Public Advocate Files Appeal To Stop
Telecom Deregulation Decision

Advocate Fears Higher Rates

Newark, N.J.—New Jersey Public Advocate Ronald K. Chen today announced the filing of an appeal to reverse the Board of Public Utilities’ (BPU) order that would essentially deregulate local phone service to an estimated 585,000 New Jersey customers.

The board’s June order removes its authority to regulate rates, terms and conditions of phone service for the state’s 130 competitive local exchange carriers (CLECs), including companies such as AT&T, Cablevision and Comcast. Chen is asking the Appellate Court to reverse that decision. Approximately 585,000 New Jersey ratepayers were using CLEC services as of July 2006. A competitive local exchange carrier (“CLEC”) is a telecommunications provider company that generally competes with already established carriers (e.g. Verizon). 

“If this decision is left to stand, the competitors to Verizon will be free to charge whatever they want and the board will be unable to regulate phone services,” said Chen. 

Chen said the Department of Public Advocate’s Division of Rate Counsel filed the appeal in response to the BPU decision on June 29, 2007 that reclassified New Jersey’s CLECs, “as competitive.” Under state law, the BPU can deregulate a service if it finds sufficient competition in the market. The BPU opened an investigation on whether CLECs should be reclassified in December.

Less than 10 percent of the registered 130 CLECs in New Jersey elected to participate in the BPU’s proceedings examining deregulation, Chen noted

“The only substantive evidence in the record on actual CLEC services provided in New Jersey is a paltry representation of nine CLECs despite the fact that this order deregulates 130 CLECs,” Chen said. “Many of these CLECs provide services in very small and defined areas. The presence of a competitor in Lodi is meaningless to a consumer in Asbury Park.”

Under Appellate Court procedure, the Division of Rate Counsel will file a brief 45 days after the BPU files a statement of items comprising the record on appeal with the Appellate Division.
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The Division of Rate Counsel is a division within the Department of the Public Advocate and represents the interests of consumers of electric, natural gas, water/sewer and telecommunications and cable TV service.Additional information on this and other utility matters can be found at the Department’s website at www.njpublicadvocate.gov.