COLUMBUS — The Ohio Supreme Court has upheld decisions by the Public Utilities Commission of Ohio to allow telephone companies to raise rates at will for basic phone service and basic Caller ID.

The PUCO created the "alternative regulation" program in 2006 at the direction of the Ohio General Assembly. Telephone companies said they need pricing flexibility — rather than having to request PUCO approval for each price increase — to respond to market competition from cable companies, wireless phone providers and Internet-based phone service.

The state Supreme Court's ruling on Thursday, March 6, applied to Cincinnati Bell Inc. and AT&T Ohio, which requested and were granted the "alternative regulation" pricing flexibility more than a year ago.

The pricing policy applies to landline phone service. Basic service is a local phone line without additional calling features. Basic Caller ID simply displays the number of an incoming call.

The Ohio Consumers' Counsel, which represents residential consumers in utility rate cases, had appealed the PUCO's actions to the court. Consumers' Counsel Janine Migden-Ostrander said she was disappointed by the court's ruling.

"The PUCO granted AT&T and Cincinnati Bell the ability to raise their rates each year despite the lack of a competitive market for their consumers who simply want a dial tone at a reasonable price," Migden-Ostrander said.

The phone companies can annually raise the monthly fees for basic phone service by up to $1.25, and for basic Caller ID up to 50 cents. The change does not apply to low-income customers who receive a discount under the Lifeline program.

Under the alternative-regulation rules, the phone companies must prove that basic phone service has competition and that customers have reasonably available alternatives in their markets.

Cincinnati Bell used the authority to raise its rates for basic local service in its Cincinnati and Hamilton exchanges by the maximum $1.25 per month in January 2007 and again in January 2008. AT&T, which serves Dayton and all other Ohio urban areas except Cincinnati, has yet to impose such increases.

The PUCO is pleased with the court's ruling, commission spokeswoman Shana Eiselstein said.