UPDATE: Missouri legislature approves changes to telephone fees

Wednesday, May 5, 2010 | 7:00 p.m. CDT

JEFFERSON CITY — Monthly bills could fall for some Missouri telephone customers but rise for others as a result of legislation given final approval on Wednesday.

The legislation now headed to Gov. Jay Nixon would gradually reduce the rates that telephone companies charge one another to connect callers from one region of Missouri with customers of a different phone company elsewhere in the state.

Those telephone access charges typically are built into the rates charged to customers. So people who make lots of long-distance calls — and pay for them by the minute — could see a reduction in their monthly bills. But charges for local phone service could rise for some customers.

The measure would apply only to the state's largest phone companies such as AT&T, CenturyLink and Windstream.

Missouri's access fees for in-state phone calls are among the highest in the nation. They also are considerably higher than the federally set rate of about one-half cent a minute charged by the biggest telephone companies for calls made from one state to another.

The legislation, which passed in the House on Wednesday and the Senate on Tuesday night, would apply to local telephone companies serving more 25,000 phone lines. They would be required to decrease their in-state access rates by 6 percent of the difference with their interstate access rates for each of the next three years.

The effect for phone companies could vary.

AT&T, for example, currently charges 3 cents a minute to connect a Missouri caller served by another company to one of its AT&T Missouri customers, according to information from the Missouri Public Service Commission. CenturyLink currently charges about 9 cents a minute, according to the PSC.

Under the legislation, CenturyLink expects that its local phone service unit will see a greater decline in revenues from collecting access fees than its long-distance unit will save from paying lower access fees, said Doug Galloway, the company's senior legislative affairs manager.

"As our access revenues go down, we'll have to try to either sell more services or have minimal increases for selected services," he said.

AT&T expects its savings from paying lower access fees to other companies to be greater than its reduced revenues from collecting lower access fees, said company spokesman Kerry Hibbs. He said AT&T has no plans to raise local phone rates but has not decided what to do with its savings.

"It's possible that some of the long-distance rates would come down, but it's too early to tell exactly what's going to happen," Hibbs said. He said AT&T also could use its savings to continue expanding its high-speed Internet network.

Missouri Public Counsel Lewis Mills, who represents the interests of residential consumers before state utility regulators, said he would have preferred that the legislation specifically require telephone companies to pass along savings to customers.

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