Battle brewing over access to local lines

0 Comments | La Crosse Tribune, May 15, 2001 | by Sheehan, Tom

MADISON - Some local phone service providers in Wisconsin are bracing for battle against long distance carriers who want cheaper access to local phone lines.

Wisconsin CALLS (Coalition for Affordable Local and Long Distance Service), a new lobbying group with clients such as AT&T, will push for legislation to limit access service rates, said spokesman Curt Pawlisch.

No formal legislation has been introduced, but a draft copy of a bill is being circulated at the Capitol and opponents fear the proposal could find its way into the proposed state budget.

As drafted, the change would mean lower prices for long distance customers, Pawlisch said. But local service providers argue the savings would never reach the customer, and local service rates would skyrocket to make up an estimated $30 million to $50 million drop in revenue.

The battle pits the long distance carriers against local telephone service providers CenturyTel and TDS Telecom. CenturyTel serves about a half million customers in Wisconsin, including many in the La Crosse area and north and western Wisconsin. TDS Telecom operates Madison's TDS Metrocom and 17 other local phone companies in the state with more than 100,000 access lines. Some smaller companies wouldn't be affected, nor would Ameritech or Verizon, which already have controlled access service rates.

The latest proposal would prevent local service providers from charging long distance carriers more than they charge any other company for access to their lines or limit the amount to the actual cost of providing service, according to a Legislative Reference Bureau analysis of the proposal.

Local service providers would likely have to raise rates charged for local service by as much as 50 percent to make up the revenue, said CenturyTel spokesman Lorenzo Cruz. Access service rates were initiated to help keep the cost of local service down, Cruz added.

"If you substantially lower access charges, that means local rates will go up," said Cruz.

Some local phone service providers are not "mom and pop" operations, however, Pawlisch said. In fact, CenturyTel and TDS Telecom control more than a half million local lines in Wisconsin, he said.

Pawlisch said the legislation would require long distance companies to pass the savings on to customers and that local service providers would be prohibited from increasing rates to make up the lost revenue.

Long distance companies currently pay the local telephone companies directly for access, but Cruz said he is worried lawmakers could be seduced into diverting the fees to offset a state budget deficit.

"It's perceived as this money that's just out there. But that's an important part of the revenue stream for local phone companies," Cruz said.

Cruz suggested long distance companies wouldn't pass the savings on to customers because prices are often set nationally.

Some trade associations and businesses groups appear split on the issue.

"The cost of having local telephone service go up is just something we can't afford," said Brandon Scholz, president of the Wisconsin Grocers Association.