THE PUBLIC MIND: BELL MATTER SHOULD BE HANDLED BY PSC, NOT LEGISLATURE

To the Editor:

~Recently a column I wrote was printed in this paper. The article was concerning legislation in Jefferson City in which Southwestern Bell is trying to exclude approximately $42 million of their excessive earnings out of the rate making process by no longer counting Yellow Page advertising profits. There are two sides to the issue and I was expecting someone to respond and bring forth their views. I was not expecting someone to state I didn't have my facts straight and then proceed not to dispute the facts I brou~ght forth in the article. The response article implied I was trying to get "around the facts" by stating everyone's phone bill was going up automatically. Yet the article headline read "Proposed bill has potential of hiking phone rates or wiping out refunds." This is still my opinion. Let me state some simple facts:

FACT: Southwestern Bell is the provider of monopoly services (i.e., no real competition). Because Bell is a monopoly, they are regulated by the Public Service Commission. Southwestern Bell is guaranteed a rate of return on their regulated investments. Simply stated, if they don't reach their authorized annual rate of return (currently they are earning about 15%, and that seems very high when one considers today's interest rates) they can apply to raise rates. If they surpass their rate of return they are supposed to either cut rates or issue refunds.

FACT: Southwestern Bell experienced excessive earnings of approximately $150 million in 1992 and should cut basic phone rates by 9% according to the staff at the Public Service Commission.

FACT: If the Yellow Pages Bill is passed about $42 million of their over-earnings will not be included in the rate-making process.

FACT: The Missouri Public Service Commission strongly opposes this bill.

FACT: Southwestern Bell has been unsuccessful in getting Yellow Page advertising deregulated through their regulatory body, the Public Service Commission, and are now trying to get it through the less informed state legislature, where they have considerable influence.

FACT: According to the Public Service Commission, all 50 states currently use Yellow Page profits in the regulatory process.

FACT: When the Yellow Pages operation was set up as a separate subsidiary, SWB promised the profits would still be used in the rate-making process but now they want to change the rules.

OPINION: This issue should be in front of the Missouri Public Service Commission, not the State Legislature. This bill should not be passed. I believe this bill will eventually impact the rates we pay (whether it is in the form of increases or the absence of deserving rate reductions/refunds). Call or write your state legislators and tell them you are against this bill. The bill is HB302 in the House and SB173 in the Senate.

~Don Zimmer

Cape Girardeau