TALLAHASSEE – LAWFUEL – Law News, Law Jobs – Attorney General Charlie Crist today sent a letter to Kevin J. Martin, Chairman of the Federal Communications Commission, urging the FCC to reject a plan that could cost local telephone customers nationwide more than $6.9 billion per year.
The so-called Missoula Plan could increase residential telephone charges by $3.50 per month, forcing consumers to absorb the costs that telephone carriers pay other carriers. Currently, customers and long distance carriers share the cost of local access charges. The Missoula Plan shifts the majority of the burden to local customers. The plan could cost Floridians more than $300 million per year.
“This plan would significantly harm Florida consumers while providing a windfall for a select group of phone companies,” said Crist. “The Missoula Plan, if implemented, would clearly place an unjustified increase on the citizens of the State of Florida without any increase in the level of service.”
The complete text of the letter follows below:
October 24, 2006
Mr. Kevin J. Martin
Federal Communications Committee
445 12th Street, SW
Washington, DC 20554
RE: Missoula Intercarrier Compensation Reform Plan
Dear Chairman Martin:
I write in opposition to the “Missoula Plan” that purports to comprehensively and equitably address inter-carrier compensation for telecommunications companies. Unfortunately, this very complicated, convoluted plan would, if implemented, significantly harm the consumers of my state while providing a windfall for a select group of carriers. Let me elaborate.
Under the Missoula Plan, consumers will be burdened with additional surcharges and higher rates so that the revenues of incumbent telecommunications companies like AT&T will be preserved, if not enhanced.
The customers that I am concerned about want reasonably priced dial tone and simple, affordable calling plans. These are the customers who want – and need – viable options in wireline telecommunications services.
With that said, these same customers, many of them on fixed incomes, also cannot tolerate further increases in their phone bills.
Under the Missoula Plan ICC payments between carriers are reduced $6 billion, and end-user local rates go up $6.9 billion. This consists of a
$4.7 billion increase in the subscriber line charge (“SLC”); a $1.5 billion increase in the universal service fund (“USF”); and three smaller increases.
The Missoula Plan presents to the Commission a plan that in effect, raises local rates in the form of huge increases in the subscriber line charge (“SLC”) (an increase of $4.7 billion) and in the Universal Services Fund (a 32% increase or $1.5 billion dollars).
Under the Plan the subscriber line charge for all of the major companies (most of the lines in the State of Florida) may increase to $10.00 in the fourth step of the Plan, and increase by the rate of inflation thereafter. This part of the increase could result in a $3.50 a month increased charge on each Florida local residential customers’ lines.
This increase could cost Florida consumers and the economy of the State of Florida over $25 million a month and over $300 million a year.
Although end users will have to absorb $6.9 billion in additional costs, the Missoula Plan does not require carriers to pass through any of the reductions in ICC rates as reductions in long distance rates. As a result, there is no guarantee or commitment that the $6.0 billion in ICC rates will find their way to customers.
Another great concern is that the Missoula Plan requires a substantial preemption of the authority of states over intrastate ICC rates. Although the Plan is cast as having optional elements, the Plan explicitly allows complete FCC preemption of authority over ICC rates, both interstate and intrastate. There is no basis in law for such an abrogation of power.
Florida has accomplished significant intrastate access reform.
However, these decreases in access charges have been accomplished by placing a heavy burden on residential customers by way of large rate increases. The Missoula Plan, if implemented, would clearly place an additional unjustified, and unconscionable increase on the citizens of the State of Florida.
In conclusion, I ask that you reject the Missoula Plan.