Home » AT&T »Chickamauga Telephone »Comcast/Xfinity »Competition »Consumer News »Public Policy & Gov't »Ringgold Telephone »Rural Broadband » Currently Reading:

AT&T and Georgia Cable Lobby Try to Force Independent Telcos to Raise Rates

Normally, telephone companies looking for a rate increase file a request themselves with state regulators to charge customers more for service. But in Georgia, AT&T, Comcast, and the state cable lobbying group are asking the Georgia Public Service Commission (GPSC) to order two rural phone companies to raise rates because they are not “charging enough” for phone service, when compared with cable telephone services and AT&T.

The Ringgold Telephone Company (RTC) and Chickamauga Telephone Company both argue the action is anti-competitive.

“By forcing [both companies] to increase rates, these competitors are seeking to make wireless and cable companies more attractive to consumers,” says the Don’t Raise My Rate website.

The independent phone companies are vehemently against raising their rates, and executives at both companies are outraged AT&T and the state’s cable companies are literally trying to force the GPSC to order rate increases on residential and business customers.

“It’s totally unprecedented,” Phil Erli, executive vice president at RTC told the Times Free Press.  “It is ludicrous and illogical.”

The Georgia Public Service Commission will decide on Oct. 16 whether the rate increases are justified, following local public hearings Aug. 13.

AT&T, which is driving the campaign to force customers to pay higher rates, says they are pressing the case because both companies unfairly charge substantially lower rates than AT&T does in Georgia.

Peter F. Martin, vice president for legislative and regulatory affairs in Georgia openly admits he wants both companies to charge essentially the same prices AT&T bills its customers in other areas of the state.

“The premise of my recommendation is that [the two phone companies] raise rates to roughly the same levels that are being charged by other local exchange carriers in surrounding areas,” Martin testified before the GPSC. “In other words, my recommendation is that [the two phone companies] increase their own end-user rates to market-based levels comparable to what other carriers are charging their subscribers.”

For customers of Chickamauga Telephone, that would amount to a 42% rate increase on residential customers, 100% on business customers. Customers of RTC would pay 20 percent more for residential service, 37% more for business service.

AT&T claims both companies, in deeply rural Georgia, are tapping into the state’s rural service fund and are receiving some of the largest state-mandated telecom subsidies, which are funded by all of Georgia’s phone companies and ratepayers. But both companies claim they have spent a large portion of those funds repairing damages to their rural networks incurred from a series of tornadoes which hit the area two years in a row.

The state cable lobbying group, the Cable Television Association of Georgia (CTAG) also has a dog in this fight. Comcast Cable, the dominant provider in Georgia, directly competes with both phone companies. They support AT&T’s demands that both phone companies hike their rates. It is not difficult to understand why:

Residential Service With Calling Features:

CHICKAMAUGA TEL TODAY

CHICKAMAUGA TEL

AT&T PROPOSED RATE

COMCAST’S CURRENT RATE

EPB

$31.75

$37.28

$34.95

$22.99

Business Service With Calling Features:

CHICKAMAUGA TEL TODAY

CHICKAMAUGA TEL

AT&T PROPOSED

COMCAST’S CURRENT RATE

EPB

$88.85

$113.30

$49.95

$35.99

(EPB, a publicly-owned provider from nearby Chattanooga, Tenn., also offers service in some areas.)

Chickamauga Telephone executives argue Georgia’s telephone deregulation policies are heavily weighted in favor of huge phone and cable companies and leave independent, rural phone companies with no new revenue opportunities. Chickamauga argues AT&T and the cable industry are using legislatively imposed “unfunded mandates” to win favor and additional profits for themselves and their shareholders, with no resulting savings for Georgia ratepayers, especially in rural areas.

If AT&T and cable operators have their way, both independent phone companies “would be priced out of the competitive market,” and “would soon find [themselves] out of business.”

“If you lived down here and you had a phone with us and your rates went up, how would you respond?” asked Ted Austin, a spokesman for Chickamauga Telephone. “Nobody wants their bills to go up, especially when it’s not something that Chickamauga Telephone is asking for.”

newest oldest most voted
Notify of
txpatriot
Guest
txpatriot

It would interesting to see how much subsidy each company in Georgia gets on a per-line basis.

