WisBusiness: PSC Decision Lifts Cap on Local Phone Service

By Brian E. Clark

MADISON – By a 2-0 vote Monday, the state’s Public Service Commission decided to begin phasing out the monthly rate cap on SBC’s basic local phone service.

SBC serves the majority of the state and is mainly based in urban and suburban areas. The PSC-controlled basic rate now stands at $8.20 a month for a line, plus 4 cents per call for the first 150 calls each month.

With Bert Garvin serving in Iraq as a major in the Army National Guard, fellow commissioners Mark Meyer and Dan Ebert agreed to limit the monthly price increase to $2.50 in the year after the change becomes effective and another $2.50 the second year.

The PSC will publish a written report next month which will lay out the details of Monday’s decision, including date it will start.

SBC spokesman Jeff Bentoff, who said he was pleased with the ruling, said his company has no plans for any immediate rate increase.

“We will review the decision, look at the market and see if any price adjustments are warranted,” he said. “Because we are in a highly competitive marketplace, we are constrained from making any big increases.”

Bentoff said the change had been more than a decade in the making.

“In 1994, the Legislature passed a law that these rules should be dropped when effective competition on could be shown,” he said, noting that business lines, caller ID and service packages were deregulated at the time.

“We have reached that point with basic service,” he said. We have 20 land-line competitors in our service area, plus cable and wireless providers.”

Ebert, who is the PSC chairman, said he believes competition is growing and that future advances in technology will bring increased competition and hold prices down.

Though he agreed to lift the cap, Meyer said he was not convinced about the competition in the marketplace.

“I feel like I have a jigsaw puzzle in front of me, but I am missing some of the pieces,” he said.

Charlie Higley, executive director of the Citizens Utility Board, said his consumer group is “deeply disappointed” by the PSC decision.

“Clearly, it will mean higher phone rates for SBC customers,” he said. “The $2.50 limit helps some, but the premise is wrong. This will not bring any improvement in service to basic customers, just higher costs.

“If there were really competition, there wouldn’t be an increase, but the best they could come up with was a temporary cap.

“This will allow the price to go up to the so-called competitive level. But there is no competition for this type of plain old vanilla type phone service.”

Higley said he believes the rate increase will hurt the poor most of all.