State denies BellSouth’s request for rate hike

BellSouth sought to reclassify rate groups for residents of 56 growing cities in Tennessee, a move that would have raised bills for local service about 8 percent, according to filings with the Tennessee Regulatory Agency.

Tennessee Attorney General Paul Summers said customers will save nearly $2 million a year as a result of the decision.

“Our job is to protect the interests of Tennessee consumers,” he said.

Consumer advocates in the state attorney general’s office said the proposed reclassifications violated a state law that ties rate increases for basic telephone service to the national inflation rate. That formula would limit a rate increase to a 1.6 percent this year.

TRA Chairwoman Debi Tate agreed with the attorney general’s conclusion.

“I just couldn’t reconcile the practical notion that the bill paid by residential customers would increase in most of these exchanges that were part of this tariff filing,” Tate said.

In the future, BellSouth will be allowed to raise local residential rates of regrouped exchanges as long as the hikes don’t exceed the previous year’s national rate of inflation.

“We are currently reviewing the authority’s decision and awaiting the final transcript of Monday’s proceedings before deciding on our course of action,” BellSouth spokesman Dennis Wagner said.