EXECUTIVE SUMMARY OF TESTIMONY OF BARBARA R. ALEXANDER
Filed May 15, 2001, BPU Docket No. TO01020095

Re: I/M/O Application of Verizon New Jersey For Approval of Alternative Form of Regulation and to Reclassify Multi-line Business Services as Competitive

PURPOSE OF TESTIMONY: To respond to Verizon-New Jersey’s recommendations with respect to Service Quality standards proposed in its Modified Plan for an Alternative Form of Regulation and propose additional Service Quality standards going forward.

• New Jersey has not adopted specific statewide or generic customer service and reliability performance standards applicable to service quality and reliability provided to retail telecommunications customers.
  

• If there is no direct link between the earnings allowed under an alternative rate plan regime and the measurement and monitoring of service quality, the Board will have tied its own hands, severely limiting its ability to respond to a deterioration of service quality.

• The Board is required to review any application for a PAR in light of its potential impact on service quality. The current PAR includes a service quality reporting plan that requires the Company to submit quarterly reports to the Board on the service quality performance for twelve different performance areas or metrics in varying geographic regions and customer classes. An analysis of Verizon-NJ’s performance to date under the current service quality provisions is provided.

• The Ratepayer Advocate recommends that the Board make several significant changes to the current service quality index (SQI) in the areas noted below:

Installation of Service: The SQI should continue to track installation timeliness and whether Verizon-NJ keeps installation appointments made with its customers. The Commitments Met performance area should also be continued if it measures the percentage of appointments for the installation of local exchange service that is met by the Company and not missed due to Company reasons.

Maintenance of Service: With only one change, the Ratepayer Advocate recommends that the current three performance areas be included in the revised SQI and a fourth should be added. If our recommendations are adopted, this area will track Customer Trouble Report Rate, Out of Service (OOS) Cleared within 24 Hours, Average Local Service Repair Interval for Repeat Trouble Reports (residential), and Commitments Met to Clear Troubles.

Network Reliability: The Ratepayer Advocate recommends that the Board discontinue tracking the two Calls Completed performance areas and retain the Dial Tone Speed performance area with a change to reflect the actual performance itself. Additionally, since the current SQI does not track customer outages at all, we recommend a new metric to reflect the frequency of customer outages based on the approach adopted by the Public Service Board in Vermont when it adopted a stipulated SQI for Verizon-Vermont.

Access to Verizon: This category should track the Company’s actual call center performance for both the Business Offices and the Repair Centers that serve New Jersey customers. The Busy Signal for both centers should also be tracked to prevent the Company from increasing the busy signal to reduce the average hold time for customers who do get through. Finally, the Board should include State Customer Complaints (per million residential customers) in the SQI as an objective measurement of customer satisfaction with Verizon-NJ’s service.

• The Ratepayer Advocate recommends that the SQI include pre-established penalties or mandatory customer restitution for the failure to maintain the baseline performance standards in any year. Under our proposal, approximately 4% of Verizon-NJ’s intrastate jurisdictional revenues would be at risk for the failure to maintain adequate service quality. Based on the Company’s jurisdictional revenues of about $2 billion, this would amount to a maximum penalty of $77 million.

 

• The Board’s final order in this proceeding should recognize the need to clearly distinguish between the activities of the incumbent local services provider and those of any Verizon affiliate that will compete with other CLECs on a level playing field. The Ratepayer Advocate’s recommendations are modeled on those already adopted by the Board for electric and natural gas competition.
  

• Verizon-NJ should be required to educate customers about their right to choose a competitive provider of local exchange and toll services, provide the customer with either a complete or randomly generated list of licensed CLECs that offer services in the customer’s area, and refrain from using this communication to market competitive service products sold by its affiliates.
  

• The Board should require Verizon’s affiliates to make the same disclosures that an electric or natural gas affiliate must make to assure that customers understand the difference between the incumbent local exchange provider and the competitive affiliate when the latter uses a name or logo similar to Verizon-NJ.
  

• Certain practices should be prohibited by the Board., such as:

1. "hot" transferred calls between Verizon-NJ customer service personnel at the Business Office and any Verizon affiliate;

2. joint marketing with its affiliates; and

3. sharing of facilities or employees between Verizon-NJ’s customer service functions and its affiliates that market competitive and optional services.

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