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Coalition Challenges Deregulation Of Local Phone Services

Home News Tribune — Friday, May 2, 2008

By TOM BALDWIN
Gannett State Bureau

TRENTON — A coalition led by government watchdog New Jersey Citizen Action Thursday asked the state Board of Public Utilities to reject a request by phone companies Verizon and Embarq to deregulate local services.

Citizen Action and its allies said a lack of competition in the local phone market would send monthly rates soaring from $9 to $30, but a spokesman for Verizon said the basis for that contention was shallow and riddled with holes.

Jim Walsh of Citizen Action, with backing from the state's public advocate, said, "While this might be good for Verizon New Jersey's shareholders, this is not good for New Jersey consumers.... The BPU must reject Verizon New Jersey's and Embarq's petition."

Walsh said deregulation would kick rates up by 335 percent.

"They have filed. Hearings have been held. The record is currently under review. We anticipate a decision in June," said Board of Public Utilities spokesman Doyal Siddell.

Siddell said he stressed the word "anticipate," suggesting the ruling may come later.

Stefanie Brand, director of the Division of Rate Counsel in the Department of the Public Advocate, said, "We have actually opposed it (the request) quite rigorously, and we put on record that our opinion demonstrates there is no competition for basic local phone service. And we are fighting very hard for the Board of Public Utility's oversight."

Stephanie Meisse, a spokeswoman for Embarq, said she could not comment because she had not heard about the developments.

Verizon spokesman Rich Young said, "We looked at the study (cited by Citizen Action), and we believe the study is shallow, shortsighted and full of holes.... We are asking the board to look at marketplace realities."

Young added, "It's laughable to think Verizon will be able to charge anywhere near $30 a month."

He said some low-income residents get local service for free, and others pay a mere $1.95 a month.

In a February news release, Brand said, "If approved, deregulation will likely result in higher rates, a significant burden for those with low or fixed incomes who are struggling every day to pay for the bare basics of telephone service."

Brand also said in February, "The greatest damage will likely befall seniors, families on fixed incomes, and low-income residents, but any residential customer who seeks to purchase local telephone service at affordable rates will be affected."

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