It seems like BellSouth wants to have its cake and eat it too, and South Carolinians will wind up paying for BellSouth’s feast.

In the telephone “deregulation” bill currently sitting on Gov. Mark Sanford’s desk, BellSouth has gotten the Legislature to sign off on a bill that virtually eliminates the S.C. Public Service Commission’s regulation of telecommunications services. But the bill also retains BellSouth’s whopping regulatory subsidies from the South Carolina Universal Service Fund, the only such state program in the BellSouth region, and it does so at the expense of consumers as well as start-up competitors.

BellSouth made $3.9 billion last year, and spent $441,208 on lobbying and related expenses in the last two-year cycle alone. Now does that sound like a company that needs to be subsidized by South Carolina consumers?

Let’s take a closer look at the deregulation. It applies to “bundled” services, which includes traditional local telecommunications service when combined with any other service, such as long distance, Internet access, caller ID, call waiting, etc. That’s the main package that most start-up competitors sell, including my company, Xspedius Communications.

Xspedius has switches installed in Greenville and Columbia, and fiber optic networks in Greenville, Columbia, Spartanburg and Charleston. Unlike the resellers, Xspedius has made a significant investment in its fiber-based network and has both feet in South Carolina to stay. But we did so based on the federal Telecommunication Act’s guarantee that we’d be able to compete with BellSouth on a level playing field. If this state bill is signed into law, that guarantee will be gone.

As the dominant provider of local service in the market — the FCC reports that competitors have captured just 8 percent of the access lines — BellSouth knows how to throw its weight around. The Wall Street Journal reported recently that, in Florida, BellSouth is offering $100 checks along with $25 gift cards and waiving its $40 line-connection fee in order to win back customers.

One carrier has filed a complaint against BellSouth in Florida alleging anticompetitive conduct. Similar cases have cropped up at the Louisiana and Georgia commissions because BellSouth refuses to offer DSL service to a customer who chooses to buy local service from a BellSouth competitor.

But under the South Carolina legislation, competitors cannot bring similar charges of anticompetitive activity to the South Carolina commission. They have to just take their lumps, or maybe let the federal government decide the issue, either at the FCC or in federal court. The bill won’t stop anticompetitive activity or complaints against it, but will only hand the decisions over to Washington bureaucrats.

In a particularly insidious maneuver, BellSouth is pressing the PSC to rule that, in the next Xspedius interconnection agreement, Xspedius should lose its right to take its claims anywhere other than the S.C. Public Service Commission. That means, if this bill became law, we’d be left high and dry with no recourse at all for a complaint in South Carolina.

But consumers will be even worse off. Today, if you have a complaint, you call your local commissioner’s office at the PSC, and the infringing phone company gets a phone call from the PSC on the complaint. We even get these calls from time to time — a South Carolina advocate calling on behalf of the consumer to press their complaint. And this is as it should be.

But under the bill, these calls are cut off, and the consumer might be able to take its case to the FCC. But our company has never gotten a call from the FCC to advocate a consumer’s case. The FCC gets too many complaints, and your complaint will be reduced to a bureaucratic paper shuffle. That’s why the South Carolina AARP, the state’s consumer advocate, the S.C. Small Business Chamber of Commerce, and, yes, even the PSC itself all testified against this bill.

When I participated in the Alabama case to decide whether to let BellSouth into long distance, one of the Alabama attorneys boiled it down by saying, “Before we let this big old dog up off the porch, we need to put some safeguards in place.”

Consumers and competitors must urge Gov. Sanford to veto this bill. If he doesn’t, the “big old dog” will be set loose in South Carolina, and South Carolinians will pay the price.

Mr. Falvey is senior vice president for regulatory affairs at Xspedius Communications, which is headquarterd in O’Fallon, Mo.