CPT's Recent Comments
Becomes Intervenor
In Maryland Proceeding
On July 29, 1996 the Maryland Public Service Commission granted CPT's
request to intervene as a party in the ISDN rate proceeding. CPT will be
aggresively pursuing its goal of obtaining reasonable ISDN rates for
consumers by presenting expert testimony on the cost of providing ISDN,
offering data on rates (some of which have been filed voluntarily) in
other states, and debunking inflated cost studies presented by Bell
Atlantic. Actual hearings will begin on November 25 and
continue if
necessary through the 27th. We are trying to intervene in all
Bell Atlantic regions in order to combat its unreasonable and unacceptable
ISDN rate proposals.
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The New Jersey Division of Ratepayer Advocate ("NJRA") refused to accept
BA's proposed tariff. The NJRA found that the tariff was "out of line
with both the costs of providing ISDN service and the retail rates charged
by [RBOCS] and other exchange carriers in other states." The NJRA took
the position that ISDN should "be viewed as the POTS plain old telephone
service of the Information Age." As such, the following pricing scheme,
which was considered by the NJRA to be well above BAs
costs, was suggested:
$ 10.00--Monthly recurring
cost
Per minute usage (2B + D)
$ 00.0025/minute--Peak hours
$ 00.00125/minute--Non-peak
$ 3.50--Subscriber Line Charge
$ 13.50 plus usage fees--Total after SLC
While we are generally opposed to full measured usage approaches to ISDN
pricing (due to the highly non-linear structure of network costs which
depend upon large fixed costs and a "build-out" for peak use), it is not
unreasonable to adopt a fee schedule which requires some users to pay
more than others based upon usage. This measured approach is not
objectionable so long as the fees for usage do not greatly exceed the
costs of providing the service.
The NJRAs proposal is a much better approximation of these costs than are
BAs tariffs. Moreover, the NJRAs proposal is only an interim measure,
subject to refund, to be adjusted after hearings on BA's costs. Under the
NJRA proposal, a consumer who used 70 hours of 2B service, half in peak
and half in off-peak, would have a monthly bill of $21.38, higher than the
flat rate for at least one other telephone company, but only about
one-third the $63.50 price of the BA "call pack" that would permit 70
hours of 2B service.
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The Texas
Telecommunications Journal recently ran an article detailing
an ISDN rate case in Texas. Not only did the PUC require a flat rate of
$40 per month, less than one-half of what GTE requested, but it is also
considering imposing sanctions on GTE. The PUC believed that GTE failed
to carry its burden in the proceeding of proving its cost claims and had
committed various acts of intransigence and procedural misconduct.
Note that GTE couldn't justify a $100 flat rate, yet Bell Atlantic is
attempting to support its flat rate offering of $249.
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The Delaware Commission recently imposed the most reasonable ISDN rates
in Bell Atlantic's region, closely tailoring the tariff to the
cost of providing ISDN. We have posted for your review both the
Hearing Examiner's
Order as well as the Delaware Commission's
Final Order.
Consider the following sample from the Hearing
Examiner's Order, Paragraph 66:
Staff explained
that BA-Del's upgrade to SS7 switch technology was a generic type of
upgrade which would have occurred whether or not they chose
to offer R-ISDN service. Thus, costs associated with the
implementation of SS7 technology are not incremental to the
provision of R-ISDN service and should not be included in an
incremental cost analysis.
Bell Atlantic wants to include as many costs as possible--whether or not
they are related to providing ISDN--in its proposed tariff to increase
what it can charge. The Hearing Examiner's decision does a good job of
debunking Bell Atlantic's spurious cost claims.
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On
Wednesday July 3, 1996 the Maryland Public Service Commission
overruled its own Staff recommendation and will conduct a
full investigation into Bell Atlantic's ISDN Rates. Ann Dean, the PSC
Staffer charged with evaluating Bell Atlantic's ISDN proposal, apparently
felt the less information available to consumers about the actual cost
of
providing ISDN, the better. Ms. Dean advocated that the marginally
reduced rates she proposed (the contribution levels--the amount paid to
Bell beyond its costs--were lowered, but the largest part of the rates--the
claimed costs of providing ISDN--were left unquestioned) be implimented
with no rate investigation in complete reliance upon the cost data
supplied by Bell Atlantic. Fortunately, the Commission saw the
benefit of shining a little sunlight on this area.
The Commission
accepted the Staff's reductions to the proposed interim rates and made them
effective as of July 3, but they are likely to be further reduced pending
the outcome of the full rate hearing. This was a great victory for CPT
and Maryland consumers and evidence that vocal participation in the
process yields results. Over 50 people submitted email comments to the
MD PSC and the Commission responded by ordering a rate investigation. All the email
comments are available for your review.
Wednesday's public hearing was
before a full house. In addition to CPT, numerous Maryland consumers and
several internet service providers addressed the Commission expressing
outrage at monopolist Bell Atlantic's obvious attempts to cash in with
excessive ISDN fees. CPT will be involved as a direct participant in the
Maryland Rate
Hearing and we encourage you to make your voice heard for reasonable ISDN
rates. We'll keep you posted on any new developments.
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On Tuesday June 18, 1996, the Delaware Public Service Commission ruled
against Bell Atlantic's tariff proposal and approved a flat rate of
$28.02 per month. The rate INCLUDES
the current tariffed rates for residential dial tone, unlimited
residential local usage, and touch tone. The actual rate appearing in the
tariff for just the ISDN service will be $12.92 per
month. The tariff breaks down into the following component parts:
$ 9.40--Cost of dialtone (POTS)
$ 0.60--Touch Tone Service
$12.92--Upgrade to ISDN line
$ 1.60--Fee for Unlimited Usage
$24.52--Total Before SLC
$ 3.50--Subscriber Line Charge
$28.02--Total After SLC
$24.52--Total Before SLC
$ 3.50--Subscriber Line Charge
$28.02--Total After SLC
This is the first
commission decision on BA's ISDN offering, and it is a huge victory.
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Check out
CPT's Comments Filed in
the Maryland Proceeding
or review
CPT's NJ Comments
which include some new flat rates applicable in other areas.
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