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Verizon not allowed to raise Chesapeake phone rates

Published 10:20pm Saturday, March 21, 2009

CHESAPEAKE — Sorry, wrong number. That’s what Verizon heard when it tried to raise its telephone rates in Chesapeake.

On Wednesday, the Public Utilities Commission of Ohio denied Verizon’s request for alternative regulation for the Chesapeake area. The phone company had wanted the regulations changed in 24 exchanges in the state. However, PUCO puts thumbs down to that for the Chesapeake, Portsmouth and Jackson markets. It did approve it for the other markets sought in the state.

“It is good news for the three exchanges, but not for the other 21,” Ryan Lippe, spokesperson for the Ohio Consumers Counsel, said. The OCC had fought the changes for months, making its case before PUCO.

At the time of Verizon’s initial request, spokesperson Lee Giercyznski had said the phone company was wanting a level playing field as the phone company faced competition from instant messaging, wireless service, cable companies and Internet-based phone providers.

In the phone industry, alternative regulation allows any utility to increase its rates at will without getting PUCO approval beforehand. If that is granted, it doesn’t mean phone rates automatically go up. Simply, the utility has that option without going before the PUCO.

That could translate to $1.25 a month increase on its basic local rate and a monthly price hike of 50 cents for basic Caller ID.

Normally, when a utility wants a rate hike, it must go to the commission each time it wants an increase to prove why that is justified.

However, with alternative regulation as long as the utility can prove it functions in a competitive environment and that there is no barrier to entry of other competitors, it can act at will.

“The counsel presented evidence that 22 of the 24 failed to meet a competitive test. Truly there were not competitive choices for just plain basic local telephone service,” Lippe said. “We have had some wins. Every time we win, it is good for the residential customers.”

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