Recommendations Can Save Telephone Customers Millions

Columbia, SC– South Carolina small business and residential telephone customers could save millions of dollars a year thanks to a Legislative Audit Council (LAC) review released yesterday. Last year, the SC Small Business Chamber of Commerce urged the State Senate to call for an audit of the state universal service fund (USF), a 2.9% surcharge on every telephone bill originally intended to subsidize telephone companies for providing costly service to rural areas.

The resulting LAC review recommended that the USF should be dramatically scaled back from its current $51 million level and be targeted only to supplement low-income subscribers and telephone companies documenting true need. The review was highly critical in its finding that the fund is not being used for its original purpose and that the “Public Service Commission has not implemented adequate controls over the management of the state USF.”

“The universal service fund has been a multi-million dollar piggy bank for BellSouth and other local telephone companies,” said Frank Knapp, Jr., president of the Small Business Chamber. “Small business and residential telephone customers have been forced to put money into this piggy bank and now we find out that we may have been ripped off and even helping these companies unfairly keep their competition out of the market.”

“We are strongly encouraging the General Assembly and the Office of Regulatory Staff to quickly implement the Legislative Audit Council’s recommendations,” said Knapp. “This report makes it quite clear that without immediate reform, small business and residential customers are paying up to $40 million or more a year in unnecessary fees to local telephone companies.

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