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0 Comments | La Crosse Tribune, Oct 23, 2004 | by Cahalan, Steve

The Public Service Commission of Wisconsin is accepting written public comments until Nov. 5 on CenturyTel's proposed alternative regulation plan, which the PSC says would give the phone company the flexibility to raise basic residential local rates up to 10 percent each year.

The proposed four-year plan would replace a fiveyear alternative regulation plan that expires in December. The current plan, which was the company's first alternative regulation plan, allowed up to a 9 percent rate increase each year.

CenturyTel officials say the proposed plan would allow the company to raise basic rates by up to 5 percent per year, with an additional 5 percent increase possible if offset by reductions in other rates.

"We expect that by early next year, the commission will make a decision in this case," PSC spokeswoman Linda Barth said Friday. The PSC said that in its application, CenturyTel said the proposed plan will encourage competition, expand infrastructure and improve service quality.

Under the traditional system of regulations, any rate increase requires a detailed review of earnings and other rates by the PSC.

"We've seen alternative regulation plans proposed by CenturyTel in the past and haven't thought much of them," said Charlie Higley, executive director of the Citizens Utility Board consumer watchdog group in Wisconsin. "They've essentially removed any authority by the Public Service Commission to regulate rates. (The plans) are very anti-consumer."

Consumers benefit from alternative regulation plans, said John Schafer, CenturyTel manager of government relations.

"The real point of alternative regulation is to be more flexible in response to the increasing competition in the marketplace" such as CenturyTel faces from wireless telephone companies and voice-overInternet, also known as VoIP, Schafer said. "Traditional regulation was essentially a cost-plus kind of system," he said. "The risk customers take under the old system is if the company loses customers to competition, the remaining customers end up paying higher rates."

CenturyTel doesn't necessarily raise rates as much as the alternative regulation plans allow, Schafer said. "This year, for example, we had the option to raise residential and business rates this coming Dec. 1. But we've opted not to do that because of competition," he said.

CenturyTel recently enclosed an informational flier about its proposal in customers' bills. The flier said the current five-year plan provided for rebalancing of rates to more closely reflect costs, PSC monitoring of service quality, opening markets to competition, investment in the telecommunications infrastructure and increased pricing freedom.

Under the current plan, the flier said, basic residential rates have increased from $11.30 per month before December 1999 to $15.98 now. That is an increase of 41 percent. (Low-income people may qualify for a special lower rate.)

Part of the past increases was offset by reductions made to access charges long-distance companies pay to CenturyTel, the flier said. Long-distance companies have passed along at least some of those savings to their customers, Schafer said.

CenturyTel's flier said the company invested more than $31.8 million from 2000 through 2003, or $523 for each access line currently served. It said one result is that 94 percent of customers have access to high-speed Internet service, and many other improvements have been made.