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Maine Lowers Telco Access Charges

Fortnightly Magazine - September 15 1997

Responding to directives from its Legislature, the Maine Public Utilities Commission has directed local-exchange telephone carriers to lower their per-minute, common-line charge by 20 percent, but without changing the access charge rate structure.

At the same time, it rejected a proposal by New England Telephone and Telegraph Co. to adjust the local carrier's recently approved price-cap plan to reflect a predicted erosion in revenues. The PUC found no evidence that a cut in access rates would depress local carrier revenues. It added that the reduction in access charges would not qualify as an exogenous cost eligible for a pass-through under the price-cap plan.

According to the commission, Maine's average interstate access rate was at least twice as high as the national average. Finding that the rate disparity disadvantages telecommunications consumers, state lawmakers had required the PUC to align carrier access rates with costs. The act (P.L. 1997 c. 259) was intended to foster economic development and competition in the state's telephone market.

The commission said it expected the state's larger long distance carriers immediately to pass along to customers their entire share of the reduction. Such a move should be expected, it said, "where effective competition exists." Re Amendment of Chapter 280, Provision of Competitive Tel. Services, Docket No. 96-526, June 10, 1997 (Me.P.U.C.).

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