Bill would hurt phone customers, official says

by Jerry Bellune,  Lexington County Chronicle

Published May 13, 2004

A state official has criticized a proposed law to restrict consumers’ rights and expand phone companies’ freedom to raise rates.

Acting state consumer advocate Elliott Elam said the bill would strip the state Public Service Commission of authority to regulate “bundled” services from BellSouth.
The PSC would have no power to hear complaints of poor service or unfair practices in bundled services as they can now, Elam said.

“The only resort a customer or competitor would have would be to go to federal court,” he said.
BellSouth officials argue that the bill gives consumers more choices and better prices.

“We just want to compete without our hands tied behind our back,” said Hank Fisher, BellSouth’s executive director in the state.

BellSouth and other former phone company monopolies have been required since 1996 to make their lines available to competitors.

By 2003, their competitors had 8% of South Carolina’s market for local service, the Federal Communications Commission reported.

The House has passed the bill but the Senate has not.
The bill would let rural telephone companies switch to less stringent regulation if they compete with two wireless phone companies.

Under current law, rural companies must return earnings over a set amount to their customers. The bill would allow them to use price caps instead of an established rate of return to prevent price-gouging.

“It will stifle competition in rural areas if you allow rural companies to take excess earnings and plow them back into other businesses,” Elam said.
Frank Knapp, president of the South Carolina Small Business Chamber of Commerce, agrees. He said rural phone companies are monopolies and ought to be regulated as monopolies.
The PSC wants lawmakers to add more consumer protection to the bill, said Douglas Pratt, a PSC engineer.

“This will have a potential impact on virtually every telephone consumer in South Carolina, other than the very largest of businesses,” Pratt said.

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