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Set rate will come with state TV market

Phone companies, however, weren't about to fight a bill's forced freeze.

By Rebecca Catalanello, Times Staff Writer
Published March 21, 2007


TALLAHASSEE -It sounds as if phone companies are making a sacrifice:

If legislators let them into the statewide television market, they'll forgo a scheduled increase in rates on local land-lines.

Last week, Rep. Trey Traviesa said the rate freeze was part of a begrudging compromise by phone companies. But the latest version of Traviesa's legislation (HB 529), bound for the House floor today, might not be such a hefty trade-off.

The Tampa Republican offered it and several other amendments as pot sweeteners for critics of his original bill, which allows telecommunications companies to negotiate single statewide franchise agreements to deliver TV and other broadband services.

But even some in the telecom industry admit the controversial 2003 phone rate hikes have accomplished their original task.

"The biggest thing this represents is that competition is working," AT&T spokesman Don Sadler said of Traviesa's rate freeze.

During its inception, telephone companies lobbied for the Telecommunications Act of 2003 on grounds that it would do just that - increase the number of telecoms vying for customers.

The original law let telecoms raise base rates for customers up to 20 percent. Phone companies said the change would "rebalance" their costs, arguing the service they provided was more expensive than what they were charging.

While more companies are competing today, figures from the Florida Public Service Commission show phone companies are getting a smaller portion of the residential land-line market.

Cable companies oppose Traviesa's bill - called the "Consumer Choice Act of 2007" - largely because telephone companies won't have to negotiate cable contracts with counties and municipalities as they do.

Cable lobbyist Steve Wilkerson says that while Traviesa's proposed telephone rate freeze makes the bill more palatable to skittish lawmakers, it is not the bitter pill for telephone companies that some might suggest.

"What has changed since 2003," Wilkerson said, "is that the telephone companies are losing customers. And so, they are at a point where if they continue to raise prices for telephone service ... they would lose more customers. They're not giving up anything."

Traviesa concedes the trade-off wasn't terrible for telephone companies. As fewer customers demand phone-line-only service, and more seek phone, Internet and cable options bundled together, raising rates on local phone lines doesn't make good business sense.

Still, Traviesa calls the rate-freeze his blockbuster. "I was looking for a real game-changer," he said.

[Last modified March 20, 2007, 22:31:31]

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