Phone lobbyists busy
By SHELBY OPPEL
© St. Petersburg Times, published March 18, 2001
TALLAHASSEE -- Inside your bill for long-distance telephone service is a fee that goes directly to your local phone carrier. It's like a rent payment for the long-distance company's use of the local carrier's phone lines.
Like any tenant, the long-distance companies want cheaper rent. And if they get it, they say they'll lower your long-distance charges.
Their landlords, the locals, say lowering the rent will force them to charge more for the local phone service they now provide below cost.
"You can't just do that without some offset to make up the difference," said Bob Elek, spokesman for Verizon Communications, the local carrier for Pinellas, Hillsborough and most of Pasco County.
So goes one of the biggest lobbying battles in Tallahassee this year, a $177-million fight between AT&T and Florida's three biggest local carriers, Verizon, Sprint and BellSouth.
The battle has been raging since 1995, when state lawmakers deregulated phone competition and effectively gave themselves the power to reduce so-called network access fees. Since then, AT&T's push for lowering the fees -- and returning the job of setting the fees to regulators -- has failed to persuade lawmakers, who worry they will be blamed for higher local phone bills.
This year, more than one-third of the Legislature are brand-new lawmakers, giving each side in the battle new opportunities to sway the outcome. AT&T alone has hired 18 lobbyists. Another 49 are working for the local carriers.
"It's who can educate them first," said Jason Duff, a Sprint spokesman.
It's also a matter of trust: Will lawmakers believe AT&T, which says the proposed legislation ensures lower long-distance charges for Floridians? Or will they side with local carriers that threaten higher local phone bills as a result?
A bill moving slowly through the Legislature would force Verizon and Sprint to lower their per-minute access fees, from 9.54 cents and 10.1 cents, respectively, to what BellSouth now charges -- 4.88 cents a minute. The Florida Public Service Commission says the reduction would cost Verizon and Sprint $177-million. BellSouth has joined the fight to prevent AT&T from winning even lower access fees in the future.
AT&T argues that Florida's local carriers charge unreasonably high access fees compared with those in other Southeastern states. BellSouth, for example, charges 4.88 cents per minute in Florida, versus 1.8 cents in Georgia.
The access fees for long-distance calls within Florida are also higher than the fee for out-of-state calls, which is set by the Federal Communications Commission at 1 cent per minute.
What AT&T doesn't mention, however, is that those states with lower access fees often compensate with higher rates for local phone service. For example, BellSouth customers in Georgia pay an average $17.45 per month for local phone service, versus $10.81 in Florida, said Spero Canton, a BellSouth spokesman.
If lawmakers reduce revenue from access fees, local carriers say, they will have to raise local phone rates to compensate, if they are to continue offering phone service to any Floridian who wants it.
The local carriers are also scaring lawmakers by saying that if the carriers collect fewer access fees, they will pay fewer taxes that go toward school construction. A House staff analysis released Friday estimated the bill would reduce state revenue from the gross receipts tax by $2-million annually. Because that money is bonded, that would translate into $25.6-million in lost school construction funds each year.
The bill's sponsor, state Rep. Mike Haridopolos, R-Melbourne, pulled the measure from its first House hearing last week because of questions about the effect on school funding, though he later shrugged off the threats.
"To me, that's the same argument as, we should encourage people to smoke because that will be more money for cancer research," Haridopolos said.
Yet beyond the arguments about helping consumers and making sure all Floridians have phone service, the bottom line is money. If the bill passes, Sprint and Verizon will lose money and they say customers ultimately will pay. If it doesn't, AT&T says customers will continue to pay too much for long-distance service.
In the end, the politicians simply may decide to stay out of it -- again. Gov. Jeb Bush said he wants to watch the issue "play out in the Legislature."
House Majority Leader Mike Fasano, R-New Port Richey, was willing to endorse only the part of the bill that would shift decisions about network access fees out of the Legislature and back to state regulators.
"The only opinion I have, and I think it's the opinion of many members, is that the Legislature should not be setting (phone) rates," Fasano said. "It can't be done in 60 days."
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