Senate stings Ameritech

By CHRIS CHRISTOFF

June 22, 2000 Web posted at: 3:52 PM EDT (1952 GMT)

In this story: Ameritech claims "subterfuge" Senate strife RELATED STORIES, SITES

LANSING, Michigan (Detroit Free Press) -- Ameritech telephone customers would see a $3.28 cut in their monthly phone bills under legislation given final approval early this morning by the House. It approved a Senate version on a 61-45 vote, sending the measure to Gov. John Engler to sign.

The vote was a victory for Engler and a stunning defeat for Ameritech, whose intense lobbying effort to head off a state-imposed cut included a multimillion-dollar television ad campaign.

The Senate earlier approved the bill on a 21-17 vote. The Senate revised an earlier House bill that would have cut all phone service rates in Michigan by five percent, and put the $3.28 Ameritech fee up for state approval. Currently, the so-called access fee can be charged without review by the Michigan Public Service Commission.

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Engler, in early May, called for a five percent rollback in all telephone service rates in Michigan. The final bill passed effectively cuts basic rates for Ameritech customers even more than five percent, but does not reduce long distance service rates.

The rollback would be in effect through 2005, or until the PSC determines that Ameritech has enough competition to hold rates down.

By wiping out the access fee altogether, the legislation reduced Ameritech's basic service rate by about 16 percent. That would cost the company about $160 million a year in revenue.

The bill also gives the PSC more authority to nudge competition in local phone markets. Under the bill, all calls made within 25 miles would not be subject to toll charges.

Robert Cooper, president of Ameritech Michigan, had harsh words for the Senate action.

Cooper, in a letter to lawmakers, accused the Senate Technology Committee of "subterfuge" to benefit long-distance companies.

"The process on display today is shameful," Cooper wrote.

"The benefits of this bill to consumers are nonexistent. The costs, though, are harsh."

Ameritech has complained that cutting the access fee would benefit long-distance giants such as AT&T, which face no cut under the bill.

"It is an illustration of what we've been saying all along -- this bill will benefit long-distance companies," said Ameritech spokesman Mike Barnhart. "In the long run it'll cost Michigan jobs and good infrastructure. It is taking money out of Michigan."

Senate Minority Leader John Cherry, D-Clio, said he doubted the bill would result in long-term rate relief to consumers. But Senate Republicans said the bill would produce guaranteed savings to phone customers.

The vote to approve the telecommunications bill capped a day of mutiny. Earlier, the Senate Energy and Technology Committee was effectively taken over by its Republican vice chairman after Chairman Mat Dunaskiss, R-Lake Orion, declared a recess and walked out with no action taken on the telecommunications issue.

Vice Chairman Ken Sikkema, R-Grandville, told Dunaskiss he had no right to singlehandedly gavel the committee to recess. With all but Dunaskiss and one other member remaining in their seats, Sikkema proceeded to take testimony on a proposed bill Dunaskiss had drafted.

Shortly afterward, Dunaskiss returned, and a vote was taken, and the bill was sent to the full Senate on a 5-0 vote.

Senate Majority Leader Dan DeGrow, R-Port Huron, said plans were in place to move the bill if Dunaskiss tried to recess the committee with no action. Dunaskiss had said there was no hurry to pass a bill because the state's Telecommunications Act doesn't expire until Dec. 31.

"The bill was coming out, Mat needed to understand that," DeGrow said. "It would be unacceptable to go home without action taken. It would not be good for the Senate, not good for Republicans and not good for the institution."

After the Senate vote, Dunaskiss praised the telecommunications bill as "pretty darn good." He said it would ultimately help Ameritech win federal approval to enter long distance markets, while long-distance companies enter the local market.

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