Fortnightly Magazine - March 15 1996

A century ago, Congress conveyed valuable public property to certain entrepreneurs to serve the public interest. In exchange, these entrepreneurs agreed to carry the nation's principal means of communication at fair cost and, of course, serve the national defense.

In 1850, with a commitment to move the mail at fixed rates and freely transport federal troops hither and yon, a swath of public land was granted to the Illinois Central to connect Chicago with Mobile.

That was the question on the minds of representatives from local telephone exchange carriers (LECs) who huddled at the United States Telephone Association (USTA) National Issues Conference days before legislators passed sweeping telecommunications legislation that would affect everyone's future.

But the question went beyond what would become law when President Clinton fulfilled his promise to sign the bill.

The Federal Energy Regulatory Commission (FERC) has issued a certificate allowing Steuben Gas Storage Co. (SGS) to construct and operate an underground natural gas storage field, the Thomas Corners Field.

In a preliminary finding that SGS lacked market power, the FERC authorized the company to charge market-based rates, subject to reexamination (Docket Nos. CP95-119-000 et al.).

High industrial electricity rates are often blamed upon current regulation. Some state regulators respond with broad-based reforms; others simply reallocate system costs from industrial rate classes to rates for more inelastic customers (em namely, residential users.