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Alabama Begins LEC Rate REbalancing

Fortnightly Magazine - September 1 1996

The Alabama Public Service Commission (PSC) has implemented a rate rebalancing plan to coordinate the pricing of services provided by telecommunications local exchange carriers (LECs) with recent efforts to open the local market to competition. According to the PSC, existing LECs that support underpriced local service with excessive access charges are at a significant disadvantage when they enter a competitive, price-regulated environment. Failing to address the disparity between access charges and basic service prices could jeopardize an established LEC's ability to serve as the carrier of last resort as well as its ability to survive. Hence, the PSC's approved plan requires all carriers to adjust local rates to approach a benchmark based on a midpriced residential-rate offering by Bell South, a telecommunications LEC. The plan also includes procedures designed to ensure that interexchange carriers operating in the state pass along scheduled reductions in LEC access charges to intrastate toll customers. Re South Central Bell Telephone Co. et al., Docket Nos. 24499 et al., May 23, 1996 (Ala.P.S.C.)

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