published Tuesday, July 31st, 2012

AT&T petitions Georgia for rate hike

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WHAT'S NEXT?

Two public meetings are scheduled for this area. The Georgia Public Service Commission will listen to public comment on AT&T's request for local telephone rate increases on August 13 at:

• Chickamauga Civic Center, 1817 Lee Clarkson Road, at 4 p.m.

• Catoosa County Courthouse, 875 LaFayette St., at 7 p.m.

PROPOSED RATE INCREASES

AT&T is requesting Georgia regulators require a pair of local phone companies to increase their rates. The proposed increases could come into effect by the end of the year:

Chickamauga Telephone Company

Residential - 42 percent increase

Business - 100 percent increase

Ringgold Telephone Company

Residential - 20 percent increase

Business - 37 percent increase

STATE SUBSIDIES

Over the past two years, Chickamauga Telephone and Ringgold Telephone have received some of the largest state-mandated telecom subsidies, funded by Georgia's telecom companies:

• Chickamauga Telephone Company - $1.63 million

• Ringgold Telephone Company - $4.07 million

Total paid to 15 other companies receiving subsidies - $23.25 million

Source: Georgia Public Service Commission

Some Northwest Georgia telephone customers could see their rates as much as double by the end of the year.

AT&T has requested Georgia regulators mandate a rate increase for Chickamauga Telephone Co. and Ringgold Telephone Co.

"It's totally unprecedented," said Phil Erli, executive vice president at Ringgold Telephone Co. "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 demanded rate increases from the companies after each was awarded millions of dollars in subsidies to stay profitable. In Northwest Georgia, a large chunk of that money has gone to repairing damage from the past two years' tornadoes, officials said.

The money comes from a Georgia fund paid for by a roughly 1.4 percent tax on the state's telecommunications companies' revenues, the largest of which is AT&T.

Companies such as Chickamauga Telephone and Ringgold Telephone are required to provide phone service to every customer who requests it because of a 1950 Georgia Legislature mandate. That mandate is easy to meet in densely populated areas such as Atlanta, officials said, but running phone lines for individuals in remote areas can be a costly proposition.

"I don't care if you decide you're going to go up one of the mountains and have a house, I still have to figure out how to get telephone service up to you," said Erli, whose company serves about 9,500 people.

Georgia telecoms have long since subsidized those companies to help keep them in the black.

AT&T spokeswoman Stephanie Walker said in an email that the rates charged by Chickamauga Telephone and Ringgold Telephone are lower than average for similar companies across the state.

In testimony recently filed with the state regulators, AT&T officials argued their customers are being forced to pay higher than necessary rates in order to keep rural customers' costs down.

But Ted Austin, a spokesman for Chickamauga Telephone, argued that a forced rate increase would cause a severe drop in customers, ultimately requiring his company to request even more money from the state fund.

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

Contact Carey O'Neil at coneil@timesfreepress.com or 423-757-6525. Follow him at twitter.com/careyoneil.

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