The jury is out on a rate case increase for Chickamauga Telephone Co. that could increase local phone rates between 42 and 50 percent for local customers.

A meeting of the Georgia Public Service Commission last week drew more than a hundred citizens and local officials to the Chickamauga civic center in opposition to any rate increase on the small company, which currently serves just under 15,000 customers.

At issue is the amount of subsidy money received by both Chickamauga Telephone Co. and the neighboring Ringgold Telephone Co., which held a similar meeting later Monday evening. AT&T requested that the Public Service Commission examine the two smaller companies' use of the subsidy funds, which come out of the state universal service fund, to see if some of the subsidy could be removed.

“Many of you are probably not aware there’s a fund in Georgia that subsidizes local telephone service for certain customers in Georgia, and Chickamauga customers benefit from that subsidized telephone service," said AT&T assistant vice president of regulatory affairs Pat Wingo. "AT&T and other companies pay into this fund. Their customers do not draw out from this fund. Chickamauga was one of three telephone companies last year that received more than a million dollars from the fund.

“Because we do not benefit from the fund, then our customers tend to pay more, not only for their service, but on top of the service, pay more for funding for customers who do receive these funds," he said. "And that’s the reason AT&T has requested of this commission these cases which are coming up.”

Overwhelmingly, all of the assembled residents and Chickamauga Telephone Co. customers saw the proposed increase — which AT&T had suggested that the public service commission consider — as a slight against their tightened budgets in the current economic climate.

Mark McDonald of Chickamauga Telephone Co. emphasized the 60 years that the local company has been serving its community, during which time it has constantly kept rates low and established lifelong friendships between the employees and the customers. McDonald called the proposed rate case "a docket which was initiated in our view by AT&T to raise rates on Chickamauga Telephone customers to benefit AT&T shareholders.”

"When somebody like AT&T is wanting a company to raise their rates, it's kind of like Publix wanting Shop-Rite to go up on their Coca-Cola because they're the cheapest in town, and we just don't think that's right," said state Sen. Jeff Mullis.

“We know times are tough in rural Georgia. We know times are tough all over Georgia," said Wingo. “We do not have the power to set rates for customers. … We’re just suggesting to this commission that they set rates. What this is not about is rural telephone service increases. Those are already on a trajectory to be going up over the next three years … so this is about business rates going up, possibly going up. We’re not recommending that they have to go up, just that those differences do not come out of the universal service fund.”

"We think it's crucial that you not approve this rate increase," said Mullis. "The percentage is outrageous, but just having another company ask for this rate increase I think is preposterous."

“Let me just be clear,” said public service commissioner Stan Wise, “if a rate increase comes, it’s not going to be as the cable television association asks or requested that it comes, or from some agreement or the public service commission giving you a ban so you can raise your rates. It’ll only come at the request of Chickamauga Telephone Company. I’d be very surprised if my colleagues just arbitrarily said you’re going to have to raise your rates. It’ll have to come from Chickamauga. It’s coming from you. Yes, in the rate proceedings we will look at where Chickamauga spends its money, how they spend it, what they pay folks, and look at the level of subsidy. And everybody says subsidy, but let’s just remember that’s other people’s money. And if I was Chickamauga, I’d want to spend it too. But if it was my money, I’d be a little bit more careful, as I’m sure everybody else in this room is. So let’s just be clear, with whatever message we have: if the rates are raised in your service district, just as they are with every other independent telephone company in the state — thirty-five of them, by the way; only three of them are having this review about the level of subsidy, other people’s money — so if you can’t live within your means, then it’ll have to be up to you as a telephone company to request of this commission to raise your rates. AT&T is not going to raise your rates. The cable television association is not going to raise your rates. You’re going to have to find a way to raise your rates.”

At this point, it seems unlikely that the public service commission will approve the rate case, although it has until October to examine the matter in detail.