It would not surprise me to see that rural companies get more than urban companies because rural costs are higher. And although the subsidy dollars are basically coming from taxpayers and therefore OUGHT to be public information, individial line costs per carrier are proprietary. So the actual per-line subsidy flow may never be known outside the regulators and recipients.

And that’s a shame.

Scott
Guest
Scott

Hmm so we should be allowing old mega-corporations with all their amassed wealth and political connections to lobby (bribe) government to protect their inefficient and noncompetitive businesses while also passing on the increased cost of services to taxpayers?

Can’t think of a better plan to plow more financial wealth towards too-big-to-fail businesses and the Wealthy 1%’er’s living large off stocks, increased taxes, and reduced services for the low and middle class.

txpatriot
Guest
txpatriot

Scott: one could argue that “protecting their inefficient and noncompetitive businesses while passing on the increased cost of services to taxpayers” is EXACTLY what these two rural telephone companies are doing. Isn’t that how a “subsidy” is defined?

Scott
Guest
Scott

Well first off any subsidy they are getting is in place to provide an incentive to provide telephone service in a rural area that otherwise wouldn’t have had it, same as what any telco gets for providing services there. The only claim I see if they used additional funds for repairs on lines from several years of Tornado damage. Seeing as the rural Telcos are less expensive than AT&T and Comcast, I’m not seeing how they can be considered inefficient or noncompetitive, it is AT&T after all that’s trying to make them more expensive and less able to compete. Or… Read more »

txpatriot
Guest
txpatriot

Scott; I agree that providing service to rural areas is more costly than providing service to urban areas. It seems we both agree on that. So how is it that these two rural telcos are able to price their services below that of the big carriers in Georgia? Are they really THAT much more efficient? If so, then why do they need a subsidy at all? While they may need some help with restoration expenses, that is a one-time expense, but the subsidy is something they get EVERY YEAR. Surely the hurricane damage they talk about isn’t something that happens… Read more »

txpatriot
Guest
txpatriot

Scott I just realized I can turn my own question around: if AT&T’s costs are so low, why are their own rates so high? And that is a fair question to ask.

If AT&T wants the Georgia Commission to investigate the local rates of these two small carriers, they better be prepared to explain why their own rates are so high.

Scott
Guest
Scott

Well I worked for a local Telco for several years in rural Alaska so I do have some experience in that area. It’s hard to say exactly since we don’t really know the what the situation is with the telco’s involved here, their subsidies, or level of service, and costs. Most like mine were also heavily unionized with high paying jobs including full benefits before privatization starting slowly wiping that out. In my experience, where my telco was the ILEC competing providers such as our local Cable Co, ISP’s, AT&T, etc leased our copper lines from us, obviously when you… Read more »

txpatriot
Guest
txpatriot

Well said.

Duffin
Guest
Duffin

Wait wait wait…are they serious? It’s anti-competitive to charge less than your competitors? They really have to just sit in their board rooms and decide to come up with the stupidest thing to say and choose that to go with. This angers me more than probably anything they’ve ever said.

txpatriot
Guest
txpatriot

Maybe you don’t have a local landline but those who do may be interested in knowing that they pay a higher state & federal surcharge in order to subsidize companies like these.

Duffin
Guest
Duffin

I do have a local landline and why would I care if I pay a “higher subsidy”? I still pay less for it than I did with Time Warner. AND my phone still works when there’s no power.

txpatriot
Guest
txpatriot

Duffin that’s great for you but how about everybody else? There aren’t many people I know who enjoy paying higher taxes and fees than they would otherwise have to pay. But that’s just me . . .

Duffin
Guest
Duffin

Right, I’m sure slightly higher subsidies really raise your taxes so very much. Do you have any numbers to prove that because utilities are subsidized, that somehow our taxes are significantly higher than they normally would be? Honestly, man…there are such bigger things that the government does that are more important to worry about. If you’re so worried about paying higher taxes, why not lobby to have our military budget sliced? Our taxes go to the military more than any other branch of the government.

txpatriot
Guest
txpatriot

No I don’t have numbers. If you’re OK subsidizing these rural telcos then more power to you. Just don’t assume everybody is OK with it.

