CHARLESTON, S.C. - Phone companies are free to raise rates on consumers who buy options such as call waiting with their local service under a bill Gov. Mark Sanford has signed into law.

Critics of the legislation Sanford signed on Dec. 3 say BellSouth and other big local phone service providers will reap the benefits while it will hurt competitors and consumers.

The law lets telephone companies in rural areas set prices without regulation as long as two wireless phone companies are offering service in the same area.

Sanford and lawmakers who voted in favor of the bill say prices will drop, uncompetitive firms will fold and fewer tax dollars will go to fund state regulatory efforts.

"It's good for economic development," Sanford spokesman Will Folks said. "There are going to be a whole host of companies that will benefit from this."

The law, which took effect immediately, also means that consumers can't use the Public Service Commission to settle complaints. Their issues will be handled by the companies themselves and the Federal Communications Commission.

At the same time, the PSC no longer will have a role in handling antitrust allegations competing phone companies raise.

"This is just a power-play, pure special-interest legislation," said Jack Pringle, an attorney who represents a number of phone companies that lease lines from companies like BellSouth in South Carolina.

"Whenever BellSouth scores a clear and decisive victory in favor of the monopoly, it's disappointing, but unfortunately, we're not surprised," said John Ivanusca, vice president of regulatory affairs for Birch Telecom, a Kansas City, Mo.-based company that has about 4,800 local phone customers in South Carolina. "Things don't look great for consumers in South Carolina."

While the state Consumer Affairs Department and the AARP persistently argued against the legislation, supporters say the changes will ultimately benefit consumers and the telephone industry in the state.

Ted Creech, BellSouth's regional director in Charleston, said the legislation will allow his company to compete better with flexible pricing. It has traditionally taken the PSC about two weeks to ratify a phone company's request to change rates.

BellSouth argued that the state's current approval process let competitors see what they would be offering. That, they argued, gave the competition an advantage. But others argued the process would tend to lower prices for consumers.

Opponents of the new legislation that was signed with no fanfare said they were outspent and outgunned by BellSouth, which has seven registered lobbyists.

The company gave Sanford $5,500 in his 2002 gubernatorial bid and The Institute on Money in State Politics reports BellSouth gave $91,390 to various candidates between 2001 and 2002.

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Information from: The Post and Courier, http://www.charleston.net/