Office of the Ohio Consumers' Counsel

Media Center

Plan would likely raise ALLTEL & Western Reserve customers' rates for telephone features

Columbus, Ohio - September 20, 2004 - A plan that ALLTEL and Western Reserve telephone companies are seeking to have approved by state regulators could increase the rates of dozens of services and features at a time when their residential customers have no choice of local telephone providers, the Office of the Ohio Consumers’ Counsel (OCC), the residential utility advocate, said today.

The OCC will oppose the plan in comments to be filed later today at the Public Utilities Commission of Ohio (PUCO) and will ask the PUCO to protect consumers’ rates.

“If the plan is allowed by the PUCO, residential customers of both ALLTEL and Western Reserve could see significant price increases on commonly used services while still having no choice of local telephone providers,” said Janine Migden-Ostrander, Consumers’ Counsel. “At a time when many residents are trying to stay within a budget, they may be left to pay higher rates or forced to drop features altogether. This is unfair.”

The plan would allow ALLTEL and Western Reserve telephone companies to operate under "elective alternative regulation," which caps the price of basic local service while giving the company the ability to raise the rates of features like Call Waiting and Caller ID with Name. For example, these companies could raise the prices of Three-Way Calling and Call Forwarding immediately and without limit. After two years under the plan, ALLTEL and Western Reserve could raise the price of Call Waiting by 10 percent per year until its price reaches double what customers pay today.

Another local telephone company – Sprint – has used alternative regulation to impose increases of as much as 60 percent on several services and features since October 2002 when it began operating under the same plan.

ALLTEL and Western Reserve filed their requests for elective alternative regulation with the PUCO on August 30. Unless the PUCO acts by October 15, the plan will be approved automatically.

Elective alternative regulation allows local telephone companies to raise rates for commonly used features without any review while agreeing to cap the rates of basic local service and basic Caller ID. The OCC believes only companies whose customers have local telephone choices should be eligible for elective alternative regulation.

“Approval of this plan would leave consumers without the protection of price increase reviews or the promise of lower rates that a competitive market may be able to provide,” said Migden-Ostrander.

About the Office of the Ohio Consumers' Counsel

The Office of the Ohio Consumers' Counsel (OCC), the residential utility consumer advocate, represents the interests of 4.5 million households in proceedings before state and federal regulators and in the courts. The state agency also educates consumers about electric, natural gas, telephone and water issues and resolves complaints from individuals. To receive utility information, brochures, schedule a presentation or file a utility complaint, residential consumers may call 1-877-PICKOCC (1-877-742-5622) toll free in Ohio or visit the OCC website at www.pickocc.org.