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

Thomas H. Weiss is a Registered Professional Engineer with over thirty years of experience in the communications industry. Mr. Weiss has presented expert testimony on communications engineering matters in both Federal and state courts, and is recognized for his expertise on economic and regulatory issues.

On behalf of the Division of the Ratepayer Advocate ("Ratepayer Advocate"), Mr. Weiss examined how schools and libraries throughout the state can employ modern telecommunications products and services. Mr. Weiss reviewed the terms of the price discounts that Verizon New Jersey ("VNJ") makes available to schools and libraries for their use in purchasing data transport channels, as well as the VNJ network over which the services are provided. Mr. Weiss found that schools and libraries in the state are often economically unable to take advantage of the Opportunity New Jersey ("ONJ") program, as modified by the additional requirements of Access New Jersey ("ANJ") program. These programs, instituted in 1993 and 1997, respectively, represent a plan to accelerate the deployment of advanced switching and transmission technologies so as to enable Advance Intelligent Network ("AIN") and the full range of digital bandwidth service capabilities (narrowband, wideband, and broadband). The 1997 ANJ agreement represents a further acceleration of the 1993 ONJ goals, with ratepayer benefits estimated to total in excess of $175 million. $130 million of those benefits pertain to network enhancements designed to accrue mainly to schools and libraries in the state.

In this case, VNJ is proposing to continue the benefits of the ANJ program for schools and libraries by: extending the availability of discounted data transport services to 2004; by expanding the fund for CPE by approximately $14 million, and; by adding some $6 million of commitment to support video services.

In his testimony, Mr. Weiss finds that while approximately 98 percent of all New Jersey schools currently have some form of access to the internet, only about 50 percent enjoy such access at wideband or broadband rates -- rates that would permit the transmission of virtual full motion interactive video signals This is unacceptable, given the fact that VNJ has deployed technology sufficient to enable wideband access or better to reach all schools in the state. Even under the discounted prices at which VNJ currently offers schools and libraries access to data services, it is difficult for the state’s schools and libraries to budget the funds that would be necessary to achieve this goal. In fact, Mr. Weiss finds that the services most frequently needed by schools exhibit the smallest percentage discount.

As described in Mr. Weiss’s testimony, the Ratepayer Advocate recommends an increase in the discounts at which schools and libraries have access to data transport. Such action would go a long way toward lowering the economic barrier to expanded access by schools and libraries. Mr. Weiss recommends that the New Jersey Board of Public Utilities ("Board") emphasize increasing the levels of discounts applicable to all of the data transport services currently and most frequently used by schools and libraries, with particular emphasis on the prices charged to schools and libraries for the services that are best adapted to the video applications.

Given the current size of the schools and libraries market for discounted services, the estimated additional value of the Ratepayer Advocate proposal is approximately $3.0 million annually – a 24 percent increase in the value of the discount program. Further, Mr. Weiss finds that, based on the incremental cost of these offerings, the Board would not be forcing Verizon to offer discounted services to schools and libraries at a loss.

The implementation of the Ratepayer Advocate’s recommendations should assist schools and libraries in becoming valuable additional extensions of the information age learning experience.

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