July 1, 2001
L.A. Loves a Loophole
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Sourth Carolina Tries LEC Price Caps
The South Carolina Public Service Commission (PSC) has adopted an alternative regulation plan for BellSouth Telecommunications, Inc, a local exchange carrier (LEC). The plan replaces an incentive regulation plan adopted by the PSC in 1991, but subsequently reversed by the state supreme court. See, South Carolina Cable Television Association v. South Carolina Pub. Service Commission et al., 437 S.E.2d 38, 150 PUR4th 216 (S.C. 1993).
The PSC found the LEC subject to competition
in numerous markets, including intraLATA long
distance and custom-calling services. Thus, the approved plan caps basic local exchange as well rates for a three-year period. After three years, rate increases are limited by inflation as offset by a
productivity factor of 2.1 percent, regardless of revenue losses or increased costs. Switched-access service rates are similarly capped, but for a three-year period. The plan permits the carrier to alter prices for competitive services as long as increases do not exceed 20 percent during any 12-month period, but requires prices for all services to remain above long-run incremental costs, except where required to meet universal service goals or upon specific approval by the PSC. Re BellSouth Telecommunications, Inc., Docket No. 95-720-C, Order No. 96-19, Jan. 30, 1996 (S.C.P.S.C.).
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