Calling long distance

After hearing for years about the high cost of making an in-state toll call, legislators last session did something about it, passing a bill that instructed the Public Utilities Commission to find a way to align the cost of in-state calls with out-of-state calls. A fine idea, but does anyone think it was the Legislature’s intention to increase telephone base rates by 30 percent?

That’s what a PUC-appointed committee recommended last week as a way to compensate Bell Atlantic for revenue losses it would suffer under a plan to lower access charges 70 percent for long-distance competitors. The increase in basic service charges would push the average fee up from $12 to $15.50 a month over the next three years. The fee would increase by 50 cents this year, an additional $1 by May 1998 and another $2 in May 1999.

When the PUC last winter considered the proposed merger between Nynex and Bell Atlantic Corp., consumer advocates, noting that the merger was expected to save the new corporation $850 million a year, requested that the PUC pass on $80 million of those savings to Maine ratepayers. The PUC declined to do that, agreeing with the Nynex argument that the merger would result in improved service and lower costs without a mandated rate reduction. The PUC committee has an opportunity to let some of those savings flow to customers. Instead, many customers would pay at least as much as before and people who make fewer in-state toll calls would pay more.

Equally frustrating is the fact that the recommendation seems to go against the nationwide movement toward increased competition among utilities. In other areas of telephone service (and, soon, electric service) customers have choices to make. They can decide which services they need and what they are willing to pay for. Under this proposal, customers would be saddled with the additional cost merely for owning a telephone. It is a regressive way to compensate a corporation that just recently promised reduced costs.

Before reporting to the Legislature in January, PUC commisioners need to take a hard look both at the conclusion of the committee and the numbers it used to produce the $3.50 increase. In rejecting the proposal last winter to pass on savings from the merger to customers, PUC Chairman Thomas Welch said the commission was unwilling to accept financial predictions about “two, three four years out.” Fair enough, but the commission should be equally suspect about reported losses during those same years, as Bell Atlantic predicts based on lowered access charges.

And lawmakers reviewing the PUC report should be equally interested in seeing what the legislation they passed last session has produced.