PR-11-114 -- PSC Staff Files Report On Basic Local Telephone Rates

Contact: Kevin Kelly (573) 751-9300
FOR IMMEDIATE RELEASE -- FEBRUARY 3, 2011
JEFFERSON CITY---As directed by the Missouri General Assembly, the Public Service Commission staff has filed its third and final report regarding the statewide average rate for nonwireless basic local telephone service in Missouri. 
The report sent to the Missouri General Assembly shows that basic local telephone rates for Missouri residential and business customers have increased from 2007 when the last report was filed.
According to the latest report, the overall statewide average rate for landline residential customers increased 49 percent from $11.49 a month in the 2007 study to $17.11 a month in 2010.  For business customers, the overall statewide average rate in the 2007 study was $29.77 a month.  The rate increased by 15 percent to $34.35 a month in the 2010 study.  The overall average rate for both residential and business customers increased by 53 percent from $14.66 a month in 2007 to $22.49 a month in 2010.
The Missouri General Assembly ordered the studies be conducted as part of legislation passed in August 2005 (SB 237) which deregulated some telecommunications pricing by the PSC.  Under the law, if competitive status were granted in a telephone company exchange(s), the company would be allowed to raise or lower telephone rates at its own discretion in the competitive exchange(s).  In theory, those rates would be determined by the marketplace and not the PSC.  The law also deregulated pricing for telephone packages or “bundles” of services.  Subsequent legislation further deregulated telecommunications pricing, billing and quality of service.  The PSC is currently investigating the quality of service received by Missouri customers.
“While the Commission has limited authority over telephone companies in Missouri, we are still interested in receiving customer comment and will continue to monitor telephone company rates and performance to make sure that customers are treated fairly regarding price and customer service,” said PSC Chairman Robert M. Clayton III.  “Customers can call the PSC Consumer Services Department at 1-800-392-4211.”
The PSC staff report on local telephone rates is based on information supplied by 43 incumbent local exchange telephone companies and 55 competitive local exchange telephone companies and Voice over Internet Protocol service providers.
According to the report:
  • Staff cautioned that telecommunications services are increasingly being bundled which makes identifying a basic local rate challenging. 
  • The number of residential telephone lines for incumbent local telephone companies dropped from approximately 1.82 million in 2007 to approximately 1.37 million in 2010.
  • The number of residential telephone lines for competitive telephone companies increased from 158,996 in 2007 to 247,022 in 2010. 
  • The number of business telephone lines for incumbent local telephone companies increased from 330,810 in 2007 to 580,164 in 2010.
  • The number of business telephone lines for competitive telephone companies increased from 84,213 in 2007 to 152,939 in 2010.

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Case No. TO-2011-0073 
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