Bell Atlantic rates may rise> If approved, basic service would increase by $3.50 over 3 years

BANGOR — Maine’s largest telephone service provider may be permitted to jack up its basic service rates by $3.50 over the next three years.

Bell Atlantic’s 500,000 residential customers now pay about $12 a month for basic service. The 150,000 business customers pay about $32 per month.

A state-appointed committee is recommending this price increase, but at least three members of the committee have already objected to the plan.

The proposal to allow Bell Atlantic to increase its basic service charge is one part of a report submitted to the Maine Public Utility Commission that is being made public on Friday.

The proposed rate increase is to compensate for a state-mandated 70 percent reduction in long-distance access charges. Bell Atlantic charges access fees that average 24 cents a minute to other telephone companies using its lines to provide long distance service in the state.

The 70 percent reduction, which will bring down access fees to these companies to about 5 cents a minute, was signed into law in May and must be phased in by 1999. The committee is recommending that Bell Atlantic be allowed to make up for the loss of access-fee revenues by increasing its basic service charges in three steps. A 50-cent rate increase would become effective this year, a $1 increase in May 1998, and a $2 increase for basic services in May 1999.

The proposed increases, according to a dissenting committee member, would generate as much as $55 million for Bell Atlantic over the next three years. The committee members who oppose the rate increase say it falls too heavily on the consumer. They also say there has not been enough public input.

“The thing that I’m bothered by the most is who will pay the rate — it is regressive,” says Richard Rhames, a co-chair of Maine People’s Alliance, a consumer group that was one of 24 groups on the committee.

Rhames said he disagreed with making up for the lost revenues by shifting the costs to the customers. “What this whole thing has been about is basically a secret process looking at which revenue streams will be tapped into to make up for the loss of access-fee revenues. I’m afraid the majority of the population will be subsidizing business interests.”

The committee’s report will be made public on Friday and will be subject to the approval of the PUC, which will invite public comment on the matter. Typically, the PUC would hold deliberation hearings to decide on the Bell Atlantic case — a longer and more expensive process — but decided to experiment with a committee representing all of the parties with a stake in the outcome. Bell Atlantic was represented along with other telecommunications companies, such as AT&T, MCI, and Sprint, which pay access fees to Bell Atlantic.

Other committee members who joined in the criticism of the report include state Sen. Sharon A. Treat, D-Gardiner, and a Portland lawyer who represented the American Association of Retired Persons, Howard Reben.

“I am concerned with the lack of public input in a proceeding that may end up in a rate increase,” said Treat in a prepared statement. “Even those of us who participated as stakeholders were kept in the dark about key meetings and negotiations.”

Both officials from Bell Atlantic and the PUC expressed exasperation that some of committee members were characterizing the negotiations as secretive.

“The ground rules were followed,” said PUC spokesman Phil Lindley.

Karen Sistrunk, the regulatory attorney from Sprint, said that she criticized the committee in the beginning, but that the process opened up after the committee got working in June.

None of the committee members contacted, however, would comment on the recommendation that Bell Atlantic be allowed to raise its basic rates. They cited a confidentiality agreement that they were all supposed to sign. Maine People’s Alliance did not sign the confidentiality agreement.

Dan Breton, a spokesman for Bell Atlantic, said: “The significant thing for people is that they want lower long-distance rates. The big argument comes out when you look at compensating for those lower rates. There’s got to be a balance here.”

Breton cited the common complaint that it costs more to make long-distance calls within the state of Maine than to call other states. High long-distance rates were put in place by the state years ago to keep basic service charges artificially low.

“Our company is not going to be made whole by this recommendation,” Breton said. “It is not a full cost agreement,” that compensates Bell Atlantic for all of the revenue lost from the access fee reduction.