Media Release
| For Immediate Release | Contact | Phone |
| May 1, 2008 | Jim Walsh – NJCA | 732-246-4772 |
| Ev Liebman – NJCA | 856-966-3091 |
NJ Citizen Action Releases No Dial Tone Report, Starkly Revealing No Competition for Basic Local Phone Service
Coalition of Consumer, Senior, Disability, Women and Tenant Groups Call on BPU to Reject Verizon-NJ's and Embarq's Bid to Deregulate Prices for Local Phone Service in New Jersey and Keep Phone Services Affordable and Reliable
New Jersey — On Thursday, May 1, 2008 New Jersey Citizen Action released a report, No Dial Tone: Will the NJ Board of Public Utilities Cut the Last Line of Affordable Basic Telephone Service in New Jersey? The survey of 161 BPU listed local telephone service providers details the lack of competition in New Jersey's basic residential local telephone service market. The report was released in response to a petition filed by Verizon-NJ and EMBARQ with the New Jersey Board of Public Utilities (BPU) requesting the radical deregulation of all of New Jersey's mass market, local phone services.
"There is no effective competition in the basic phone service market," said Jim Walsh, Program Director for NJ Citizen Action. "Without competition, just as consumers have experienced in other states that have already deregulated phone prices, NJ consumers will be strapped with high, unaffordable bills, by as much as 300%, and poorer service, "added Walsh.
NJ Citizen Action and a coalition of senior, disability, women, tenant and consumer groups have called on the BPU to reject the telephone giant's deregulation bid and protect affordable rates and reliable services.
Verizon-NJ and EMBARQ currently offer basic local telephone service plans for residential customers at $8.95 and $7.80 respectively. A basic service plan gives consumers the ability to make unlimited local calls and receive unlimited incoming calls.
"The BPU has a responsibility to ensure that everyone can afford to have a phone," said Paulette Eberle, of the Next Step, a disability advocacy organization. "Without access to basic, affordable telephone services thousands of New Jerseyans would be unable to reach loved ones or call for help when tragedy strikes.
The deregulation of basic local phone service has led to higher rates for consumers in other states around the country. In Ohio for example, basic local phone service rates have jumped 15% over the last two years, the maximum increase allowed under Ohio's deregulation scheme.
"We have already suffered the painful experience of the deregulation of New Jersey's energy markets which has led, not to reduce rates or a choice of suppliers, but to skyrocketing bills for NJ families and businesses," said Matt Shapiro of the NJ Tennant's Organization. "The BPU should learn from its past mistakes in rushing to support industry based deregulation schemes, and reject this latest attempt to gouge consumers. Tenants, in particular, are financially stressed by lower incomes and nearly the highest rents in the country. It is vital that they be able to afford basic telephone service, but deregulation will make this impossible."
NJCA staff surveyed 161 local telephone service companies listed on the NJ BPU's website, and shopped for basic local phone service. The major findings of this report include:
* Out of the 161 companies listed, only 1 (CloseCall America) offered a price that is currently competitive to that offered by Verizon-NJ but is 15% higher than Embarq's. No company offered a basic service plan competitive in price with Embarq. Additionally CloseCall America is a fraction of the size company as Verizon-NJ and it is doubtful they can effectively compete with the telecommunications giant.
* 63% of the BPU listed companies do not provide any basic telephone service in NJ, have gone out of business, or only provide telephone service to businesses;
* 19% of the companies only provide basic local phone service to NJ residential subscribers as part of a much higher priced bundled package, which include services like call waiting, caller ID and call forwarding.
"Phone companies want to make profits but Verizon-NJ and EMBARQ should not be able to do so at the expense of affordable and reliable service, services that millions of consumers need as our lifeline to the world," said Paulette Eberle, of the Next Step, a disability advocacy organization. "We are counting on the BPU to protect consumers and reject the higher rates that will surely come if they approve the companies bid," she added.
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QUICK LINK: Download the complete report (652K PDF).
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New Jersey Citizen Action is the state's largest, independent citizen watchdog coalition. NJCA works to protect and expand the rights of individuals and families and to ensure that government officials respond to the needs of people rather than the interests of those with money and power.
