| State of New Jersey
Department Of The Public Advocate
240 West State St.
P.O. Box 851
Trenton, NJ 08625-0851
Phone: (609) 826-5090 Fax: (609) 984-4747
JON S. CORZINE
For Immediate Release:
July 11, 2008
RONALD K. CHEN
STEFANIE A. BRAND
For Further Information
Rate Counsel Negotiates Agreement Maintaining Regulation of Verizon’s Basic Telephone Service
Rate caps, continued free 411 service and protections
for low-incomes included
Newark, N.J.— Public Advocate Ronald K. Chen today hailed as a victory the agreement with Verizon New Jersey Inc., to maintain regulation of basic local telephone rates and service. The agreement, which was approved today by the Board of Public Utilities (BPU), also freezes rates for certain services designed to protect people with disabilities, as well as low-income and senior citizens.
“This agreement protects New Jersey ratepayers who only use basic telephone service from the price increases that would inevitably come from deregulation,” said Chen. “While the agreement allows limited increases over the next three years, it maintains price caps and regulation of basic rates and service quality by the BPU. The free market would not have provided ratepayers with these protections,” he added.
Verizon NJ petitioned the BPU to declare all of their services competitive. Under state law, the Board can deregulate a service if it finds sufficient competition in the market. Rate Counsel fought that request, arguing that residential and small business consumers do not have a real choice when choosing basic phone service. The agreement keeps regulation of residential and single-line business rates intact, and allows Verizon’s first increases for these services since 1985 – phased in over a three-year period. It also maintains Board regulation of service quality and freezes rates for certain programs designed to protect low income and senior citizens and persons with disabilities.
"I recognize that in these difficult economic times any rate increase is hurtful, and I don't want to sugar coat the increases that are included as part of this settlement. But we have managed to keep those increases to below the rate of inflation, and the basic rates are still below the national average for basic telephone service. And we have successfully negotiated a rate freeze for essential services for our most vulnerable constituents – low income and senior citizens," Chen added.
Stefanie A. Brand, director of the Division of Rate Counsel, said: “This is a key victory for New Jersey’s ratepayers who are already struggling to pay their bills. The agreement keeps rates well below the costs in neighboring states and maintains a regulatory safety net for those who need it most.”
Among the highlights included in the Verizon NJ agreement are:
- Continued Rate Regulation of Basic Services. For Verizon consumers, residential basic exchange service, single-line business basic exchange service, non-recurring charges for installation of residential service and residential directory assistance service remain rate regulated. The company cannot charge more for these services than the authorized rate caps, under the terms of the agreement.
- Service Quality. Verizon’s service quality obligations remain unchanged and subject to BPU oversight.
- Rate Caps for the Duration of the Agreement. Verizon cannot charge more than $11.95 per month during the first year; not more than $14.45 per month during the second year and not more than $16.45 per month during the third year for basic residential service. Verizon may increase rates for single-line business customers no more than $3.50 per month for each year of the agreement. Residential installation costs may increase from $42 to $45 the first year, but not more than $2.50 per year for the remainder of the agreement.
- Social Service Programs and Discounts. Verizon NJ will continue social services programs, such as the Link-Up America program, which provides discounts on service connection charges for qualified low-income customers, at current rates. Also, any increases to Verizon NJ’s residential basic local exchange service are not applicable to customers of Verizon NJ’s Lifeline Program, which provides local service at a discount, based on income eligibility. Lifeline will remain at current rates ($0.00 to $2.19 per month) and can only be increased with Board approval. Customers who have obtained a court order of protection will receive unpublished numbers at no charge.
- Consumers with Disabilities. Verizon will continue to provide a 25 percent discount on local message units and intrastate intra-LATA message charges for hearing-impaired persons and free Directory Assistance calls for consumers with a visual or physical impairment. Repair priority will be given to consumers with serious illness or physical disability.
- Residential Directory Assistance Service. Callers shall receive two free calls per month. Rate caps will apply to additional calls - $1.25 for the first year, $1.50 for the remainder of the agreement.
The agreement is available upon request.
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 Division’s website at www.state.nj.us/publicadvocate/utility. The Department of the Public Advocate website is http://www.njpublicadvocate.gov.