Asbury Park Press

Verizon Gets NJ To Drop Basic Phone Regulation

Asbury Park Press — Wednesday, May 20, 2015

By David P. Willis
Press on Your Side

Do you think Verizon New Jersey faces competition for its basic, bare-bones telephone service?

The state Board of Public Utilities thinks it does. On Tuesday, state regulators voted 4-0 to deregulate the prices for basic telephone service and impose price caps for the next five years. "There is marketplace competition," BPU President Richard Mroz said.

But opponents called the BPU's decision a mistake. And seniors could pay more because of it, according to an AARP representative.

"We believe this is a bad decision that could cause harm to hundreds of thousands of seniors in New Jersey who depend on affordable and reliable plain-old telephone service as their lifeline to their family, the medical providers, to first responders," said Evelyn Liebman, associate director for AARP New Jersey.

The board's staff cited customers' ability to buy cable telephone service throughout Verizon's territory in the Garden State, the presence of four wireless carriers, and numerous competitive local carriers who are offering service to New Jersey residents.

The result: a lift of rules that govern the pricing of basic residential telephone service, single-line business service, residential service connection charges and directory-assistance service.

Verizon's rates for basic telephone service, $16.45 a month for unlimited local calling in a customer's immediate area, are among the lowest in the nation. It does not involve Verizon's regional calling, long distance or FiOS services, which are already subject to possible price changes.

Lifeline service, a federal program that provides discounted local telephone service to the poor for $1.95 a month or less, is not affected.

36.5 percent increase

The board, in approving a deal between its staff and Verizon, imposed rate caps on basic residential service rates for the next five years with the limits eliminated afterward. The basic rate for phone service could rise up to $1 each year for the next four years and up to $2 in the fifth year, representing a maximum 36.5 percent increase over the five-year period.

But true competition "doesn't exist" when it comes to affordability and reliability, said Leibman of AARP New Jersey. "Simply because there are other mechanisms to communicate whether it be satellite, FiOS or wireless doesn't mean there's a competitive market for basic telephone service."

Verizon said the services are competitive, as is the telecommunications marketplace, which has benefited consumers.

"Robust competition for communications services keeps prices in check and gives consumers the leverage to choose the provider that best meets their service needs," said Leecia Eve, Verizon vice president of state government affairs, in a statement. "By reclassifying Verizon's last remaining mass-market retail services as competitive, the BPU ensures that consumers will reap the benefits of a truly competitive marketplace for telecommunications services."

Fewer than 10 percent of households in Verizon's coverage area with copper line telephone service are affected by the BPU's action, the company said.

Critics pan deal

Opponents lined up to criticize the deal.

Stefanie Brand, director of the state Division of Rate Counsel, said she was "disappointed" by the board's decision. She said her office, which represents ratepayers in cases before the BPU, was not told of or involved in the BPU staff's settlement with Verizon.

The competitive and marketplace information used by the board's staff is several years old, Brand said. She was hoping the board would give time to update the record.

"I think it's probable that we will appeal," Brand said.

Ann Vardeman, program director at New Jersey Citizen Action, said the settlement was a "backroom deal without public comment."

"It's going to be bad for consumers," she said. "It's going to disproportionally hurt the elderly, the disabled and the poor and people in rural areas."

"Today's back room deal is bad for seniors, bad for workers at Verizon, and bad for the millions of businesses and homes that rely on affordable, reliable phone service," said Seth Hahn, the New Jersey legislative and political director for the Communications Workers of America, the union that represents Verizon workers. "In fact, it's bad for everyone in New Jersey except Verizon."

Top Top | NJCA in the News | NJCA Homepage