State of New Jersey

STATE OF NEW JERSEY
Division of The Ratepayer Advocate
31 Clinton Street, 11th Fl
P. O. Box 46005
Newark, New Jersey 07101

Press Release

For Immediate Release
Thursday, June 26, 2003

For Further Information
Contact: Tom Rosenthal
Tel: 973-648-2690

Ratepayer Advocate Seema M. Singh Calls on FCC
To Protect Consumers’ Freedom of Choice
In Picking Local and Long-Distance Phone Service

Newark, NJ -- In a case with significant implications for all telephone customers nationwide that has received little public attention, Ratepayer Advocate Seema M. Singh is calling on the Federal Communications Commission (FCC) to uphold consumers’ freedom of choice by barring telecommunications companies from requiring subscribers to purchase both local and long-distance service.

The New Jersey Ratepayer Advocate has taken the lead among state consumer agencies and non-profit advocacy organizations in asking the FCC to rule that the practice of requiring customers to purchase services they do not want violates federal telecommunications law and should be prohibited.

In comments filed with the FCC on June 5 and again last Friday, Ms. Singh objected to the practice by the nation’s largest telephone companies of requiring customers to purchase long-distance service in order to obtain local service, which is called bundling local and long-distance services.  Ms. Singh said bundling denies ratepayers the right to purchase only the services they want and prevents them from controlling the costs of their telephone bills.

Ms. Singh wrote that telephone companies were barring consumers from choosing the “PIC-NONE” option, which enables ratepayers to pick no long-distance service when they purchase local service from the carrier.  The Ratepayer Advocate maintains that consumers have the right under the Telecommunications Act of 1996 to purchase local service from one company and to purchase long-distance service from another. 

The case arose when telecommunications companies began prohibiting consumers from buying only local service and required them to purchase, or bundle, both local and long-distance services.  The companies claimed that mandatory bundling did not violate federal telecommunications law.

“The forced bundling of local and long distance services is an unjust and unreasonable practice,” the Ratepayer Advocate stated in reply comments to the FCC filed Friday.  “A customer who wants local service only cannot be denied the option to select no long distance carrier, i.e. ‘PIC-NONE.’”

Responding to the telephone companies’ claims in comments to the FCC that forced bundling does not violate federal communications law, Ms. Singh stated, “The Ratepayer Advocate is troubled by the other commenters’ disregard of consumers right to choose only the services they want and their uniform position and support for forcing customers to purchase bundles which may contain services consumers do not want.”

Ms. Singh said that this practice is directly at odds with and conflicts with the intent of the Telecommunications Act of 1996, which was intended to give more choice, lower prices and technical innovation to consumers.

“The lockstep action of carriers that forces consumers to take bundled services has the direct effect of raising the price consumers must pay to get telephone service,” Ms. Singh said.  “While this may be beneficial to carriers by forcing the average bill to increase, such actions are detrimental to consumers who want only a plain old telephone service.”

The Ratepayer Advocate’s comments filed on June 5 and the reply comments filed on June 20 are attached.

The Ratepayer Advocate’s comments filed on June 5

The Ratepayer Advocate’s reply comments filed on June 20

The Division of the Ratepayer Advocate represents the interests of all utility consumers--residential, small business, commercial and industrial.  The Ratepayer Advocate is a party in every proceeding in which New Jersey businesses and utilities seek changes in rates or services.  The Ratepayer Advocate also participates on behalf of consumers in setting long-range energy, water and telecommunications policies that affect the delivery and costs of utility services.

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