An exterior view of the Tennessee State Capitol building.NASHVILLE - Legislative committees are expected to vote this week on whether big telecommunications companies should get to keep an estimated $16 million they would otherwise pay to small telephone companies.
The bill, sponsored by the House and Senate Republican leaders but with a bipartisan mix of critics and supporters, would reduce the "access fees" now paid by the big companies from an average of 7 cents per minute now to 2 cents per minute.
That would be the same rate for intrastate access fees that is now paid in interstate fees set by the Federal Communications Commission.
The FCC does have a separate fee for subsidizing phone service in areas where there are relatively few customers to provide economies of scale in more densely populated areas. Tennessee instead has, in effect, built the subsidy into access fees.
Spokesmen for the small companies have told lawmakers that passage of the bill would mean a $16 million loss to them and a profit bonanza for the big firms.
The small companies say they would have to raise rates for their 256,000 customers by about $8 per month to cover the loss.
"It takes $16 million from small rural communities and gives it to the largest telecommunications companies in the world, just because they asked for it," said Nancy White, CEO of Lafayette, Tenn.-based North Central Telephone Cooperative.
The big companies say their customers have been unfairly subsidizing the small companies, which make plenty of money otherwise.
"Why should my rural subscribers subsidize other rural subscribers?" AT&T Tennessee President Gregg Morton declared at one point.
Though the small cooperatives and companies serve mostly rural areas, Morton said AT&T serves more such areas statewide.
The bill, HB574, has been the focus of hours of hearings in recent weeks by the Senate Commerce Committee and the House Commerce subcommittee. The Senate panel is scheduled to vote Wednesday; the House panel Tuesday.
Some legislators, meanwhile, are less than thrilled with taking sides in what they see as a business dispute that has provided employment for dozens of lobbyists - 27 on the big companies' side alone.
Rep. Bill Harmon, D-Dunlap, declared at one point that "my recommendation is that we lock them up in a room" until the warring sides agree on a compromise.
As introduced, the lower access fees would be phased in over the next four years. Rep. Richard Montgomery, R-Sevierville, suggested "a six- or seven-year deal" as a compromise. In other states, similar reductions have been phased in over periods of up to 10 years.
Sponsors of the bill are House Majority Leader Gerald McCormick, R-Chattanooga, and Senate Majority Leader Mark Norris, R-Collierville.
The big companies contend the measure is already a compromise, though small companies say they were left out of the decision-making process. The coalition of large companies does include some members that have traditionally opposed each other in legislative battles - notably including AT&T and cable TV companies. Carolyn Ridley of TW Telecom said the situation was "tantamount to dogs and cats sleeping together."
Perhaps the most unusual comment of the hearings, however, came from Mary Tom Walker, a Macon County school psychologist and North Central customer who opposed the bill.
"When I'm talking about North Central, I'm kind of like a mosquito in a nudist colony. I know what to do, but I don't know where to start," she said at the outset of her testimony.