July 5, 2002
BellSouth Rate Increase

FOR IMMEDIATE RELEASE

CONSUMER ADVOCATE CHALLENGES BELLSOUTH RATE INCREASE

    COLUMBIA, SC  - Philip S. Porter, Consumer Advocate for the State of South Carolina, today asked the South Carolina Public Service Commission (PSC) to investigate BellSouth’s decision to raise rates on a wide variety of its non-basic services.

    In early June, BellSouth announced that it would use the authority granted to it under an "alternative regulation" plan to raise rates for certain residential and business services including operator assistance charges, verification and emergency interrupt services, and directory assistance. The increase in the directory assistance charge would be the second in the last nine months. Last October, BellSouth raised the rate from 45 cents to 95 cents per call. The newest change would raise the rate to $1.25 per call.

    BellSouth also proposed to decrease the number of directory assistance calls that are included free of charge as part of the basic telephone rate from three calls per month down to two calls per month. Porter believes that proposal is an indirect increase in the basic local rate, which BellSouth cannot increase until 2005 under the terms of a settlement agreement signed with the Consumer Advocate in 1999.

    BellSouth has also stated that it will increase rates for non-published and additional listings, call forwarding, three-way calling, call waiting, per use three-way calling, call return, per use call return, per use repeat dialing, per use busy connect, Caller ID Basic, Caller ID Deluxe, preferred call forwarding, call block, call tracing, and customized code restrictions.

    Changes in intraLATA long distance (long distance calls carried by BellSouth made within the callers long distance zone) include the elimination of time-of-day discounts and billing on full, not partial, minutes. Under the proposed rates these intraLATA long distance calls would be charged at 33 cents per minute, regardless of the time of day.

    In the Complaint filed today with the PSC, Porter has alleged that BellSouth’s price increases are an "abuse of market position" that allows the Commission to suspend the increases. Under a 1996 South Carolina law, local companies like BellSouth can choose to have flexibility to change prices, provided they have opened their network facilities to a competitor. That same law also allows for complaints to be filed against a company if its actions are an abuse of market position.

    Porter has alleged in his Complaint that the price increase request itself, demonstrates that there is a lack of a competitive alternative to control BellSouth’s pricing behavior. "In a truly competitive market, BellSouth would be unable to sustain these price increases without the loss of significant business", Porter said. He added that "the prices charged for many of these services is several times the cost of providing them, and there is no good reason to increase them now. Alternative regulation was intended to allow telephone companies to respond to competition, not to just raise rates any time they want to".

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