The phone
deal: What's in it for you?
By MIKE TWOMEY
The damage that the
industry-drafted telecommunications bill before the Legislature will
do to your family budget can be prevented only if Floridians tell
lawmakers to reject it.
This controversial legislation was introduced 37 days after
the Legislature's filing deadline by amending its 42-pages onto
another single-page bill in the Senate. It wasn't filed as a bill by
March 4, like all other legislation, so that residents might have
had advance warning of what the local telecommunications industry
and its legislative friends were planning for consumers.
The three largest local companies will lose $362 million annually
from reducing access fees paid by long-distance phone companies --
this is called ''rebalancing.'' BellSouth's loss is projected at
$135 million. The proposed new law will allow BellSouth to increase
your local rates to make up the difference.
Current law limits increases in your local phone rate to
inflation, minus 1 percent. Inflation was 1.79 percent last year, so
BellSouth and the state's other local providers could legally raise
your local rate about one-eighth of 1 percent, or nine cents, if you
pay the top BellSouth rate of $11.04. Thus your new rate would be
$11.13 under current law. This would change dramatically under the
proposed bill.
BellSouth says that local rates may go up by $3.50 per month,
which is a 32-percent increase if your local bill is $11.04. That's
right: the Legislature is considering allowing a 32-percent
increase in annual phone rates as compared to the less than 1
percent allowed now. So, under the proposed legislation, your local
phone-bill rate could jump to $14.54 in the next two years.
The American Association of Retired Persons, Florida Legal
Services and Florida Utility Watch have concluded that the bill's
language proposing to return rate regulation to the Public Service
Commission and re moving it from the Legislature would make the PSC
nothing more than a rubber stamp for future rate increases.
Also, there is a hidden trigger in the bill. After rebalancing is
completed, BellSouth could raise your local rate by 20 percent per
year, every year, without PSC permission. In three years, your local
phone-bill rate thus would be up another $2.91, to $17.45.
Under this legislation, at the beginning of year four, your bill
could be hiked up to $20.94 a month. The beginning of the fifth year
could see your bill at $25.13, or 127 percent of your current rate.
You will then be paying $169.08 a year more than can legally be
charged now. These increases were part of a similar bill that Gov.
Jeb Bush vetoed last year.
Even the bill's proposed intent to expand service for Lifeline
customers, the needy who are guaranteed reasonable phone rates, is
misleading. What it would do is make Lifeline customers subject to
all the rate increases after two years, causing many of them to lose
service. Improvements to Lifeline should be made independent of
unsupportable rate increases.
The bill also includes a provision that appears designed to limit
the ability of local government to continue regulating cable-TV
companies, which would allow already erratic cable service to
decline even more. And it essentially eliminates current
customer-service standards.
Tell your legislators that you will not tolerate their increasing
your rates by adopting this legislation. You can contact them
through a link at www.floridautilitywatch.com
Mike Twomey, a former assistant Florida attorney general, is
president of Florida Utility Watch, a nonpartisan, nonprofit
organization dedicated to protecting consumers from regulated
utility excesses.