Phone fee changes hung up in Mo. Senate

Monday, May 4, 2009

JEFFERSON CITY, Mo. -- Think your telephone bill is too high? Your phone company might agree.

For every minute on many long-distance calls you make, your phone company is paying another phone company for your privilege to chat. Some telecommunications companies think they are being charged too much by their rivals.

The debate over telephone "access fees" has become hung up in the Missouri Legislature this year. Lawmakers representing the interests of their local phone service providers such as AT&T, CenturyTel and Embarq have been unable to agree on a plan to adjust the rates that companies charge each other.

"The whole issue is kind of an inside baseball issue. It's difficult for the average consumer to grasp how this would really impact their day-to-day life," said Rick Telthorst, president of the Missouri Telecommunications Industry Association.

"But in a general sense, yes, it would," he added. "Anything that creates pressure on prices or generates savings to certain [telephone] carriers could have consequences for customers -- good and bad consequences."

That's the main reason the bill ran into a Senate filibuster last week.

Some senators believe the legislation, which would force a gradual reduction in Missouri's intrastate phone access fees, could benefit customers of AT&T and wireless providers such as Verizon Communications Inc. and Sprint Nextel Corp. They fear it could cost the customers of other local phone service providers such as CenturyTel Inc. and Embarq Corp.

"The impact of it is my constituent's phone bill is going to be raised," said Sen. Delbert Scott, R-Lowry City, one of the filibustering senators whose western Missouri district is served partly by CenturyTel and Embarq.

Telephone access fees vary by company.

For example, AT&T charges 3 cents a minute to connect a Missouri caller served by another company to one of its AT&T Missouri customers, according to information from the Missouri Public Service Commission. CenturyTel and Embarq each charge 9 cents a minute, according to the PSC.

Some smaller phone companies charge even more. The PSC said the highest intrastate access rate is 21 cents a minute, levied by the Miller Telephone Co. to reach one of its 950 phone lines in rural southwest Missouri.

Missouri's access fees for in-state phone calls are among the highest in the nation. They also are considerably higher than the federally set rate of about one-half cent a minute charged by the biggest telephone companies for calls made from one state to another.

Legislation by Sen. Brad Lager, R-Savannah, would have required Missouri's predominant local phone service providers -- AT&T, CenturyTel, Embarq and Windstream Corp. -- to gradually lower their intrastate access charges over five years to the rates already in place for interstate calls.

But Lager's bill got hung up in an early April debate.

So last week, Sen. John Griesheimer, R-Washington, put forth an attempted compromise requiring a gradual five-year rate reduction that would have closed half the gap between Missouri's in-state access fees and the national interstate access charges.

But that version also got hung up, and senators again set aside the legislation without voting.

Griesheimer said about two-thirds of his eastern Missouri district is served by AT&T and the rest by smaller companies.

"For those of us in the urban areas, we're subsidizing a lot of these rural phone companies," he said. "It's not right."

One reason why the company-to-company access fees are high in rural Missouri is because the rates charged to customers for their basic local phone service generally are low.

The PSC originally set those fees at a time when all local telephone companies were monopolies, as a means of partially covering a company's costs without shifting them directly to customers.

But company-to-company access charges still indirectly affect customer service or bills.

If lawmakers were to force an access fee reduction, some phone companies would have fewer costs, potentially allowing them to reduce customer rates. But other phone companies would receive less revenue, potentially forcing them to raise customer rates, drop certain perks from bundled service packages or cut back on their infrastructure investment for high-speed Internet.

The fight between competing company and customer interests might be done for the current legislative session, which ends May 15. AT&T confirmed Friday that it is no longer urging lawmakers to bring up the legislation.

But if nothing passes this year, the access fee debate may very well be back in 2010.

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