Office of the Ohio Consumers' Counsel

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Customers' rates for telephone features could increase with Verizon plan

Columbus, Ohio - June 1, 2006 - A plan in which Verizon seeks state regulator approval could increase the rates consumers pay for several local telephone services at a time when there is a lack of competitive alternatives for residential customers, said the Office of the Ohio Consumers' Counsel (OCC) in comments to be filed later today at the Public Utilities Commission of Ohio (PUCO).

The OCC, the residential consumer advocate, has protested the plan because it is not in the public interest and has requested the PUCO to deny Verizon's application. Additionally, Verizon has ongoing problems regarding the quality of its service for consumers, related to delayed installation, missed appointments and outages, which need to be addressed before it is allowed the freedom to increase prices for commonly used services.

The OCC also is concerned that Verizon's proposal regarding Lifeline service, a low-income assistance program, violates the PUCO rules. For example, Verizon has not ensured that it will provide the maximum monthly discount so Lifeline customers can receive the most federal matching contribution to apply to their bill. The company also does not provide a toll-free fax number for customers to send in applications.

The plan, called "elective alternative regulation," would allow Verizon to raise the rates of features, like Call Waiting and Call Forwarding, as well as raise the prices of bundled packages that contain basic service and optional calling features. The OCC believes that a telephone company's eligibility for alternative regulation should be limited to circumstances where consumers can choose telephone service from among competing or alternative providers..

"Verizon has not met the required standards to be eligible for this plan," said Janine Migden- Ostrander, Consumers' Counsel. "Elective alternative regulation allows companies to increase rates of commonly used services if competitive choices or reasonable alternatives are available. Verizon customers have little choice in local telephone service and the company should not be allowed the luxury of pricing freedom."

Other telephone companies, like AT&T (formerly SBC), Embarq (formerly Sprint) and Windstream (formerly Alltel), have used alternative regulation to impose increases on several services and features under rules adopted in 2001.

Verizon, which provides service to 620,000 residential telephone lines in 80 of the 88 counties in Ohio, filed its request for elective alternative regulation with the PUCO on May 12. Unless the PUCO takes action by June 26, the plan will be approved automatically.

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.