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Bell Challenged to Cite Alleged Inaccuracies in Report, Address Substantive Issues Raised by Critical Analysis

The leader of the State Senate is challenging Southwestern Bell to specifically detail what it alleges are "inaccuracies" in a report that is highly critical of the telephone company's bid to win new regulations for itself.

The report by Senate legal consultant Rick Chamberlin warns that Bell, not consumers, is likely to be the biggest beneficiary of the proposed regulatory plan. Among other things, it asserts that the initiative could strengthen Bell's monopoly status, eliminate any substantive state oversight and stick customers with rates that may already be too high. When the report was released yesterday, a Bell official claimed it was "fraught with inaccuracies," but failed to cite a single specific case of error or inconsistency.

"If there's something specifically wrong with the report, we'd certainly like to know about it. Just issuing a blanket statement condemning the report without providing any specifics or supporting documentation doesn't shed much light on a very important issue," said Senator Stratton Taylor, Senate President Pro Tempore.

"Our goal is to protect the consumers and the more information Bell provides us about the report and related issues, the better chance we have of achieving that goal."

In responding to the report, a Bell official touted a proposed five-year rate freeze included in the regulatory plan, asserting that "this means the basic local telephone service rate will not have increased for 18 years."

That statement, according to Senator Taylor, is misleading at best.

"The issue isn't whether rates should be kept at the same level, but whether they should be lowered. As documented by the Governor's Task Force on Telecommunications, the Corporation Commission has estimated that Bell is overearning to the tune of $90 million a year and the number could grow larger as technology costs continue to decline," said Senator Taylor.

"It's like buying a VCR. If you walked into a store 15 years ago, you might have paid as much as $600. Today, you can get a better product for a fraction of the price because the costs of the technology have declined. Paying the same price you did 15 years ago isn't always a good deal when you're talking about technology."

The legislative leader pointed out that another telecommunications provider, GTE, just agreed to make a refund to its ratepayers after a rate review by the Corporation Commission.

"It may turn out that the best course of action is a complete rate review of Southwestern Bell. Because of the complex nature of this issue, we don't yet know what the best approach may be. We're trying to shed some light on this issue, answer some questions and avoid what could be a costly rush to judgment. I think the Chamberlin report is an excellent start," said Senator Taylor.

"I think the people of Oklahoma deserve a more substantive response from Southwestern Bell, something more than just a press release that fires off a few allegations without any evidence to back them up."

Chamberlin, a former Assistant State Attorney General who helped negotiate a 1995 rate settlement with Bell, was hired by the State Senate to advise lawmakers on the proposed Southwestern Bell regulatory changes, dubbed "The Oklahoma Plan."

The Corporation Commission is in the process of finalizing the terms of the alternative regulation agreement with Bell. That proposal will ultimately go before the Legislature for its review and the consideration of any related legislation.

Contact info
Senate Communications Division - (405) 521-5605