The Times, Trenton

Settlement To Lift Basic Phone Rate

The Times of Trenton — Saturday, June 7, 2008

BY TOM JOHNSON
Newhouse News Service

Bare-bones local phone service for about 1 million Verizon New Jersey customers could nearly double in price over the next three years under a tentative settlement between the telecommunications giant and state regulators.

The basic phone service – nothing more than a dial tone and unlimited local phone calls – could rise to $16.45 per month, from $8.95, over three years, according to the draft settlement negotiated by Verizon, the staff of the state Board of Public Utilities and the New Jersey Division of Rate Counsel. New Jersey has the lowest rate in the nation for basic phone service.

If approved by state regulators, the deal would give Verizon its first increase in basic residential phone service since 1985, but would retain regulatory oversight, authority state officials did not want to forfeit.

Last fall, Verizon petitioned the state to declare basic phone service competitive. If regulators had agreed, the company would have been free to raise its rates without state approval.

"I think it is a fair deal for the ratepayer," New Jersey Ratepayer Advocate Stefanie Brand said. "It makes sure people who just want basic phone service will continue to be protected."

Verizon said the settlement calls for a moderate and phased-in increase in basic rates, which have gone virtually unchanged in New Jersey for more than 20 years – since a time when gas was $1.20 per gallon and a postage stamp cost 20 cents.

"Even with the increase, Verizon's basic rates in New Jersey will still be considerably below the national average," said Ava-Marie Madeam, vice president of government relations for Verizon.

The proposed settlement, she noted, does not raise rates for more than 100,000 low-income and disadvantaged residents who pay anywhere from nothing to $1.95 per month for basic service.

New Jersey Citizen Action, which had opposed Verizon's initial application, said the group was happy the parties agreed to maintain regulatory oversight of basic phone service.

"Nationwide, it's being deregulated," said Atif Malik, a Citizen Action organizer.

There will be a hearing on the settlement June 24, and the BPU expects to render a decision sometime in July, a spokesman said.

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