From the Office of State Senator Troy Fraser

For Immediate Release
February 10, 1999
Contact: William A. Scott - (512) 463-0124

Texas Consumers Would Benefit from Lower Long Distance Rates

AUSTIN -- State Senator Troy Fraser, R-Horseshoe Bay, filed legislation today that would save Texans $500 million a year in long distance telephone rates by reducing local access charges by nearly 60 percent.

Under the bill, access charges -- the amount major local phone companies charge Texans to complete their in-state long distance calls -- would be reduced by seven cents per minute. All local phone companies currently charge about 12 cents per minute in access rates to customers.

By addressing the access charge issue, the legislation represents a major step toward complete deregulation of the telephone market.

"Texans for too long have been paying higher long distance rates compared to other states because of the inflated access rates charged by local telephone companies," Fraser said. "It's time the for the Legislature to address this inequity, and it's time for the consumers to be given a fair shake. This bill does that."

The bill also freezes both local and business basic phone rates until September 1, 2005, or until the Texas Public Utility Commission determines that a local phone company has lost at least 30 percent of its market share in a geographic region and the region is declared open for competition.

The legislation, Senate Bill 467, directs the PUC to reduce the access rates to five cents a minute no later than December 15, 1999. Following the reduction, the PUC may not further reduce the access rate and the local phone companies may not increase the rates.

After the access charges are reduced, Fraser's bill would require long distance providers "to proportionately pass" the savings along to its residential and business customers.

The bill specifically grants the PUC the authority to assess administrative penalties against long distance providers if they do not pass the reduced access charge savings along to consumers for a two-year period.

"Anyone who makes a long distance phone call from their home or business would benefit under this bill," Fraser said.

In return for lower access rates, local phone companies would be granted pricing and packaging flexibility for basic retail network services -- such as caller ID, call waiting, and voice mail -- as long as they are consistent with federal regulations.

In addition, local phone companies would be granted the same pricing and packaging flexibility for any other regulated or unregulated service, or a service provided by an affiliate, such as a long distance or cable company. The effect would be to allow one company to market multiple services to its customers.