Telephone Regulations

The SC Small Business Chamber of Commerce (SCSBCC) has consistently and successfully fought on behalf of small businesses regarding telephone service charges.

In 2000, BellSouth asked the Public Service Commission (PSC) for permission to collect $340 million in surcharge fees (Universal Service Fund) on telephones that would have cost up to $13 per line per month. This fund was supposed to subsidize telephone companies for service in rural areas to keep it affordable. The Small Business Chamber argued that at most this fee should amount to only $36 million a year. The PSC approved the fee at $36-$40 million.

In 2004, BellSouth and local phone companies supported legislation that would allow rural phone companies to increase their basic line rates to the statewide average without justifying the rate to the PSC. The companies argued that increased competition for rural phone service made PSC approval of rate increases unnecessary. The Small Business Chamber fought the effort in the state Senate and was successful in having the potential rate increase to small businesses reduced. Also during this 2004 Senate debate, the Small Business Chamber was successful in having the legislature request a formal review of the universal service fund to determine if it was still needed.

The Legislative Audit Council issued its review of the Universal Service Fund in February of 2005 and recommended that the fund be drastically cut back, its purpose re-directed to helping low-income families afford basic telephone service and strict controls put into place to create real accountability of the funds used by the telephone companies. The Office of Regulatory Staff has implemented the administrative recommendations of this review. The Legislature did not pass the recommended reforms that could have saved residential and business consumers up to $40 million or more annually.



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