated aim of the new regulations, crafted by the phone companies, was to encourage greater competition in the market for local phone services. But consumer advocates have expressed concern that the rate increases by Verizon, BellSouth and Sprint will outstrip any savings to residential customers on instate long distance calls.
Crist's office had filed a motion with the PSC last month requesting a "summary final order," which would have thrown out the rate hike applications. Crist argued that the companies weren't meeting the new law's requirement that residential customers, not just businesses, benefit from rate changes.
"The public that you and I work for, they are in fact the residential consumer," he told the commission Wednesday. "You're the Public Service Commission ... not the Phone Company Service Commission."
Former state Supreme Court Chief Justice Major Harding, now an attorney representing Sprint, countered that the companies' applications met the law's goal of encouraging new competitors in the local phone business.
"The attorney general, bottom line, disagrees with the statute and would like for you to rewrite it," Harding told commissioners. "I would respectfully submit that you do not have that privilege."
Even as the commission voted 5-0 to reject Crist's motion, it also signaled that residential customer interests will loom large in its deliberations.
Jaber and Deason emphasized that their votes were based strictly on their view that Crist's motion failed to meet the tough legal standards that have to be satisfied to grant a summary final order. They also said they want to consider all the evidence.
Deason described as troubling data that long-distance carriers presented about what proportion of the savings from lowered access fees would be passed on to residential customers. But he was forced to be circumspect about the data because the companies had classified it as confidential for competitive reasons.
Saying that "there needs to be some soul searching" by the local phone companies, Deason said they may want to withdraw their applications and submit amended versions with more to offer residential customers.
"I'm just laying it out there for everyone," Deason said.
Alan Ciamporcero, Verizon's southeast regional president for public policy and external affairs, said he was pleased that the commission rejected Crist's motion and decided to proceed with the technical hearings.
"There's been so much prologue here," he said. "We want to get to the merits of the case."
All eight people who addressed the commission in Wednesday's final public hearing said they opposed the rate increases.
"If a rate increase like this went through," said Arthur Maruna, a 72-year-old retiree from Chiefland in Levy County, "it'd be money out of my pocket."
- Louis Hau can be reached at hau@sptimes.com or 813 226-3404.
