The Public Utilities Commission (PUC) on Wednesday fixed Monday and Tuesday for hearings into a temporary rate hike for the phone company while its application for massive increases in charges for local calls and other services is deliberated on.

As a consequence, the PUC suspended the utility's application for rates increase for six months from January 31, 2002, pending the determination by way of hearings of its December 31, 2001 rate filing.

The suspension was necessary since the rates by law would have automatically come into force 30 days after they had been applied for once no action is taken by the PUC.

In its December 31 filing, GT&T is seeking to raise an additional $5.5B. GT&T says the additional revenue is needed to offset the projected loss in revenue from calls from the US and to ensure that it earns its guaranteed 15% rate of return on capital. Rates for calls within exchanges would skyrocket by 1900% while tariffs for calls between exchanges would jump by 75%. Users of the internet would also have to pay GT&T for the number of minutes racked up on line. Charges for lines and business rental fees are also slated to go up.

Despite objections by the consumer groups arguing that insufficient time for a careful study of GT&T's proposal hampered a structured response, the commission, after representation by counsel for the utility, settled for the option of temporary rates until a final ruling on the rate hikes application.

The conference hall of the Supreme Court library was crowded with the gathering overspilling onto the gallery as staff from the utility attempted to hear firsthand the decision of the commission.

Accommodation for members of the media, which is customarily reserved, was not evident, a point raised by media consultant Kit Nascimento who stated that it was the commission's responsibility to provide seating for the journalists.

GT&T's application for tariff increases as argued in the filing with the commission dated December 31, 2001, is to give effect to its entitlement of a minimum rate of return of 15% on its capital.

This it argued is even more important since the US Federal Communications Commission's (FCC) ruling on international settlement rates which has seen a reduction of the rate for calls from the US to Guyana as of January 1, 2002 from US$0.85 per minute to US$0.23 per minute.

In a joint statement read by Patrick Dial, the Consumers' Advisory Bureau (CAB) and the Guyana Consumers' Association (GCA) bemoaned the short notice for Wednesday's hearing which they said did not allow for a proper response to what they termed a case of great complexity and momentous significance.

Quoting from a passage from the Conduct of the Utility Rate Case by Francis X. Welch, Dial stated that adequate notice along with time for access to documents to be considered at the hearing is an indispensable condition of natural justice.

Dial also used the opportunity to raise the issue of a petition filed by GT&T's parent company, Atlantic Tele-Network (ATN) with the FCC seeking a reconsideration of its rejection of a waiver of the new settlement rate of US$0.23 per minute. He contended that this petition was still pending.

This was however rejected by counsel for the telephone company Senior Counsel, Rex McKay who following Dial's presentation rose to state that the consumer advocate was seeking to misinform those present. Senior Counsel Miles Fitzpatrick, also appearing for the phone company, pointed out that the FCC after reviewing the petition had found that it had no merit and as such denied the application thereby necessitating that the phone company comply with the benchmark settlement rate.

He further stated that GT&T had proceeded to sign agreements with all US carriers at the new rate and that the US approach normally sets the benchmark for other countries to follow.

Consumer Advocate Eileen Cox also attempted to pursue the issue of the timing of the application and the period for preparation while stating that the consumers only got one copy of the proposal for the increases which they had to duplicate.

Fitzpatrick, pointing to the presence of a number of the company's staff, whom he stated had come to the hearing out of concern for their job security if the company did not achieve its rate of return, urged the commission to deal with the matter expeditiously.

This was backed up by McKay who adverted the commission's attention to Section 43(4) of its Act while requesting that temporary rates be fixed as an interim measure prior to the final determination of the tariff issue.

Dial at this point in a last ditch attempt to sway the commissioners on the issue of not granting temporary rates cited the experience of GT&T not being forthcoming on the issue of repaying a surcharge levied by it on consumers.

Fitzpatrick countered that the consumer advocate was again seeking to mislead the public since that matter which is now being addressed in the Court of Appeal had shown that the court had found that the trial judge was incorrect in suggesting that GT&T had wrongfully surcharged the public but instead was considering the method used in collecting.

Other consumers in the audience objected strongly to GT&T's proposal while stating that it should pack its bags and go.

An employee of the company, Mike Jones, argued that GT&T workers and their families stood to suffer if the temporary rates are not applied.

Commissioner Hugh George raised the subject of why the matter had not been brought before the PUC earlier since GT&T had prior knowledge of the settlement rate issue and should have made adequate preparation.

GT&T's consultant, Godfrey Statia countered that the phone company in correspondence about rate rebalancing had signalled the implications for it once the new dispensation came into force. He offered apologies on behalf of the company if it seemed as if it did not take the situation into consideration.

He however added that it was the commission's duty as regulator to look at the situation and act accordingly.

Commissioner George, however, replied that the commission is only expected to act once an application is made as opposed to initiating such actions.

Taking account of concerns over seating accommodation, the commission fixed the next sitting for Hotel Tower at 4 pm on Monday.

Present for the PUC at the hearing were Chairman, Prem Persaud and commissioners John Willems and Hugh George.