Duffin
Guest
Duffin

If you have no proof to back up your claims, you really shouldn’t be making them. It just makes you look like a mouthpiece spouting off things you heard. You assume that for some reason, by rural utilities getting subsidies, that it somehow raises our taxes a lot. But, you have no reason to think that way as you admitted.

txpatriot
Guest
txpatriot

I never said the taxes are higher by “a lot”. I said they are higher than they otherwise would be, which stands to reason. And if given a choice, I assume most people would prefer to pay less in taxes, but again that’s just me. Some people obviously are happy to pay more.

Duffin
Guest
Duffin

If it’s not by a significant amount, who cares? Would you seriously be making a big deal if you had to pay $5 more in taxes every year? Or $15? If so, you’re way more frugal than “most people” you assume you know. Okay, your statement is technically correct. Most people would prefer to pay fewer taxes. But, that doesn’t mean they would prefer to pay more for their landline, either. I’m sure they would prefer both, paying fewer taxes and paying less for their landline. There are plenty of other, way more bloated government programs which are only useful… Read more »

txpatriot
Guest
txpatriot

I concede that the effect on any given Georgia ratepayer (or taxpayer) is minimal — but where does it stop? Using your logic, for just a few dollars more per citizen, those rural telco customers could get their services for free — wouldn’t that be great? The fact is, they are living off other Georgia customers and whether the hit per citizen is a few cents or several dollars isn’t the issue — subsidies by their nature means one person is footing the bill for another. Look I don’t oppose all subsidies necessarily. I recognize that the cost to serve… Read more »

rjdafoe
Guest
rjdafoe

I would like to know why you think it is to the extreme? AT&T needs to charge more becuase they are big and they expect a certain profit. Smaller companies can charge less becuase they do not have the overhead. In telecommunication, the smaller companies should be getting more. That is the way it should work.

txpatriot
Guest
txpatriot

Whether or not the local rates for these two companies is “extreme” will be up to the Georgia Commission to decide, not me.

rjdafoe
Guest
rjdafoe

Whatthey are not saying is that AT&T and those other companies ALSO get a cut of those subsidies. It can be argued that they should get LESS becuase they are so big and the small companies should get a boost to compete.

Duffin
Guest
Duffin

Oh, of course. Not to mention, those companies also use tax loopholes that the utilities don’t use to basically pay fewer taxes than they should be. So, they’re making more profit and paying fewer taxes.

Search This Site:

Contributions:

Recent Comments:

  • John: They get away with it because the government protects them and not the consumer. We all know that those at that business that are making millions in s...
  • AM MA: I hate Charter/Spectrum. They are incredibly dishonest. At times the government needs to step-in and deal harshly with such company's. I had internet ...
  • Barb: My spectrum just went up is it going up again?...
  • NJ Orlando: I did that as well last year. The problem is, they will only do that for you one time in the life of you being a customer. I am not paying $70 just fo...
  • Dave Lee: I am 59 years old and have never ever subscribed to any cable tv of any kind "ever" in my life. I live in a small town about 35 miles north of St. Lo...
  • Chrys: I will NEVER use or recommend Spectrum again! Shady and unethical practice of charging for services never received when terminating service. It is wr...
  • JAMES: I am not a customer. Not only do we get Spectrum ads in the mail every few days at our residence, today they mail us a Spectrum Business 5x6 card cove...
  • Henry: Vandon how much is Granite paying you to post these messages on everyone's comment? Granite only resales Frontiers services.......you should get a re...
  • Eddie: what a joke..... granite is just a CLEC..... you are only putting a middle man in between you and Frontier......for what???? the service is still Fron...
  • Dude: I'm pretty sure they're now selling the email addresses to third parties. I still have my legacy primary/admin email address assigned to me by Brighth...
  • Nathan Sampson: die CenturyLink just died I absolutely hate everything about your company you're a piece of garbage shut down your company sell everything burn it to ...
  • John Houston: People tend to be ignorant of anything to do with science which includes over-air transmission of TV signals. A tiny piece of junk made for $0.50 in ...

Your Account: