Democracy & Technology Blog Will Ga. PSC protect consumers or corporations?

At next week’s administrative session, the Georgia Public Service Commission will consider a proposed order from the Public Interest Advocacy Staff concerning the applications of three small telecom service providers for subsidies from Georgia’s Universal Access Fund. The companies are: Chickamauga Telephone Corp., Public Service Telephone Co. and Ringgold Telephone Co.
According to Kristi E. Swartz, writing in the Atlanta Journal-Constitution in August,

The Public Service Commission held two days of hearings this week on three requests of more than $1 million each. Opponents took particular aim at executive and owner compensation.
Ringgold Telephone, which serves northeast Georgia, paid five executives more than $950,000, according to testimony and documents filed with the PSC. Public Service Telephone, which operates in Middle Georgia, doled out $2 million in dividends to its three private owners, according to testimony and documents filed with the PSC.

We are talking about government-mandated subsidies, which force urban and suburban telecom consumers in Georgia, without regard to individual economic circumstances, to pay inflated prices for wireline telephone service for the purpose of subsidizing telephone service in rural communities. Will rural consumers really be cut off from the rest of the World without these subsidies, or do the subsidies mainly benefit richly compensated executives and owners of legally-privileged telecom service providers? It is hard to tell. “Because the rural companies are private,” notes Swartz, “much of their financial information is undisclosed.”

The commission chose to investigate only those companies who requested more than $1 million, but who knows what lurks in the balance sheets of the other companies. Obviously, these initial findings may indicate a disturbing pattern of abuse. Clearly, the commission should broaden its investigation.
Last year, the Georgia legislature passed legislation (House Bill 168 (2010)) providing that the PSC “shall require any local exchange company seeking reimbursement from the fund … to file the information reasonably necessary to determine the actual and reasonable costs of providing basic local exchange services.”
A report by Maggie Lee in the Macon Telegraph notes that “an audit from before 2010 shows abuses like fancy trips and property bought by some of the subsidized small companies.”
The available evidence and the law in Georgia would seem to compel the PSC to conduct a full and thorough investigation of every application for subsidies from Georgia’s Universal Access Fund.
The PSC is in a unique position to eliminate some of the waste, fraud and abuse which diminish public confidence in government, or prove that it does not exist.

Hance Haney

Director and Senior Fellow of the Technology & Democracy Project
Hance Haney served as Director and Senior Fellow of the Technology & Democracy Project at the Discovery Institute, in Washington, D.C. Haney spent ten years as an aide to former Senator Bob Packwood (OR), and advised him in his capacity as chairman of the Senate Communications Subcommittee during the deliberations leading to the Telecommunications Act of 1996. He subsequently held various positions with the United States Telecom Association and Qwest Communications. He earned a B.A. in history from Willamette University and a J.D. from Lewis and Clark Law School in Portland, Oregon.