Verizon seeks approval to raise basic phone rate by 75%

By Peter Lewis
Times consumer-affairs reporter

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The monthly charge for a residential line would rise by $9.80 a month, to $22.80 from $13. The monthly charge for an unlisted number would zoom to $2.50 from 55 cents.

Basic phone service would also go up for businesses, to $39.50 from $29.70, a 33 percent boost.

The proposed rates must first be approved by the state Utilities and Transportation Commission (UTC).

Steve Banta, Verizon Northwest region president, said the company's rates no longer cover the cost of providing service in today's competitive market. That is, a growing number of people are turning to cellular phones, e-mail and voice calls over the Internet to communicate, he said. As a result, Verizon has lost customers and revenue.

But Simon ffitch, an assistant state attorney general who represents consumers before the UTC, said the proposed increases would be "rate shock by any definition and are an unwelcome blow for household and small-business budgets alike." He predicted Verizon would have a tough time proving its $110 million request is justified.

Glenn Blackmon, the UTC's acting director of regulatory services, said the commission staff was still digesting Verizon's request and analyzing the company's finances. "We don't believe that Verizon is in as bad a financial shape as they claim they are," he said.

To comment Dates and locations of public hearings have yet to be set, but customers can e-mail the Washington Utilities and Transportation Commission at comments@wutc.wa.gov. More information on Verizon's new filing is available at www.wutc.wa.gov/telecom

Verizon is the second-largest phone company in the state, serving 850,000 lines, primarily in the Puget Sound area but also in parts of Eastern Washington. Qwest, which has more than 2 million lines, charges $12.50 a month for residential service and $26.89 for business.

In April, Verizon told the UTC it would seek $240 million in new revenue, so yesterday's filing represents a $130 million cut. Verizon spokesman Kevin Laverty said the company is not giving up on the full amount — just waiting until state regulators have first had a chance to review the $110 million request.

In addition to requesting higher basic rates, Verizon proposes to eliminate free directory-assistance calls. Currently, residential customers are entitled to two free per month, and business customers to one, after which the charge is 95 cents per call.

The filing also would increase residential rates for call waiting by 54 percent, to $5 from $3.25 a month, and raise call forwarding by 43 percent, to $4 from $2.80 a month.

"Obviously," ffitch said, "for customers who use those services, those are overwhelming increases."

In its April filing, Verizon claimed it was losing money in Washington state and sought an "emergency" rate increase of $3.54 a month for residential and business customers. The UTC is handling that request on an expedited basis, with a decision likely in the fall.

If the $3.54 increase is granted, it would go toward the $9.80-a-month jump Verizon is seeking as part of the larger rate case, which the UTC isn't expected to decide until next spring.

Yesterday, ffitch said it was "striking" that Verizon has trimmed its request by $130 million. He suggested it was "an acknowledgement that they would have had a very hard time proving the $240 million revenue increase. ... It can't help but raise some questions about the underlying soundness of their financial justifications."

AARP also took a shot at Verizon's latest proposal.

"This is a massive increase, and it will hit many older customers the hardest," said AARP Washington state director Doug Shadel. "Verizon simply cannot ask people living on a fixed income to absorb a 75 percent rate hike. For the elderly, the telephone line isn't a luxury. It's a lifeline."

Peter Lewis: 206-464-2217 or plewis@seattletimes.com

Copyright © 2004 The Seattle Times Company

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