PSC considers adding universal fees to S.C. mobile phone bills – The State

Is making a call on your mobile phone the same as calling on a traditional landline in South Carolina?

If the state Public Service Commission says it is, you likely will face a higher monthly mobile phone bill in the future.

Representatives of the burgeoning wireless phone industry and the shrinking landline phone business argued before the PSC Tuesday about whether they compete for the same customers.

At issue is the universal service fund, which is mandated by federal law to increase access to affordable phone service in rural areas where it’s costly to extend and maintain lines. A shrinking pool of landline customers pay a fee for the fund but the swelling tide of wireless customers currently do not pay.

State law provides that phone services in competition with landline carriers may be subject to the universal service fund fee. Landline phone companies emphatically say mobile phone service directly competes with the landline phone service they provide. But the wireless industry contends the two services are not in competition.

The public service commission took five hours of testimony on the issue Tuesday, hearing and reading sworn statements from various members of the state’s landline industry, including the South Carolina Telephone Coalition, which filed the case with the PSC.

The commission also took sworn statements from seven members of the public who opposed adding the fee to mobile phone users.

Katie Stoddard of Greenwood, who runs a fundraising consulting firm, said she came to the hearing because most of her business is done by mobile phone. “I just wanted to come and state my opposition to having to pay an extra fee or tax for landline use, which I think is becoming more and more antiquated.”

In General Assembly committee meetings earlier this year, mobile phone carriers estimated the 4.5 million mobile phone users in the state could see their monthly bills rise by between 1 percent to 2 percent if the universal service fund is applied to their service.

Opponents have branded the fee as a major subsidy for the landline companies. Landline users pay a 2.65 percent monthly tax on their phone bills. That fee would shrink to about 1.6 percent of their bills should cell phone users be brought into the pool, experts have said.

The commission will continue taking testimony Wednesday, when witnesses for the wireless industry are scheduled to testify.

Landline provider Windstream South Carolina has about 40,000 landline customers in the state, attorney Burnie Maybank said, and those customers pay the universal service fee.

“Our position is that the wireless companies should contribute to the universal service fund exactly the way we contribute today,” Maybank said. The net effect of the change would be that wireless would start paying in, while landline customers would see their payments roughly cut in half.

“It’s actually revenue neutral. It’s just who’s paying it,” Maybank said. Is there competition? “Absolutely. No question about that. We’re losing lines every year.”

Figures shown to commissioners indicate landline customers have dropped by nearly 50 percent since 2003 while the mobile phone customer base in South Carolina has grown by nearly 50 percent.

“It won’t raise any more money – it just spreads it out more fairly,” said attorney Frank R. Ellerbe III, who represented the South Carolina Cable Television Association, which is comprised of Comcast, Time Warner, Atlantic Broadband and Charter Communications and supports adding the fee to wireless customers.

Susan Miller, regulatory and legislative manager for Frontier Communications of the Carolinas, said her company believes wireless service competes with landline companies.

She pointed to data that indicate “wireless service is readily available throughout the state, including Frontier service territories, and that up to 43 percent of South Carolina households do not have wire line service – they rely solely on wireless service.”

Roddie Burris: 803-771-8398

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