Chickamauga Telephone Co., which provides its services through AT&T, was recently informed by the larger company that a base rate hike is imminent. Chickamauga Telephone Co., taking issue with the increase, is bringing the case before the Public Service Commission and before public opinion.
“AT&T and the Cable Television Association of Georgia, CTAG, have requested that AT&T raise — or force Chickamauga Telephone to raise — our rates,” said Ted Austin of Chickamauga Telephone Co.
Austin spoke at the Chickamauga city council meeting Monday evening, Aug. 6. to inform the council of the upcoming meeting and to ask for them to join Chickamauga Telephone Co.’s stance against the proposed increase.
“The reason I’m here is to ask for the mayor and council’s support in our opposition to this rate case in the form of a motion and a letter to that effect,” said Austin.
Two other locally-owned phone companies are facing similar pressure from AT&T, and are also questioning the rate increase.
“Ringgold Telephone is having a hearing the same day,” said Austin. “AT&T has also requested that they go through a rate case, and there’s another company down in Rome called Public Service Telephone that is going to be involved. It’s the three of us.”
Chickamauga officials were universally opposed to the rate increase, seeing it as an unnecessary burden on their residents.
“We’re still in a down economy,” said Chickamauga city manager John Culpepper. “A large percentage of our citizens are on a fixed income. We’ve still got mom-and-pop independent businesses downtown, and they’re going to double their rate.”
Currently, the base residential rate for Chickamauga Telephone Company is $13.30 per month. AT&T is proposing that the new cost be $18.83, a 42 percent increase on residential consumers. For commercial phone lines, the change would be even more drastic, doubling the base rate of $20.40 per month to $40.80 per month.
“And that’s the base rate,” said Austin. “That’s before we add the USF (universal service funds) … that we’re required to charge in taxes. In reality, the $13.30 is about $23 to $24, so it’s going to go about $28 or $29, if AT&T is successful in getting the Public Service Commission to agree.”
Austin said that the circumstances of the rate increase request are highly unusual and rather suspect.
“This is unprecedented,” he explained. “According to our company attorney this has never ever been done before, never ever been requested before. What it boils down to ... every land line company in the state of Georgia pays into a universal access fund. And at the end of every year, every company can request to draw. Now, companies like Chickamauga, Ringgold, Public Service, some of the smaller companies, we have historically drawn more out of this fund than we put in it. It’s designed to make a level playing field for all the landline companies in the state of Georgia
“AT&T basically does not want to contribute to this fund like they are required to by law. It’s a law that they do this and they’re trying to get us to raise our rates with the intention that if we have our rates higher, then they would have to contribute less to the (universal access) fund.
“Telephone companies like us, we are considered a public regulated utility by the Public Service Commission, just like the electric company is here in town and just like the gas companies are. And we are guaranteed a reasonable rate of return on our money. The one thing that makes us a little different than the cable companies and if we don’t understand the cable association you know they’re supporting AT&T’s stance on this, but we’re considered a carrier of last resort, as are all landline companies. And what that basically means is if you live in our service district and you build a house a mile off the road where our lines are, we don’t have a choice. If you want phone, we have to build lines in there to provide you service to your house. The cable companies are not required to play by this, they can say no.”
Chickamauga Telephone Co. is already in competition with larger service providers and cannot afford to lose any local edge they may have over the national conglomerates.
“Right now, looking at the base rate, Comcast will sell you service for $19.95 a month. Ours is about $23.95. So we’re basically already higher than they are on our base rate for customers...We certainly hope that this room is full. The worst thing we can do is – we successfully petitioned the Public Service commissioners to come to this community to get the public input part of the hearing as opposed to having it in Atlanta like they normally do, they’re going to do it for us at… We have a letter from (Walker County) commissioner (Bebe) Heiskell basically opposing the rate increase and we would ask for a motion and a letter from the city council for the same thing.”
If the rate were to increase, Austin predicts that Chickamauga Telephone Co. would lose more than just a handful of customers; he fully expects the company to be decimated.
“By all means (we’d lose customers),” he said. “The demographics of Chickamauga are that we’ve got a lot of folks that are retired or on fixed income. … Sometimes we’ll have a federal charge that we have to pass along and it’ll be 27 cents, maybe. And if somebody’s used to paying a certain amount and it jumps 27 cents, they’ll light our phones up at the office, wondering why their phone bill went up. ... So we know a five-dollar increase is going to adversely affect us. ... We do suspect that we will lose a considerable amount of lines if our rates go this high, if they’re successful in getting the Public Service Commission to raise our rates.”
Chickamauga Telephone Co. currently serves a little more than 5,000 customers. For those who would like to attend, the Public Service Commission meeting is open to the public and welcomes input from local citizens. The meeting will begin at 4 p.m. Monday, Aug. 13, in the Chickamauga Civic Center and city council meeting hall.