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  • CPT Becomes Intervenor In Maryland Proceeding
  • NJ Ratepayer Advocate Recommends
  • GTE Gets $40 Flat Rate and Threat of Sanctions
  • Delaware's Decisions
  • Domino Number Two? MD Holds Hearings
  • The First Domino Falls -- Delaware
  • CPT's Recent Comments


    Becomes Intervenor In Maryland Proceeding

    On July 29, 1996 the Maryland Public Service Commission granted CPT's request to intervene as a party in the ISDN rate proceeding. CPT will be aggresively pursuing its goal of obtaining reasonable ISDN rates for consumers by presenting expert testimony on the cost of providing ISDN, offering data on rates (some of which have been filed voluntarily) in other states, and debunking inflated cost studies presented by Bell Atlantic. Actual hearings will begin on November 25 and continue if necessary through the 27th. We are trying to intervene in all Bell Atlantic regions in order to combat its unreasonable and unacceptable ISDN rate proposals.

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    NJ Ratepayer Advocate Recommends Pricing at a Fraction of BA's Proposal

    The New Jersey Division of Ratepayer Advocate ("NJRA") refused to accept BA's proposed tariff. The NJRA found that the tariff was "out of line with both the costs of providing ISDN service and the retail rates charged by [RBOCS] and other exchange carriers in other states." The NJRA took the position that ISDN should "be viewed as the POTS plain old telephone service of the Information Age." As such, the following pricing scheme, which was considered by the NJRA to be well above BAs costs, was suggested:

    $ 10.00--Monthly recurring cost
    Per minute usage (2B + D)
    $ 00.0025/minute--Peak hours
    $ 00.00125/minute--Non-peak
    $ 3.50--Subscriber Line Charge

    $ 13.50 plus usage fees--Total after SLC


    While we are generally opposed to full measured usage approaches to ISDN pricing (due to the highly non-linear structure of network costs which depend upon large fixed costs and a "build-out" for peak use), it is not unreasonable to adopt a fee schedule which requires some users to pay more than others based upon usage. This measured approach is not objectionable so long as the fees for usage do not greatly exceed the costs of providing the service.

    The NJRAs proposal is a much better approximation of these costs than are BAs tariffs. Moreover, the NJRAs proposal is only an interim measure, subject to refund, to be adjusted after hearings on BA's costs. Under the NJRA proposal, a consumer who used 70 hours of 2B service, half in peak and half in off-peak, would have a monthly bill of $21.38, higher than the flat rate for at least one other telephone company, but only about one-third the $63.50 price of the BA "call pack" that would permit 70 hours of 2B service.

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    GTE Gets $40 Flat Rate and Threat of Sanctions

    The Texas Telecommunications Journal recently ran an article detailing an ISDN rate case in Texas. Not only did the PUC require a flat rate of $40 per month, less than one-half of what GTE requested, but it is also considering imposing sanctions on GTE. The PUC believed that GTE failed to carry its burden in the proceeding of proving its cost claims and had committed various acts of intransigence and procedural misconduct. Note that GTE couldn't justify a $100 flat rate, yet Bell Atlantic is attempting to support its flat rate offering of $249.

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    Delaware's Decisions

    The Delaware Commission recently imposed the most reasonable ISDN rates in Bell Atlantic's region, closely tailoring the tariff to the cost of providing ISDN. We have posted for your review both the Hearing Examiner's Order as well as the Delaware Commission's Final Order.

    Consider the following sample from the Hearing Examiner's Order, Paragraph 66:

    Staff explained that BA-Del's upgrade to SS7 switch technology was a generic type of upgrade which would have occurred whether or not they chose to offer R-ISDN service. Thus, costs associated with the implementation of SS7 technology are not incremental to the provision of R-ISDN service and should not be included in an incremental cost analysis.
    Bell Atlantic wants to include as many costs as possible--whether or not they are related to providing ISDN--in its proposed tariff to increase what it can charge. The Hearing Examiner's decision does a good job of debunking Bell Atlantic's spurious cost claims.

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    Domino Number Two?

    On Wednesday July 3, 1996 the Maryland Public Service Commission overruled its own Staff recommendation and will conduct a full investigation into Bell Atlantic's ISDN Rates. Ann Dean, the PSC Staffer charged with evaluating Bell Atlantic's ISDN proposal, apparently felt the less information available to consumers about the actual cost of providing ISDN, the better. Ms. Dean advocated that the marginally reduced rates she proposed (the contribution levels--the amount paid to Bell beyond its costs--were lowered, but the largest part of the rates--the claimed costs of providing ISDN--were left unquestioned) be implimented with no rate investigation in complete reliance upon the cost data supplied by Bell Atlantic. Fortunately, the Commission saw the benefit of shining a little sunlight on this area.

    The Commission accepted the Staff's reductions to the proposed interim rates and made them effective as of July 3, but they are likely to be further reduced pending the outcome of the full rate hearing. This was a great victory for CPT and Maryland consumers and evidence that vocal participation in the process yields results. Over 50 people submitted email comments to the MD PSC and the Commission responded by ordering a rate investigation. All the email comments are available for your review.

    Wednesday's public hearing was before a full house. In addition to CPT, numerous Maryland consumers and several internet service providers addressed the Commission expressing outrage at monopolist Bell Atlantic's obvious attempts to cash in with excessive ISDN fees. CPT will be involved as a direct participant in the Maryland Rate Hearing and we encourage you to make your voice heard for reasonable ISDN rates. We'll keep you posted on any new developments.

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    The First Domino Falls

    On Tuesday June 18, 1996, the Delaware Public Service Commission ruled against Bell Atlantic's tariff proposal and approved a flat rate of $28.02 per month. The rate INCLUDES the current tariffed rates for residential dial tone, unlimited residential local usage, and touch tone. The actual rate appearing in the tariff for just the ISDN service will be $12.92 per month. The tariff breaks down into the following component parts:

    $ 9.40--Cost of dialtone (POTS)
    $ 0.60--Touch Tone Service
    $12.92--Upgrade to ISDN line
    $ 1.60--Fee for Unlimited Usage

    $24.52--Total Before SLC

    $ 3.50--Subscriber Line Charge

    $28.02--Total After SLC

    $24.52--Total Before SLC

    $ 3.50--Subscriber Line Charge

    $28.02--Total After SLC

    This is the first commission decision on BA's ISDN offering, and it is a huge victory.

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    CPT's Recent Comments

    Check out
    CPT's Comments Filed in the Maryland Proceeding
    or review
    CPT's NJ Comments
    which include some new flat rates applicable in other areas.

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