• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

Phone Companies Ask for Rate Increases in Florida

Posted on: Thursday, 28 August 2003, 06:00 CDT

Aug. 28--Your phone bill will be higher soon.

The three major phone companies that provide local service in Florida filed petitions late Wednesday afternoon, asking state utility regulators to approve basic rate increases as part of a new telecom law approved in May.

Rates in South Florida, where BellSouth is the major local phone service provider, could increase as much as $3.50 month over a two-year period. Basic residential rates now stand at about $11.70 a month.

The first increases could be seen as soon as late November. The second increase will kick in 12 months later so customers could feel the entire rate hike in about 13 months.

Besides basic rate increases, BellSouth is also proposing to increase various charges such as service connection fees. These charges could increase as much as 14 percent over the two-year period.

Mike Twomey, a Tallahassee-based consumer advocate, contends these are the largest phone rate increase ever faced by Florida consumers.

A law passed by the Florida Legislature requires the local phone companies to reduce the access fees that they charge long-distance companies such as AT&T and MCI for long-distance calls that terminate on their local networks.

The long-distance companies should pass on their savings to their customers. Theoretically, consumers who make lots of in-state toll calls, such as between Miami and Tampa, could see their long-distance bills decline.

But most consumers will pay higher rates for local phone service because the Legislature is allowing the phone companies to recover the lost access-fee revenue by raising basic residential rates and rates for some business customers.

The PSC will rule on the rate-increase request within 90 days. But critics contend that because of the new law, the PSC has little leeway to reject the increases.

The companies claim the new law should increase competition by removing the onerous access fees and by simplifying local phone rate structures.

The law also allows the companies to ask for rate increases of as much as 20 percent once the access fees they charge have to been brought down to about a penny per call from the current rate of about five cents per.

Initially, customers in rural areas could see the biggest increases because they now pay the lower, often-subsidized rates, Twomey said.

Sprint customers in North Florida could see the biggest rate hikes.

The company is asking for a $6.86 rate increase over two years.

For a Tallahassee consumer paying $10.89 for a residential phone line, that works out to a whopping 62.5 percent rate increase.

Sprint's single-line business customers could see rate increases of $6 over the next two years.

Verizon is proposing to raise its basic local rates by $2.25 in the first year and $2.30 in the second year.

Atlanta-based BellSouth is planning to simplify its rate structure for business customers into only three categories. The first-year increase would be no more than $1.75 a month. The second-year hike could range from zero to $2.70.

-----

To see more of The Miami Herald -- including its homes, jobs, cars and other classified listings -- or to subscribe to the newspaper, go to http://www.herald.com.

(c) 2003, The Miami Herald. Distributed by Knight Ridder/Tribune Business News.

BLS, T, MCWEQ, VZ,

More News in this Category