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INNOVATIVE, PSC AT ODDS WITH MAINLAND PRACTICES

July 16, 2002 – "That’s an odd position … It must give that phone company some serious political problems."
That was the comment of a mainland regulatory official when the Source described the protest by Innovative Telephone regarding the collection and payment of 911 fees on behalf of the local government. (See "Innovative wants to stop billing for 911 tax".)
About a dozen mainland telephone company officials, association representatives and spokespersons for state regulatory commissions approached by the Source all said they had never heard of a local phone company complaining about collecting and passing on the 911 fees.
"We have had no such complaints," the public affairs officer for the West Virginia state regulatory agency said. "As a matter of fact, our phone companies have been great on 911. They collect the fees everywhere when they are asked, and they don't charge for the 911 phone calls."
Phone companies in 51 of West Virginia's 52 counties collect the 911 fees, and the one that doesn't is expected to levy the 911 fee shortly.
There were similar reactions from personnel of the state agencies that regulate the phone companies in Kansas, Kentucky, Mississippi, New Mexico, Wisconsin and Virginia. No one in any of those state agencies could recall any phone company objecting to the 911 fees.
"In many ways, 911 is like apple pie and motherhood," one official volunteered.
"The 911 program is well-established and non-controversial,"another said.
In recent years, many mainland local — city and county — governments that finance their local 911 operations have turned to telephone-users as a source of revenue. The easiest way to handle the collection of the fees is to ask the phone companies to add the charge to customers' monthly bills. The money goes to pay the salaries of the operators who work around the clock taking the emergency calls and alerting response agencies as needed.
The charges vary considerably. In the Virgin Islands, telephone customers are assessed $1 per phone line per month. In Arlington, Virginia, it is $3.50 per line per month.
The Source visited three local phone companies in rural Virginia to, among other things, get officials' reactions to assessing and collecting the 911 charges. "It goes with the territory," one executive said with a sigh, adding, "It's our civic duty." He noted that the 911 charge is just one of several that the local phone companies collect and pass on to other institutions.
Some of the money collected goes into a national "affordable service" pool for rural service providers — a pool from which Innovative collects some $25 million a year. (See "Innovative Telephone heavily subsidized".) Some goes to narrow programs such as assisting the deaf with special telephone equipment, or for burying phone lines along highway rights-of-way.
Financial reports routinely available elsewhere
Innovative also appears to stand alone, or nearly so, regarding access to the financial reports filed by phone companies with their regulatory commissions.
The press officer at the National Association of Regulatory Utility Commissions said she thought that virtually all states required local phone companies to submit annual financial reports, and that all, or virtually all, of them regarded those reports as public records. She did not have state-by-state data on this point, however; so, calls were made to a sampling of state agencies.
Officials at all of the states contacted said annual financial reports are required by law of the phone companies they regulate. And in all but one, Mississippi, the reports in their entirety are public documents. In Mississippi, an official said, "A minority of these financial reports are regarded as proprietary" and thus are not public record.
When a Source reporter asked to read the financial reports of Virginia's telephone companies, the only question asked was, "What years do you want?"
The Virginia Corporation Commission provided the reporter a place to sit near a photocopy machine and provided detailed (usually eight-pages long) financial reports on every telephone company in the state. The reports showed various classes of income, expenses and profits, and also executive compensation. All of the state's telephone companies are required to submit their reports in the same format, which makes it easy for regulators and the public to read them and comprehend the corporations' finances.
While the reporter had to travel to the state capital, Richmond, to examine the Virginia reports, Kentucky has the financial reports of its telephone companies posted on the state government web site; unfortunately, even the most recent of the reports accessible there are several years old.
V.I. law clear on public utility reports and public access
After ascertaining the mainland practices and studying the pertinent parts of the Virgin Islands Code, the Source made a verbal request and then a written request to the Public Services Commission to see the financial reports that Innovative had filed. The staff deferred to the commission members.
The matter was on the agenda for the PSC's most recent meeting, on June 21, where Innovative's attorney objected to making the reports available, arguing that the territory's public records act does not allow access to sensitive financial information and that Innovative had submitted the financial reports to the commission "subject to a demand for confidentiality." The commission postponed acting on the request. (See "Phone company told to produce billing data".)
The PSC's July meeting is scheduled for Friday on St. Croix.
Virgin Islands law is explicit on the subject of financial reports required of utilities by the Public Services Commission, and has been since 1965.
Section 8, Chapter 1, of Title 30 stipulates:
"Each public utility shall furnish to the Commission, in such form and at such time as the Commission shall require, such accounts, reports and information as shall show in itemized detail: Depreciation: salaries and wages; legal expenses; taxes and rentals; quantity and value of material used; receipts from residuals, by-products, services or other sales; total and net costs; net and gross profits; dividends and interest; surplus or reserve; prices paid by consumers; and in addition such other items, whether of a nature similar to those hereinbefore enumerated or otherwise, as the Commission may prescribe, in order to show completely and in detail the entire operation of the public utility in furnishing its product or service to the public."
Meanwhile, Section 881 (b) of Title 3 states:
"Every citizen of this Territory shall have the right to examine all public records … " Subsection 881 (g) (6) has a caveat that might, subject to interpretation, apply in some situations, but presumably not in the case of local phone service, where there is no competition: "Reports to governmental agencies which, if released, would give advantage to competitors and serve no public purpose" are to be kept confidential.
Those familiar with legal language say the "and" in that sentence means that in order for a report to be suppressed from public review, it would have to meet both tests: offer advantage to competitors and serve no public purpose.

Editor's note: Source reporter Jim Day assisted with this article.
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