Regarding the editorial “Phoning in reform” (Globe, Dec. 23), we agree that the legislature should take a good, hard look at intrastate telephone access rates. Resolving the issue, however, is not as easy as the editorial made it appear. The legislature should not rush to judgment.
First, let’s begin with an explanation of the issue. Each company providing voice service pays another company to “terminate” its originating call on another company’s network. There are two types of calls: “interstate” (a call from one state to another) and “intrastate” (a long-distant call within the state).
Interstate access rates are lower than intrastate access rates today and some companies are seeking a legislative fix to address the concern. It is really an industry issue and not a legislative one. However, if the legislature wants or is pressured to address access reform, here are some thoughts that need to be considered.
Many traditional telephone companies have made it clear they intend to couple reductions in intrastate access rates with a tele-welfare tax to create a bailout fund or a profit insurance fund to cover lost revenues from the reduction in intrastate access rates.
Where would this bailout or profit insurance money come from? Consumers, of course! Everyone with a telephone of any type, traditional, digital or wireless, would be hit with a monthly surcharge to bail out the local phone company. Sound unfair? Absolutely.
In addition, it’s important to understand why interstate access rates are much lower than intrastate rates. A few years ago, a joint board of regulators instituted a monthly surcharge on every voice service subscriber to subsidize the lower interstate rates, whether one used long-distance service or not.
Interstate rates are already subsidized via a tax/surcharge on all voice service subscribers! It would be grossly unfair to consumers to hit them with another tax/surcharge under the guise of lowering intrastate access rates.
Lastly, even if the legislature decided to order access reductions without creating a bailout fund, the end result would be higher basic telephone rates for those customers still tethered to old technology, many of them senior citizens.
Missouri’s cable telecommunications providers understand that this is a complicated issue, but the General Assembly needs all of the facts before hurrying into a decision.
Chuck Simino
President
Missouri Cable Telecommunications Association
