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http://www.miami.com/mld/miamiherald/business/5606292.htm

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Posted on Fri, Apr. 11, 2003 story:PUB_DESC
Panel says phone bills may go up

bgarcia@herald.com

The cost of basic phone service in South Florida may jump $3 to $3.50 a month over the next two to four years if a proposed telecom bill passes in Tallahassee, according to an analysis by a House panel.

The analysis by the House telecommunications subcommittee, which is to take up the legislation again next week, also notes that rates could increase as much as 20 percent per year after the initial two- to four-year period.

The bill also could mean an elimination of customer-service standards and create smaller calling zones -- and that could translate into more long-distance fees for consumers.

Representatives from BellSouth, AT&T and the Florida Cable Telecommunications Association maintain that the telecom bill would give the Florida Public Service Commission the authority to prohibit any rate increases if certain conditions aren't met.

Rate increases, they say, aren't automatic.

The bill, a revised version of legislation that was passed last year but that got a strongly worded veto from Gov. Jeb Bush, requires the local phone companies to lower network access fees to about a penny.

These fees, which range from about five cents per call to just over 10 cents, are charged to long-distance companies for intrastate calls that terminate in a local phone company's network.

The long-distance companies, such as AT&T and now BellSouth, would have to pass on their savings to their residential and business customers.

The analysis points out that customers who make lots of intrastate long-distance calls would benefit.

But it doesn't note the flip side: Those who make few long-distance calls get no savings. Those who just buy basic service could pay much more for local phone service.

The local phone companies would be allowed to raise basic local phone rates to make up for the lost revenue.

Those companies claim that these rates are artificially low in Florida because they're subsidized by revenue from the network access fees.

When asked if her company was likely to petition the PSC to raise its basic service rates to make up for lost revenue because it had to lower access under this proposed legislation, BellSouth spokeswoman Marta Casas-Celaya said: ``We'll cross that bridge when we get to it. This is an industrywide bill, and it sets up a framework for the PSC to address industrywide issues.''

Mike Twomey, who runs Florida Utility Watch, a Tallahassee-based consumer watchdog group, contends that the requirements the phone companies must meet are almost ''a given'' because they assume that reducing the access fee will increase competition in local phone service and benefit consumers.

The way the bill is written, he added, the PSC's authority is nothing more than ''a rubber stamp'' on these rate increases.

Kevin Bloom, a PSC spokesman, said the PSC believes it would have authority over rate increases. But he added that the bill was ``still a work in progress.''

The analysis notes that, once the local phone companies have lowered the access rates, they can ask the PSC to hold them to the same service-quality requirements now used for competing firms.

That would mean no requirements: The PSC hasn't regulated the rival firms, fearing that regulation might stymie competition.

This complex bill didn't begin to make waves in Tallahassee until last week, about midway through the Legislature's six-week session. Yet a shell bill -- with no real text -- had been filed in the Senate as a placeholder. In the House, it's still being considered as a proposed committee bill.

However, a coalition of phone and cable companies -- not the norm in Tallahassee -- began drafting the bill late last year.

''It takes a long time to get competitors to sit down and get some consensus,'' said Charles Dudley, who represents the cable association.

The deadline for filing bills in both houses was March 4. Consumer advocates who oppose this proposed bill are upset that the House and Senate versions of the bill haven't been readily available for review.

Senators on a subcommittee that voted on the bill Tuesday got printed copies late Monday, and the Senate version isn't available online.

The House staff analysis wasn't made available to the public before or during a House subcommittee hearing on the bill Wednesday morning.

Sen. Anna Cowin, R-Leesburg, who cast the one opposing vote on the Senate subcommittee Tuesday, said she felt that this legislation would benefit only the big phone companies.

''My job as a senator is to represent my people and vote on legislation that I can stomach,'' Cowin said. ``This one doesn't pass the stomach test.''