While proposed tax breaks remain unresolved in the Legislature this session, lawmakers could give virtually every consumer in the state a cut in their telephone bills by making needed changes in compulsory fees. South Carolina telephone customers collectively pay millions to the universal servicefund.

Last year, the Legislative Audit Council recommended that the fund be reduced. "The fund does not need to be continued in its present form and should be scaled down," the LAC concluded, noting that the goals of universal service have largely been met in South Carolina. Ninety-three percent of households have telephones, comparable to the national average.

Meanwhile, consumers pay into a federal universal service fund for the same purpose. S.C. consumers pay some $51 million to the state fund, and $76 million to the federal fund. According to the LAC, telephone customers pay 2.9 percent of the cost of long-distance calls to the state fund.

The LAC also makes a case for the elimination of a fund established to replace revenues lost when local exchanges reduced access charges paid by long distance companies. It pays out about $33 million a year. The fact that the "interim" fund was established in 1996 underscores the need for legislative review.

A bill before the Senate would follow the LAC recommendations requiring telephone companies to provide evidence to the state Office of Regulatory Staff showing the extent to which they require the continued support of the universal service fund. The ORS would be responsible for adjusting the fee as needed, and requiring an annual independent audit of its finances. The "interim" fund would be eliminated.

Sen. Scott Richardson, a co-sponsor of the bill, says some subsidy is needed, but believes the current universal service fee could be reduced by as much as 70 percent. The Beaufort Republican says revisions should reflect the changing character of telecommunications. For example, he says, any legitimate cost of universal service should be shared by all phone users in the state, including wireless subscribers.

The LAC's audit found that South Carolina's universal service fee is larger than any other Southern state. It further notes that "in a competitive market, rate regulation is not needed for consumers to have affordable choices." The state Public Service Commission determined in 2002 that "competition in the local services market is strong."

The Legislature should act to sharply reduce an unneeded drain on virtually every family in the state.