Virginian-pilot. (Norfolk, Va.) 1898-1911, 1900-10-03
WEDNESDAY. OCTOBER >, 1900.
PUT A MAXIMUM RATE IN TIE
SOUTHERN BELL FRANCHISE.

The telephone is as much a necessity
of modern business as the railroad.
the bank or the United States mail.
Therefore. the Importance of prevent
ing 1t from becoming the subject of n
private Monopoly, or OF providing
against exorbitant charges in case
competition cannot be relied upon to
maintain reasonable rates for tele-
phone service
Most of the citizens OF Norfolk had
doubtless supposed that this city was
amply protected against the danger of
q Monopoly. or of exorbitant charges,
by the franchises granted the Southern
States and the Southern Bell Company
respectively. The new telephone sit
uation, however. shows that this is not
the case. The supposition had been
that the franchise of the Southern
States, by fixing maximum charge of
s3S per year for business houses. and
$28 per year for residences, protected
the public; while the provision in the
Bell franchise that the Bell COMPANY
should not furnish service at a less
charge than its competitor, was sup
posed to protect such competitor and
thereby insure the continuance OF COM
petition, and the protection of our cit
liens against exorbitant rates
It Is now plain that this feeling OF
security was ill-founded. If the new
schedule of rates established by the
Bell is legal under It's franchise; that
is, IL the Bell can cut rates by the de-
vice of n limited service. there is no
guarantee that competition will con-
tinue, and there is no assurance that
reasonable rates will be maintained. A
glance ae the facts will show why this
is the case.
The Southern States has a fixed
maximum rate of $3s year for bust
ness houses. The Southern Bell can
charge what 1t pleases. Suppose, there
fore. the Southern States meets the new
schedule established by the Southern
Bell? 1t would then make the same
on residence phones as the Bell,
phuc the Bell iconld get S22 more for
each business phone than the States. In
other words. anr telephone com
pany that is not hampered either by
maximum or a minimum fixed charge.
can run any telephone company that
is hampered by fixed maximum
charge out of the field. However full
of fight the Southern States might be-
and Its belligerency has not yet been
put in evidence-it is at great tlisad-
vantage. The Bell can cut on resi-
dence phones, thereby increasing its
list Of household subscribers, ,chiic IL
Yccoups itself for losses in this respect Jy
raising its charges to business men, who
will have to use its service to reach
their patrons. The Southern States
cannot do this, because it cannot raise
its charges to business men above $3S.
1t will accordingly first lose it's house
hold patrons. because 1T cannot afford
to cut residence rates. and then its
business patrons, because householders
DO not use its service. This is what
Will actually result IL the present sit
uation is not relieved by our City
Fathers.
AS the virginian-Pilot has already
pointed out, 1t is extremely doubtful
that the Bell can initiate limited tel
ephone service at reduced rctcs, without
violating its franchise; IL. however, 1T
can do this. then no time should be lost
BY the City Councils in amending its
/ Erenchsses fixing In 1t the same max