Telephone Deregulation Bill Passes Senate

By Frank Knapp Jr.

Columbia, SC– The South Carolina Senate today passed a telephone deregulation bill that could bring increased basic line rates to mostly rural small businesses. The SC Small Business Chamber of Commerce supported three amendments offered by Senator Jake Knotts that would have protected rural small businesses from unjustified rate increases, promoted healthy competition in the telephone industry and questioned the need for telephone company subsidies by the consumer. Two of the amendments failed and one was withdrawn.

“It was matter of being out-manned and out-moneyed by big telephone business interests,” said Frank Knapp, Jr., president of the Small Business Chamber. “However, we were able to create enough debate on the Senate floor about our concerns so that we did have some victories for small businesses.”

“We were not able to convince the Senate that cell phones are not real competition for business office telephone services,” said Knapp. The Senate voted to consider cell phone availability in a rural area as justification for freeing the landline telephone company from strict PSC price regulation. “The bill would have allowed 20 local phone companies to raise their business basic line rate to the statewide average of $36.95 without PSC approval,” said Knapp. “that would be an increase for the affected small businesses of in between 19% and 115% depending on the company’s present rate.”

“However, Senator Linda Short offered an amendment to lower the upper limit on the potential rate increase to a rate that is equal to “two times the statewide average local residential rate.” This effectively dropped the ceiling for the possible rate increase to only $28.50.

“This is a major improvement in the bill for small businesses,” said Knapp. “Of the 20 local phone companies that may want to seek alternative regulation under this bill, now 7 could not raise their basic business line rates at all, 8 could only raise their rates by 16% or less, 4 could raise their rates between 22% and 33%, and one could only raise rates by 67%.”

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