GREENVILLE, S.C. - Telephone companies say a deregulation bill in the South Carolina Legislature could help them set better prices, but the state consumer advocate says it would limit customers' ability to complain about poor service.

The bill would remove Public Service Commission oversight of the practice of offering services such as Internet access, residential telephone service and wireless services in a bundled package.

BellSouth, which backs the bill, said it will give consumers more choices and better prices. BellSouth officials would not say how much of its service is sold in bundled packages.

"We just want to compete without our hands tied behind our back," said Hank Fisher, the company's executive director in South Carolina.

Consumers or competitors would no longer be able to the PSC about poor service or unfair practices when it comes to bundled services, said Elliott Elam, the state's acting consumer advocate.

"The only resort a customer or competitor would have would be to go to federal court," said Elam, who opposes the bill.

PSC officials want lawmakers to add more consumer protections to the bill, said Douglas Pratt, an engineer at the agency.

The bill is the latest in a series of moves toward deregulation by BellSouth.

In 1996, state lawmakers permitted BellSouth to move to the less-stringent form of regulation that uses price caps instead of a set rate of return. Last year, state lawmakers removed its broadband offerings from PSC oversight.

The bill would also relax regulation for some rural telephone companies, allowing them to use price caps instead of set rates that require them to return to customers any earnings over a certain amount. Only rural companies that face competition from two wireless telephone companies could opt out of set rates.

Opponents say removing government oversight from rural companies which face little competition in the areas they serve would hurt competition and could result in higher prices for customers.

Two wireless competitors are not real competition for rural phone companies, said Frank Knapp, president of the South Carolina Small Business Chamber of Commerce.

The rural phone companies "are monopolies and ought to be regulated as monopolies," said Knapp, whose group opposes the bill.

Jim Wilder, general manager of the Piedmont Rural Telephone Cooperative in Laurens, concedes his cooperative faces little competition in the "wireline" business, but said it needs price flexibility to respond to a rapidly changing telephone market.

The cooperative has about 14,000 customers in Laurens and Spartanburg counties. Six wireless companies compete for customers in its service area, and Wilder said cable companies are starting to get into the telephone business.

"What we're trying to do is get prepared so when things like that occur, we'll be ready," Wilder said.

The legislation has passed the House. The Senate Judiciary Committee is scheduled to take it up Tuesday.

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Information from: The Greenville News, http://www.greenvillenews.com/