Basic Phone Costs to Increase
Posted on: Wednesday, 8 March 2006, 21:00 CST
By John Nolan, Dayton Daily News, Ohio
Mar. 8--State regulators on Tuesday approved new rules that will allow telephone companies to raise prices on their own for basic local exchange phone service and basic caller ID.
Under the plan approved by the Public Utilities Commission of Ohio, telephone companies that qualify for the "elective alternative regulation" will be allowed to raise prices by no more than $1.25 per year for basic local service and no more than 50 cents a year for basic caller ID service.
It allows the companies to raise prices without going back to the PUCO each time for approval.
The Ohio Consumers' Counsel office said that an earlier proposal could have allowed price increases of up to 20 percent a year for basic local phone service.
The consumer advocate, other consumer groups and local governments urged the PUCO to restrain the allowable increases.
To qualify under the new rules, phone companies must have received PUCO approval for an alternative regulation plan and must demonstrate that competition exists in their local phone markets.
The companies may then raise or lower prices for basic local service and basic caller ID after filing notice with the PUCO.
Low-income customers who receive a local phone rate discount through the Lifeline program are protected from basic service price increases under the new rules, consumer advocates said.
The Ohio General Assembly and Gov. Bob Taft last year directed the PUCO to establish the rules by this month to keep rates for basic phone service reasonable, but allow phone companies the pricing flexibility they said they need in an increasingly competitive telecommunications market.
Phone companies said cable companies and wireless providers already have pricing flexibility.
The monthly rate charged now by AT&T Inc., the former SBC Communications, for basic local phone service -- before taxes and surcharges -- is $14.25, down from $17.25 in 1985.
The PUCO has already approved similar pricing flexibility for optional telephone services and so-called "bundled" service packages.
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Source: Dayton Daily News
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